LEIG alert on big insurance groups, 26 June 2006
Legal Expenses Insurance Group
News Release : 26 June 2006
Legal Expenses Insurance Group
News Release: 26 June 2006
LEIG alert on big insurance groups' motives behind lobbying for changes in compensation arrangements
The Legal Expenses Insurance Group (LEIG) today alerted MPs, interest groups and the general public to the real reasons why the big insurance groups are lobbying for certain changes to the compensation arrangements in the UK.
The changes they are pressing for include raising the small claims limit for personal injury claims, limiting the recovery of after the event (ATE) legal expenses premiums and encouraging claims to be settled without claimants receiving professional help and advice.
Director of the LEIG, Tony Baker, commented:
It is perfectly legitimate for the big insurance groups to lobby hard for changes to the compensation arrangements in the UK. But it is disingenuous of them to promote these as being in the interests of claimants. Nothing could be further from the truth. There is a clear conflict of interest. The changes they seek are aimed at reducing the number of claims and their cost and thereby inflating their profits. The interests of claimants are of paramount importance and must be protected and not steamrollered by big business interests.
The LEIG is preparing a research paper on the recovery of after the event insurance premiums. There have been suggestions, from some judges and supported by defendant insurance companies, that only very modest, and possibly uniform, ATE insurance premiums should be recoverable following successful compensation claims.
There have been a number of arbitrary reductions of ATE premiums by judges at detailed assessments; it is clear judges are not aware of the actuarial principles behind the setting of premiums and they have been reducing premiums to levels that seem right to them. There are, therefore, a number of cases which are going to appeal because judges have limited the recovery of after the event insurance premiums.
The LEIG paper will address the main issues and be designed to assist and inform debate on this very important subject. It is important to stress:
For the Access to Justice Act to work as intended and allow claimants access to justice, then it is imperative that adequate ATE premiums should be recoverable from the losing party if a claimant is successful. They should not have to fight case by case at detailed assessment with all the associated costs and delays.
If the full premium is not recovered then this will curtail the ATE insurance market and reduce access to justice for claimants. It will result in many people going uncompensated or under compensated where they suffer personal injuries when someone elses actions or negligence has led to loss or a personal injury.
Judges need to be made aware, therefore, of the make-up of ATE premiums in order that they appreciate the different levels of premium. In doing so, they will be empowered and confident to award ATE premiums in full when compensation and costs are awarded.
Research recently published by the Group concluded it would be highly detrimental to claimants for the personal injury small claim limit to be increased. The personal injury limit has not increased since 1991 and for very good reasons. The Group believes these remain even more valid today following the withdrawal of legal aid and compensation reforms introduced and planned for the next year or two. Any increase from the current £1,000 limit would seriously prejudice the ability of claimants to pursue compensation claims.
The Group welcomes comments and contacts with other bodies including those with similar consumer objectives.
-ENDS -
Notes for Editors
1. The Legal Expenses Insurance Group (LEIG) was formed in April 2006 by a number of leading legal expenses insurers and intermediaries. The aim of the Group is to work together to protect and advance the rights of claimants to justice and fair levels of compensation. The following companies have to date joined the LEIG:
Albany Assistance Ltd
Angel Assistance Limited
DAS Legal Expenses Insurance Company Ltd
FirstAssist Group Limited
LAMP Group Ltd
MSL Legal Expenses Ltd
Red Sands Insurance (Europe) Ltd
ULR Norwich
It is estimated that members represent in excess of eight million motor legal expense policyholders and over 16 million policyholders in general.
2. Tony Baker has been appointed as Director of the LEIG tasked with setting up and establishing the Group. He is an independent consultant and non-executive director and a former Deputy Director General of the Association of British Insurers. His contact details are:
Tony Baker
Tel: 01920 465000
Mobile: 07725 462528
Email: thetonybaker@gmail.com
A jpeg picture is available on request.
3. Website: www.leig.org
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