Ludicrous new government plans – will the consumer really benefit?

The government’s obsession with driving down the legal costs of accident compensation claims, regardless of the potential consequences, continues. The latest moves involves a proposal for setting a new rate for the maximum fee for low value road traffic claims that go through what is known as the RTA portal – an online system for the more routine personal injury claims. The cap for legal fees is currently set at £1200 – which was in itself a significant decrease in the rate previous recharged by solicitors. Unbelievably, the justice minister, Jonathan Djangoly, is seriously suggesting that the rate ought to be decreased to just £300. Lawyers are always easy targets – what other industry would be expected to negotiate the possibility of a 75% reduction in income – would they do the same to public sector workers? Of course not.

I have absolutely no problem with the principles of competition, but I think this occasion the government is making major mistake and seemed to be in thrall to the insurance industry. The rationale behind this significant planned intervention into the market, seems to be that insurance premiums are too high. Insurance companies bleat that this is because of the legal costs involved in personal injury claims are simply too high – though if they were more realistic and didn’t fight quite so many understandable accident compensation claims, that would significantly help the issue of costs.

If the government do really reduce the cap on legal fees for the RTA portal to just £300, they will be playing into the hands of the insurance companies. Firms like ours, with top-quality person injury solicitors, will simply refuse to do this level of work.. Fortunately, our reputation enables us to obtain enough good quality work to cut out this lower level – my concern is that the any firms remaining, will only be able to make this kind of injury claim work pay, if at all with the very lowest level of qualified and highly inexperienced fee earner. Insurance companies therefore will have all the advantage – able to employ their own highly qualified lawyers with a limited budget working against inexperienced legal clerks working on a limited timescale. The result – a win for the insurance companies – not the consumer.