Reforms to regulate claims handling companies have not stemmed the flow of personal injury claims.
Reforms to regulate claims handling companies have not stemmed the flow of personal injury claims.
Research by Sweet & Maxwell shows the number of personal injury claims launched in the High Court rose almost a third during the last two years, from 914 in 2006 to 1205 in 2008.
The Compensation Act 2006 imposed registration requirements on claims management companies, who advertise to attract personal injury victims.
The Act established a supervisory regulator called the Claims Management Services Regulator.
Anecdotal evidence among law firms and insurers suggests the economic downturn has led individuals to submit more claims than usual while insurers suffering from weak returns from their investments have been more willing to contest claims.
The Association of British Insurers (ABI) has said the number of detected insurance frauds rose 17% between 2007 and 2008, although it is unknown whether this would translate into High Court cases.
Lord Justice Jackson’s review of the costs of litigation proposed reforming personal injury claims to make successful claimants pay the success fee, which would be capped at 25%, from their damages. However, it is not known whether the coalition government will implement these reforms.
