PI firms 'run riot' on claims costs

PERSONAL injury lawyers acting for plaintiffs are benefiting from the "rising tide of personal injury claims", by earning up to three quarters of the legal costs paid out yearly by the insurance industry, says a defendants' lawyer.

Martin Bruffell, personal injury partner at London firm Berrymans, speaking to delegates at the Chartered Insurance Institute conference, said: "Insurers and defendants have put their solicitors under the cosh for many years to keep their legal costs down, but plaintiffs' solicitors have been running riot through the legal system."

Bruffell said accident victims' lawyers, who were largely sponsored by trades unions, win 98 per cent of compensation cases against UK employers.

"The vast majority of legal fees are used for sponsoring trades unions," he said.

Bruffell called for new claims handling strategies and procedures to stem "the rising tide of personal injury claims".

Davies Arnold Cooper head of PI, David Rogers, agrees with Bruffell's analysis of the costs split because he says some PI firms are inefficient.

But Russell Jones & Walker partner Fraser Whitehead rejects Bruffell's view of plaintiffs' lawyers.

"That's absolutely ridiculous. Solicitors are only entitled to recover such costs that are reasonable, and so are not running riot through the system."

Whitehead, who acts for plaintiffs and trades unions, agrees that some firms' costs are high, but he says that shortcomings in the taxation system contribute to the problem.

"The present system does not reward the efficient solicitor," he says.

Insurers' tendency to fight cases needlessly also clocks up extra costs they then have to pay, he says, adding that trades union firms are more efficient because they are specialists.