Personal injury reforms could spark increased demand for motor LEI

Leading legal expenses insurer DAS is predicting an increase in demand for motor legal expenses insurance (MLEI) as a result of the Ministry of Justice’s response to the proposed personal injury reforms announced last week.

The reforms, which are primarily designed to reduce the number of fraudulent whiplash claims being pursued, have been criticised in some quarters for making it harder for genuine claimants to seek compensation by raising the small claims court track limit for motor injury claims to £5,000.

James Henderson, Managing Director Insurance UK & Ireland, DAS UK Group said: “Whilst we welcome any steps taken to help remove fraudulent activity, I am concerned the Government’s response to the proposed reforms may pass too great a burden onto legitimately injured claimants. Almost no detail has been given as to whether there will be reforms to how victims access compensation.

“Without legal representation, claimants could be responsible for obtaining and reviewing medical reports to support their injury, calculating financial losses and expenses, and obtaining evidence to prove fault such as a police report, witness statements or engineering evidence. In disputed cases claimants may need to issue court proceedings and put forward legal arguments concerning the accident circumstances, the injury and any financial losses incurred.

“I have no doubt that legal expenses insurance will play a crucial role in mitigating any negative effects of these reforms. Legal fees are likely to deter many legitimate claimants; knowing that they have access to expert help and that their legal fees are covered by their MLEI policy will be of considerable comfort.”

James Henderson also pointed out that “for insurers to offer the current level of service to customers, they may have to increase premiums of the legal expenses cover as the cost of legal action for lower value claims will no longer be recoverable from the at fault party.”