Legal expenses insurer DAS has predicted that there will be an increase in demand for motor legal expenses insurance (MLEI) as a result of the Ministry of Justice’s (MoJ) proposed personal injury reforms, which were announced last week.
The MoJ is set to raise the small claims court track limit for motor injury claims to £5,000 and introduce a tariff system for lower value soft tissue injury claims.
The reforms, which the Government says have been primarily designed to reduce fraudulent whiplash claims, have been criticised in some quarters for making it harder for genuine claimants to seek compensation.
James Henderson, managing director of insurance in the UK & Ireland for DAS UK, said that he had no doubt that legal expenses insurance would play a crucial role in mitigating any negative effects of the 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,” he said.
This would probably mean that premiums for legal expenses cover would have to go up however, said Henderson, as the cost of legal action for lower value claims would no longer be recoverable from the at fault party.
He added that without legal representation, claimants would 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,” he said.