Hiring a lawyer in a personal injury claim is a must-have cost for anyone considering making a claim. The mere thought of going through the legal wrangling without someone on side who knows the law intimately is enough to put most people off making a claim altogether. But new research from the heart of the lion’s den itself – the Association of British Insurers (ABI) – says that that freeing people from the need to use lawyers could slash car insurance premium rates.

Primarily, those making claims of less than £25,000 would save literally billions of pounds a year if they managed to make the claims sans lawyer. The problem lies with the extortionate legal costs associated with hiring the lawyers. Out of every pound awarded in compensation to the victims of injury, just seven pence goes to the claimant. The rest is mostly dished out to the injury lawyers themselves, with some charging as much as £165 an hour, the trade union Unite has claimed. The result? Up to £2 billion a year is cruelly taken from the injured party’s hands and put into that of the overpaid, unnecessary legal teams.

So what is being proposed to combat these aberrations of justice? A schematic model has been introduced – an effective pay-out ceiling – that would cover 95% of all claims. Instead of the highly variable methods used at the moment, a set of tariff payments would be used to speed up the claims to just six months. At present, they typically take a mind-numbingly slow three-years to process – and that’s when the legal costs tend to mount up. The ABI backs these claims up with some powerful and persuasive proposals: instead of today’s stand-off between claimants and insurers mediated by costly lawyers intent on dragging the case out for as long as possible, a system for smaller claims would be set up to allow the quick and efficient passage of cases through the system. Undoubtedly, the wording of insurance contracts would have to be tightened up so less room for interpretation is left to lawyers to exploit.

The director general of the ABI Stephen Haddrill said: “Our proposals are a blueprint for a much-needed reform of the personal injury compensation system. Too many people are waiting far too long to get a fair pay-out.” But at what price would this ‘fair pay-out’ be secured at? The Association of Personal Injury Lawyers (APIL) rightly points out that victims are likely to get far less money (albeit more quickly) overall: initial compensation sums offered by insurers are by-and-large around half of that eventually secured by lawyers. APIL is unlikely to support the new proposals – it in effect puts them out of a job – and is not quick to state how much of the victim’s extra cash actually gets spent on them. It could actually end up being more than if the claimant has just settled for the insurance company’s’ payout. Just having the option to take a smaller claim and have less hassle is surely a battle won for the already hard-done by consumer, hacking their way through the thickets of insurance policy.

Jack is an author of several articles pertaining to No Win No Fee, Compensation Claims, Personal Injury Claims and other legal articles.