Nearly a fifth of the north-west’s specialist personal injury law firms are considering shutting up shop due to the financial impact of the government’s civil costs reforms, with many predicting huge cuts in their profitability as a result of the new RTA portal fees, new research has revealed.
The cost of acquiring personal injury cases, irrespective of the referral fee ban, is around £700 – £200 more than the government is proposing for routine road traffic claims even before the legal work is factored in, according to new research.
Quindell Portfolio has finally received its alternative business structure (ABS) licence and also predicted that it will be able to operate profitably within the new fixed fees and small claims structure put forward by the government.
Insurers will be forced to consider alternative business structures (ABSs) if the government is not sufficiently “bold” in reducing the level of legal fees for RTA portal cases, a leading defendant lawyer has warned.
The government has made clear its intention to push ahead with extending the RTA process and also increasing the personal injury small claims limit next April despite publication of the Fenn report yesterday.
The vertical and horizontal extension of the existing RTA portal is a good idea but cannot be done by the government’s target of next April, the Law Society has warned – and the case to cut fees has not been made out.
Claimant personal injury lawyers have launched a strong attack on the government’s bid to expand the RTA claims process while also cutting legal fees for work done under it. Research showed the current £1,200 is about right, with profit margins set to fall.
Liverpool costs specialists yesterday claimed a “massive breakthrough” in a dispute about the recovery of ATE insurance in RTA portal cases that has seen thousands of cases stayed. The news came as the government announced a two-year moratorium on ending recoverability in insolvency cases.
The government is determined to introduce the expanded RTA claims portal in April 2013, the Ministry of Justice has stressed, despite the company behind the system saying it cannot be done in that time.
The Association of British Insurers may call for the fixed fees payable under the RTA portal to be slashed by nearly 90% to £150 as part of its negotiation strategy, a leaked e-mail has revealed.