Personal injury: More exits to come
As consolidation in the personal injury (PI) market increases, there are signs that “most of the leading players in the sector are starting to turn a corner”, a report has found.
It also said the number of PI cases going to court increased last year, the first increase since 2017.
In the UK Personal Injury Market 2025, IRN Legal Reports valued the PI market at £4.4bn in 2024, an increase of 2.3% on the previous year.
This was despite another 100 law firms leaving the market in that time.
“Market conditions have remained tough with claims numbers falling again during the year while the lifecycles of many claims continue to be lengthy.
“As in the previous two years, the strongest growth has been for some of those practitioners working in clinical negligence, serious injury, and complex cases.”
However, IRN predicted market value would grow by 4.5% in 2025 to £4.59bn, and then by 5.4%, 5.8% and 6.2% in the following three years, reaching over £5.4bn by 2028.
Motor-related cases continued to dominate by volume, but their share of total claims slipped from 73% to 70%, with clinical negligence and public liability claims leading the areas where claims rose.
For the sixth year running, claims registered at the Compensation Recovery Unit (CRU) fell, slipping to just under 448,000 in 2024/25 from 477,200 the previous year. Total settlements fell to just over 508,000 in 2024/25 from nearly 549,000 in the previous year.
However, the number of PI claims going to court, which had been declining since 2017, increased a little in 2024 to 62,100.
IRN said that after “four years of dismal market performance”, it was “too early to say that the PI market is ready to move forward with more positivity”, but investment in digital solutions by “some of the larger players”, while reducing profits, was “starting to reap some ROI [return on investment] benefits and there should be more to come”.
The report went on: “Those leading firms that have persevered with low-value RTA claims now have automated processes in place that can quickly and effectively deal with these claims, with limited involvement from legal professionals, and many have reduced per-case costs.
“Those that have taken the decision to move into higher-value and more complex claims are improving revenue returns although some of these claims can take years to complete.
“Again, it is the larger firms that can take the greatest risk on these claims plus cope with these delayed payments.
“However, the above trends offer little optimism to many smaller PI firms with limited ability to invest in IT, marketing, and improved digital customer interfaces.”
Researchers said the top 20 PI firms now took over 50% of all claims involving legal representation registered at the CRU.
“There will be more firm exits as most of the leading players continue to grow, including through more mergers and acquisitions. As consolidation continues, more external investors including private equity will see the sector as a potential target.”
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