Personal injury market showing “little signs of recovery”


Motor: Claims down, accidents up

The personal injury (PI) market is showing “little signs of recovery”, with some – mainly larger – firms posting good results and having expansion strategies, new research has found.

It comes as new figures highlight the decline in motor claims, despite a rise in accidents.

IRN’s 2023 Personal Injury Market Report estimated that the PI market registered a small revenue increase of 3.5% in 2022 to £4.1bn.

“This overall increase hides wide variations in the performances of law firms and claims companies in the sector, with many still facing an uncertain future.

“Many of those working on serious injury and complex cases are registering the best performance and there are signs that those firms that have invested significantly in IT solutions are beginning to see the benefits.”

With ongoing reform and uncertainty “not helping to create any stability”, the report predicted negligible market growth throughout this year and next.

“Amongst this weak performance there are some providers that are posting good results and have expansion strategies for the next three to five years. These are mainly the larger firms and the result is likely to be further consolidation and an increasing market presence for some of the existing market leaders.”

IRN’s analysis showed a continuing decline in the number of law firms active in the PI market, alongside the fall in claims. Over the last decade, claims registered at the Compensation Recovery Unit (CRU) have fallen by more than half from over 1.1m in 2013/14 to just 484,300 in 2022/23.

The volume of PI claims going to court also fell for the fifth year running.

Meanwhile, a data analysis has revealed “a clear ‘justice gap’ in which victims of negligence are not receiving redress”, according to the Association of Personal Injury Lawyers (APIL).

While in the second quarter of 2023 motor injury claims were 45% below pre-pandemic levels, traffic volumes were 3% higher.

“Before the OIC [Official Injury Claim] was introduced, the number of claims reflected the number of injuries. The divergence between claims and injuries we see now shows a very clear justice gap,” said APIL president Jonathan Scarsbrook.

“The cost of paying compensation to people with whiplash injuries was used by the government and the insurance industry to justify reform, with the promise that premium prices would come down.

“Since the OIC was introduced, the total cost of injury claims settled by motor insurers has fallen by more than a fifth yet the price of motor insurance has soared by 41%.”

CRU data seen separately by the Association of Consumers Support Organisations (ACSO) said the second quarter of 2023 was the lowest second quarter of the year on record for motor claims – 89,361 – and the second-lowest quarter ever after the last quarter of 2022, when there were 84,257.

Matthew Maxwell Scott, executive director of ACSO, said: “While people are still getting injured in regrettably large numbers on our roads, many are not seeking out the redress available to them, including the rehabilitation they might need.

“In a period of rapidly increasing motor insurance premiums, it is difficult to see how any of this is a win for consumers, especially injured ones.”




    Readers Comments

  • Mark Johnson says:

    This was always going to happen and why should solicitors get involved with this type of work with no reward or costs benefit.
    I personally have had more than 50 people and families come to me asking to act for them and I was unable to help as my firm go out of the car on car accident game.
    Those families have not bothered because they were told the levels of compensation and the hassle it was just not worth it.

    I suspect my numbers are small but it kept me busy times that what other solicitors have lost and I bet your talking hundreds of thousands claims a year.

    Sorry state of affairs.


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