EL costs set to fall after uplift deal

Employers' liability claims costs are set to fall following a landmark agreement between claimant lawyers and insurers.

The agreement on success fees applies to all EL accident claims regardless of value. Under its terms, solicitors will be entitled to an uplift of 25% of costs in cases that are settled before trial, and 100% in cases that go to trial.

"The agreement brings more certainty to EL claims costs," one EL insurer said. "With various initiatives to ensure more claims are settled before trial, this agreement should amount to an overall reduction in costs."

The agreement was brokered by the Civil Justice Council (CJC).

Uplifts, also known as success fees, are the amounts paid to a claimant's solicitor by an insurer in no-win, no-fee cases in the event that a claimant wins an EL case.

The level of these awards is currently set by the courts and reflects a large part of the claims costs faced by EL insurers.

The agreement has been approved by the Bar Council and ratified by the CJC. It is expected to come into force on 1 October.

High value exceptional cases with damages at or in excess of £500,000 fall outside of the agreement.

Claims with "exceptional circumstances" justifying a variation on the uplift are also exempt, providing either the solicitor or insurer can prove the uplift should be varied.

Meanwhile, pilots between insurers and clients to fast track low-value EL accident claims of £10,000 or less are set to begin shortly with Zurich and Norwich Union (NU) both confirming they will take part.

Zurich will trial the initiative with one of its clients, food manufacturer Park Cakes, starting in July. NU director of claims (public affairs) David Hooker said the insurer was still in discussions with "two or three" clients to take part in its pilot starting in September.

Hooker said the Department for Work and Pensions was due to sign off the framework for the pilots tomorrow.