LMA backs Jackson proposals and urges Government not to fall short

Lloyd’s Market Association (LMA) is supporting the Government’s proposal to implement Lord Justice Jackson’s proposed reforms including an end to the recovery of conditional fee arrangements (CFA), success fees and after the event (ATE) premiums.

The LMA has also called for the Ministry of Justice to implement more thoroughly Lord Jackson’s recommendations which include action on extending the use of fixed fees and banning or capping referral fees.

According to the LMA, the cost of settling personal injury claims is now the single biggest category of expenditure for motor insurers in the UK , causing rapidly escalating insurance premiums for Britain’s motorists. The claims system, said the LMA, is being exploited by middlemen and is leading to a personal injury claims system that is imbalanced, expensive and unfair to defendants.

LMA's underwriting manager David Powell said; “The high cost of personal injury claims is having a direct impact on the insurance premiums being paid by Britain’s motorists and, without reform of the personal injury claims system, these will continue to rise.

“We fully back the Ministry of Justice’s proposals to make CFA success fees and ATE premiums non-recoverable, but are concerned that the full package of reforms, such as extending the use of fixed costs and the ban, or cap, of referral fees, as recommended by Lord Justice Jackson, may not be fully implemented.

“Further, we do not support any alterations or alternative arrangements suggested in the consultation which would upset the careful balance struck by Lord Jackson between claimant and defendant interests.”

The LMA warns that the Government will face significant pressure from claimant solicitors and other intermediaries with an interest in maintaining the current claims system. “We urge the Government to disregard narrow vested interests, to consider the wider public interest, and to press on with the rapid implementation of Lord Jackson’s recommendations in full,” said Powell.