The ABI is sending out conflicting messages regarding the number of personal injury cases that fall into the £1,000 to £5,000 compensation band, and this is providing ammunition for the Legal Expenses Insurance Group (LEIG) to go on a scare-mongering campaign (News, 3 August).
According to the report issued by the ABI in July this year, figures stand at 60% at best. But, according to a source at the ABI quoted in the 3 August article, the figure is 90%.
How things change in a matter of a few weeks - or is it the case of the left hand not knowing what the right is doing?
There is no need for the LEIG to start bandying around figures, fuelling speculation that LEI premiums would need to double should the small claims court limit increase to £5,000.
There is no doubt that premiums would increase, but in many cases where the net premium in the present market is near to nothing, then any increase is hardly surprising.
But in our estimation it is likely to be no more than a few pounds - a small price to pay for a product that provides excellent benefits for the consumer, and also removes a huge burden of work from a broker.
Commission is an important factor for all brokers, but any proposed large increase in the gross rate could stop clients from purchasing a product, and this could possibly lead to a new form of claim farmer sprouting up to deal with such a claim under a contingency basis, something that would be detrimental to the whole industry.
Consumers have a need and a right to have their case independently assessed by a qualified person who is always working in the best interest of the client. But this will only continue if the consumer is able to purchase a product for a realistic premium, and where the small claims court limit remains at its present limit.
Any proposed increase would be unwelcome, unjust and not in the best interest of those we should all be protecting: the consumer.
Paul Hurley
Business development and marketing director
ARAG Group
