10 September 2014Print This Post

Industrial deafness claims fuelling “new compensation culture cash cow”, says ABI

Dalton: legal fees need to become more proportionate

Industrial deafness claims are “fast becoming the new cash cow for claimant lawyers” and their fees need to be curbed, the Association of British Insurers (ABI) claimed yesterday.

Saying that “as one door closes, another one opens”, it warned that claimant lawyers and claims management companies are “increasingly cashing in” on claims for industrial deafness.

The ABI said that following last year’s reduction of fees for RTA portal cases, “there is growing evidence that claimant law firms are turning their attention to industrial deafness claims which attract substantially higher legal fees”.

Alternative business structure Quindell has publicly stated that it is shifting the focus of its caseload away from road traffic and towards noise-induced deafness.

The ABI said the average legal fee that a claimant lawyer received for settling an industrial deafness claim last year was £10,500, compared to £500 for a whiplash claim settled through the portal.

“Given the average compensation award for an industrial deafness claim was £3,100, this means that for every £1 an insurer pays out in compensation to the claimant, they pay out just over £3 in legal fees to the claimant’s lawyer.”

Speaking at the European Forum on Claims Management, James Dalton, the ABI’s head of motor and liability, said: “Industrial deafness claims are fast becoming the new cash cow for claimant lawyers, eager to make up for last year’s reduction of fixed legal fees in the claims portal. With lawyers typically pocketing three times the amount of compensation paid to the claimant, the rise in industrial deafness claims shows that claimant lawyers are keeping the compensation culture alive and well.

“Insurers are here to pay fair compensation to genuine claimants. But we need to tackle the increasing number of industrial deafness claims by ensuring that claimant lawyers’ excessive legal fees are made more proportionate.”

 

By Neil Rose


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