Could the purge of the personal injury industry actually be a good thing?
It’s not always easy to find the silver lining in the midst of a crisis. But there is a growing feeling in the personal injury industry that the Jackson Reforms might have a more positive impact on the claims management landscape than initially thought.
Although the full effects of the legislation changes have not yet been felt by the majority of the industry – due to the average length of a compensation case being more than a year, most businesses will still be processing claims under the old system for some time – there is widespread agreement that the next 12 months will see a seismic shift in the industry.
As the profitability of PI diminishes, it is likely that smaller firms will disappear or be absorbed by the larger organisations. Another probable outcome is that solicitors withdraw their 100% compensation offers to protect against the loss of profit.
Of course, the real victim in all of this is the accident victim. If solicitors are forced to collect the full 25% of compensation awarded or even turn away claimants when the new legislation surrounding small claims in road traffic accident cases comes in, it is the man (and woman) on the street who suffers most. The result of this will be an increase in individuals representing themselves in court with no prior experience of pursuing compensation, and a decrease in legitimate claims from those afraid of expending time, energy and money on a case they don’t feel they can win.
Where there are challenges there are also opportunities
So where does the silver lining lie?
For those progressive legal businesses equipped to provide a swift, efficient service the stick used liberally by the Jackson Reforms is likely to be followed by the carrot of fewer competitors and an opportunity to grow market share. Claims management firms such as Winn Solicitors, which is based in Newcastle Upon Tyne where overheads are considerably cheaper, promise to retain their commitment to 100% compensation despite the squeezing of their margins.
And what about the wider road traffic accident landscape? Well, for those businesses able to steer their ship safely through the legal storm surrounding PI, there’s something else on the horizon that might just give them hope. As suggested in a previous guest post on this blog the legal industry is undergoing a PI reputation crisis currently. Stirred up by both the media and, to a large extent, insurers looking to place blame elsewhere for rising insurance premiums, accident victims are now afraid of being tarred with the “compensation culture” brush.
The purge brought about by the Jackson Reforms may weed out the unscrupulous claims firms in the UK, it may simply send smaller or less efficient organisations out of business, but what we must hope it will do is remove the stigma surrounding Personal Injury. Once this is achieved, Britain might just be left with a transparent, regulate service accepted and used responsibly by the public. And the question then is, “Who will insurers have left to blame for their premium hikes?”
This post has been brought to you by Tim Deakin, he has been writing online for a number of years and has spoken with Winn Solicitors to gather the data found within this post.