Lawyers 'may hinder compensation'
Using a lawyer may not lead to faster or higher payments for personal injury
insurance claims, a report has said.
Research for the Association of British Insurers (ABI) suggested that injury claims on motor policies take 90 days longer to settle if a lawyer is used.
Payouts are quicker but much lower if an injury lawyer is used to claim on an employer's liability policy, it found.
However, using a lawyer does lead to larger but slower payouts when claiming on a public liability policy.
When people make personal injury compensation claims using insurance policies they often employ a lawyer to pursue the matter, even though it is not necessary to do so.
In the sample, lawyers represented claimants in 76% of cases.
"The insurance industry is beholden to shareholders... if they can cut out the legal costs they are often forced to pay, in order for individuals to pursue their legitimate claims, they will increase their profits," Mr Ettinger said.
"We would like to have a chance to see the methodology and the evidence behind these statistics to ensure their credibility as we find them highly suspicious," he added.
It argued that an arbitration system should be established for all such claims worth up to £25,000.
The ABI argued that it should have the power to decide all claims within six months, with a court case only as a last resort.
For its latest research economists employed by the ABI looked at 93,000 claims last year for sums between £1,000 and £25,000 from six big UK insurers.
Motor claims made up 88% of the sample, employers' liability 10% and public liability policies 2%./
Updated on 7/1/2008