The Government needs to act to clamp down on personal injury lawyers who are making PI claims lengthy and costly, says the Association of British Insurers (ABI).

Stephen Haddrill, director general of the ABI, said the current system was failing too many claimants. Speaking at the launch of the ABI report “Adding Insult to Injury”, said:

“Personal injury claims following a motor accident take on average two years to settle, with three years on average for workplace claims. This is unacceptable.

“The government has grasped the need for reform. We look forward to implementation of their proposals without further delay.”

In its report the ABI was also very critical of Personal Injury lawyers for paying referral fees of £600 - £900 to claims management companies.

The ABI claims that the slowness and high costs of PI claims are down to personal injury lawyers who are responsible for lengthy cases which drive up the legal costs as a result.

Stephen Haddrill, explains: “What tends to happen is that a person who has been injured goes to a lawyer who does a vast amount of research, often unnecessarily in our opinion, before putting the claim anywhere near the insurer.”

The Government has already drawn up plans to improve the process and the ABI is keen to see them implemented, so that claims can be settled promptly.

Under the new proposals, lawyers would have five days after being contacted by a claimant in which to notify insurers of a potential claim.

Insurers would have 15 days in the case of a motor claim, and 30 days for a workplace or public liability claim, to decide whether or not they are going to settle.

In a consultation paper published in April 2007, Ministry of Justice officials suggested imposing a system of fixed fees, giving insurers the job of investigating cases and increasing the limit on fast track cases from £15,000 to £25,000.

The recommendations in the MOJ consultation paper were largely welcomed by the ABI, but as yet are not being enforced or adhered to.