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One Year On

So as we approach the anniversary of the Jackson reforms, how do we think it has gone?

My view, for what it is worth, is that not a lot has changed. Yes the small referrers (and many dodgy ones) have left the market but the big ones are still out there. So are the TV and Radio adverts. So are the clients - there has not been a major drop off in claim numbers as had been predicted. It seems clients are getting used to paying part of their damages in legal fees and ATE premiums.

What has happened of course is the amalgamation of law firms (or take overs) and several non-lawyer organisations entering the market through ABSs. We have seen Slater and Gordon buy up a large number of PI firms and grab 5% of the UK market. At the same time we have Saga, Direct Line and Allianz entering the market through the ABS structure, allowing them to make more profits than before.

Fortunately, we have all seen a massive reduction in our car insurance premiums haven't we? Well, er no. Latest figures show they are just 3% lower than before the Jackson reforms whereas insurers were predicting a 15% drop. So where has the money gone?

The answer of course is in the insurers' pockets (or more precisely, their shareholders' pockets). Defendant insurers have saved a massive amount due to the revised fixed costs, removal of the success fee and recoverability of the After the Event Insurance premium. These charges have instead been foisted on the client with the defendant insurers saying 'thank you very much' and sticking two fingers up to the rest of us. They simply don't care. Nor, it seems, does the Government. They are too busy looking to next year's General Election to realise that they have been shafted - along with every one of the victims of accidents these past 12 months.

So what now? Will Labour change things back if they get in? I doubt it - they will have too many other things to think about.

Now if anyone from either political party should read this then be warned. We told you that the insurance industry would do this but no one listened. People don't like being shafted. The worst people to shaft are of course lawyers as they can often do something about it. This imbalance needs fixing. If it isn't sorted out politically then I suspect there will be legal challenges in the long term.

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