News

The cost of running a car is rapidly rising. Of the many different costs associated with running a car, insurance is often the most expensive. Though it is a legal necessity in this country, the ambiguities of many insurance policies leave many people wondering ‘what are we actually paying for?’

Why Do We Need Insurance?

Car insurance is made mandatory to ensure that people involved in road accidents get the compensation they need to make their lives as normal as possible. If a road accident claim ends up going to court, as well as the compensation that the court awards, the legal cost also need to be covered. In cases of this sort, the insurance of the guilty party will normally cover the legal fees of both sides.

Why Does It Need To Be More Transparent?

When someone makes a road accident claim, or informs their insurance company of an accident, the insurance company will often enlist professional compensation claims lawyers to advise and represent them.

The argument put forward in a recent report by the House of Commons suggests that it is this aspect of insurance policy which is most in need of reform. Insurance companies very often have arrangements with particular accident claims solicitors who, in return for the work, pay the insurance company a substantial referral fee. This referral fee is on top of the premium that the customer has already paid.

What Does It Mean For The Customer?

The argument by the recent House of Commons report takes issue, not only with these underhand ‘referral fees’, but also the lack of choice given to the paying customers. Not all accident claims solicitors are the same. Some insurance companies will use fully qualified road accident claims solicitors and others will use inferior accident claims services. What the report argues for is more choice for the consumer and a greater level of transparency regarding legal fees when an insurance policy is sold.

The justice secretary, Kenneth Clarke has recently suggested that 90% of personal accident claims could be handled through an online service.

There is currently such a service in operation for road accident claims claiming up to the value of £10,000 compensation. The new regulations are designed to kerb the extortionate fees charged by some solicitors. Clarke believes that the huge legal costs, which very often exceed what is paid in compensation, will quite often put genuine claimants off taking legal action, despite the no win no fee system. He believes that by making it possible for people claiming less than £50,000 in compensation to pursue their claim online it will make things a lot easier, and ensure more people get the compensation they deserve.

How Will It Affect Compensation Claims?
The system will work by resolving as many cases as possible without them going through the courts. In the cases where a court appearance can’t be avoided, the legal fees will be limited to £1,700. This should help force lawyers to be more competitive with their fees and, hopefully, make it a lot easier for genuine claimants to make an accident claim.

This move comes just after it has been announced that mediation will be made a compulsory avenue which much be properly pursued as part of all compensation claims. Collectively, these changes to the legal system are designed to make sure customers get a better deal from their accident claims solicitors and a greater level of justice. By introducing these regulations, Kenneth Clarke hopes to combat the compensation culture which he believes has a strong hold over the accident claims and no win no fee arena.

Is It A Popular Move?
These regulations have been met with mixed opinion. While some see them as a positive step towards giving the customer more options and power, others think it will put legal help out of reach for some claimants.

Following two of the harshest winters in living memory, the UK roads are in a sorry state. The worst problem that cold weather causes is potholes.

The Pothole Problem
Potholes are caused by water getting into the small cracks in the road and then freezing. As it freezes the water expands and undermines the structural integrity of the road surface. Over a sustained cold spell this process can very quickly lead to big holes developing in the surface of the road.

Due to the way roads are constructed, potholes most commonly occur towards the edge of the road surface. While this makes it a little easier for car drivers to avoid the dangerous holes in the road, it makes them a very severe threat for cyclists and motorcyclists.

Why Aren’t They Being Dealt With?
The state of the UK roads, though partly due to the extreme weather conditions of the past few months, are also down to the financial strain being felt by local councils. At a time when all local councils are trying to save as much money as possible, road repairs sometimes take a back seat.

Road Accident Claims Set To Rocket
Unfortunately, saving money by ignoring these potholes is proving to be a false economy. Personal injury lawyers firms have already seen a sharp increase in compensation claims due to potholes in the road. In many cases these accidents have caused very serious injuries for those involved. With the average pothole related compensation claim costing councils £1,300, ignoring these dangers could end up costing councils far more.

£200m Set Aside To Avoid Compensation Claims
Luckily, the financial implications of ignoring the pothole problem have been recognised by the new government’s recent budget announcement. The budget for road repairs across the UK – which was set at £100 million – has now been doubled to £200 million. This figure is to be used solely for the purpose of improving the state of the UK roads and will be shared between all UK councils.

Devon council have already been allocated the largest share of this ‘exceptional payment’ receiving £9.3 million. There are also 6 other local authorities each set to receive well over £6 million each. Though these figures may seem high, if ignored, the personal injury compensation bill could be significantly higher.