2.4m a day motor clash legal fees

The UK's "dysfunctional compensation system" is seeing £2.4 million racked up a day in legal fees to settle personal injury claims after motor accidents.

That is according to the Association of British Insurers (ABI), which found legal costs for such claims often far exceed compensation payments.

For example, in 2010 one insurer's average claimant legal costs represented 142% of the sums received by injured victims. And the ABI found £74,000 was racked up in legal fees recently for a work-related injury compensation claim, settled out of court, worth just £12,750.

And this, the ABI found, is having dire consequences forcar insurance premiums across the board. Broken down, the £2.4 million legal fee bill is the equivalent of £1,666 added to premiums every 60 seconds.

James Dalton, the ABI's head of motor and liability insurance, said: "The Government must press ahead with the much-needed reform of our dysfunctional compensation system, which, together with the ban on the selling on of personal details of potential claimants, will enable solicitors' fixed fees to be reduced to more realistic levels.

"Lower legal costs will help bring down the cost ofmotor insurance for all drivers."

Copyright Press Association 2012