Personal Injury Claims and the Legal Expense Insurance Panel Firms

Personal injury law is a very competitive area of the legal profession. There are many types of legal practices varying in size, ethos and ability. Along with established high street firms there has also been a growth in the number of panel firms. Panel firms could be described as organisations which offer legal services on behalf of an associated insurance company. As with all things in life there is a range of quality within these firms and their lawyers.

It has become common place for insurance companies to pass their insured’s details on to panel firms after they suffer injuries as a result of an accident. Undoubtedly many people reading this blog may have received text messages or phone calls (often mistakenly) from unknown sources, concerning accidents and claiming compensation. This sort of approach is likely to make many people who have suffered accidents feel under pressure to rush into litigation without being able to take the time to make an informed decision as to their representation.

There are certainly panel firms who will provide a high level of service for their clients. However there may be underlying risks inherent in using some panel firms. These could include the use of junior staff for complex claims, the pressure to instruct them quickly, possible conflicts of interest, the geographic location of the firm and potentially settling cases prematurely at too low a value.

Arguably the shortcomings of some panel firms are the result of things such as high case loads per solicitor, inadequate face-to-face contact with clients and lack of expertise in specialist claims. However, more importantly conflicts of interest may arise if insurance companies have a financial interest vested in the panel firm they instruct on behalf of their insured, or if the firm pays the insurance company referral fees. If so a firm may unwittingly have to weigh their client’s interests against the interests of the insurance company.

The following examples illustrate occasions where panel firms have not secured the appropriate level of compensation for their client.

A large regional firm was recently able to secure £90,000 for their client, who had originally settled their claim for £10,000 after taking the advice of a panel firm. Furthermore in August 2012 one particular claimant recovered £700,000 after pursuing a claim originally settled for £16,000 by a panel firm of solicitors.

Unfortunately claimants will face further difficulties if their case is settled below value. It is likely a claimant would have to proceed with further litigation in order to recover their correct level of compensation; this will usually be the last thing a claimant will want to do as it will simply prolong the experience of making a claim.

Arguably the speed at which panel firms attempt to settle cases is set to increase. This is expected after new legislation is introduced in April 2013, putting panel firms under increased financial pressure to recover costs as quickly as possible.

With all that said, it is very important claimants understand they are legally entitled to choose their representation, and should not feel under pressure to instruct a panel firm put forward by their insurers. They should research the firm they instruct carefully relying on recommendation, the firm’s experience and quality standards.