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14 December 2011

Law Society Welcomes Further Scrutiny Into the Cost of Car Insurance


The Law Society of Northern Ireland has said that it welcomes the publication of the OFT Summary of its Call for Evidence in relation to the cost of private motor insurance.

The Society had provided evidence to the Office of Fair Trading highlighting the impact of the actions of claims management companies on the cost of motor insurance in Northern Ireland.

The OFT Summary published today states that credit vehicle hire and repair garages are charging inflated rates for the provision of their services, which is resulting in higher insurance premiums for us all.

Although the claims management industry is not as developed in Northern Ireland as in England & Wales, it is impacting on the cost of insurance here.

The Law Society, in conjunction with the local insurance industry has developed a Claims Advice Service that ensures the provision of a replacement vehicle and repairs to the vehicle of an injured party are carried out quickly and efficiently and with limited cost.

Discussions about the cost of car insurance in Northern Ireland have to date been rather uninformed with limited analysis of the key cost drivers.

Speaking in relation to the Report, Imelda McMillan Law Society President stated:

“The Law Society has for some time been engaging in discussions about the cost of car insurance in Northern Ireland. Commentators on this issue have frequently and inaccurately pointed the finger of blame solely at the legal system for driving up the cost of car insurance. This does not hold up to scrutiny. This Summary identifies a number of potential factors including the higher number of road traffic accidents, the actions of claims management companies and the general level of consumer awareness when seeking motor insurance. 

Our system for the payment of legal costs in the County Court operates on the basis of a scale depending on the level of compensation sought. This ensures an open and transparent system which is cost effective.

The hourly rate payable to solicitors in Northern Ireland for work done in higher value cases before the High Court is much less than that payable in various regions of England & Wales.

The Society considers that the introduction of a protocol requiring the early exchange of evidence between the plaintiff and defence could assist in reducing the costs of litigation and will be pressing for the implementation of a pre-action protocol in the County Court.

The guidelines for the payment of awards in respect of general damages for pain and suffering are only one factor in calculating what is just to ensure an injured party is fairly compensated. The Society will continue to assist the OFT as it undertakes its market study.”


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