Insurers 'cannot afford not to fight cases'

Insurers "cannot afford simply to pay personal injury claims just for the sake of it", Anthony Hughes, chief executive of insurance litigation specialists Horwich Farrelly has said.

Hughes rejected the idea that yesterday's extension of the personal injury portal to employer's and public liability cases would encourage insurers to stop fighting cases and benefit from reduced claimants' fees.

"The portal has been with us for three years and we haven't seen people admitting liability just for the sake of it," he said.

"The idea is wrong and would not drive the right behaviour in terms of fraud."

Hughes said that extension of the portal would increase the number of cases going through the portal by only 4 to 6 per cent.

"Insurers did not ask for the portal to be extended," he said. "It's just a case of the government jumping on the bandwagon, and thinking that because it works for RTAs it will work for other cases."

Hughes said the whole landscape of personal injury litigation was different after LASPO.

"The removal of success fees and ATE premiums gives us a huge incentive to fight cases," he said. "With conditional fees, cases needed very good prospects of success because claims were going to get a 100 per cent uplift."

Hughes added that requiring medical reports for all whiplash cases, as recommended by the transport select committee earlier this week, could be "very costly".

David Marshall, managing partner of Anthony Gold, said extension of the portal had added to the economic incentive for insurers to admit liability and only leave quantum to be decided.

"Insurers should be offering to settle fair sums for injuries, and, if they have good defences, running them. Many may not want to encourage spurious claims."