The escalating cost of injury claims

Bodily injury claims have risen by an average of 12% a year over the last decade.

And there is no sign of the trend diminishing because the UK is beginning to mimic the USA's notoriously litigious culture.

Bodily injury claims accounted for 36% of all motor insurance premiums in 1996 compared to 23% in 1993. This increase is largely due to the fact that more and more people are now claiming for injuries sustained following an accident.

The evidence shows that many of the increasing number of claims fall in the range between £5,000 to £15,000. These are precisely the claims sizes that would be expected to occur as a result of the litigious effect. Television, and other mass media advertising of personal injury-related services, is helping to fuel this compensation culture, as is the wide use of legal expense cover and the new "no-win no-fee" arrangements offered by solicitors.

At the other end of the scale, there is also a notable increase in the number of high value claims – those over £200,000. The changes to the Ogden Tables has had the biggest impact. The figure used to calculate the annual investment return expected for serious injury awards was dropped from 4.5% to 3%, which meant the initial payout has to be much greater.

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