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The legal expenses insurance (LEI) expert has spent the past two years since the reforms were originally announced fully researching the potential outcomes of the reform’s main changes and the impact they will have on Legal Expenses Insurance products.
By working in collaboration with its partners and their service providers, Arc Legal have developed a range of models that can be tailored to individual clients’ needs in response to the reforms.
“It comes as no surprise to us that the reforms have been further delayed, however this doesn’t mean that plans for a post-reform world should stop. Whilst the delay does provide some additional planning time, if the reforms do come into place in April 2020, Motor Legal Expenses policies sold from 1st April 2019 will potentially result in claims that fall under the new regime. Providers need to act now to ensure they have a product that is fit for purpose come next April.
It is inevitable that the commercial framework of Motor Legal Expenses will have to change, due to the inability to recover legal costs for cases falling within the small claims costs, which will account for the significant majority of Personal Injury cases once the reforms come into place. That said, the reforms also present opportunities to provide a Motor Legal Expenses product that provides measurable customer value.
We have spent significant time developing servicing models in response to the proposed changes that can be made bespoke to our partner’s specific requirements. Our approach is flexible, and we can work with our partner’s choice of service provider. A key driver is ensuring that legal expenses continues to provide value to customers, to ensure that they continue to get access to high quality support in the event that they suffer a personal injury, regardless of the value of their claim. We are also focused on embracing digital servicing options, to ensure that our models of operation are efficient and cost effective.”
The reforms include plans to increase the small claims limit from £1000 to £5000 for personal injury claims resulting from motor accidents amongst other initiatives aimed to reduce what the Government sees as an endemic whiplash problem.