Norwich Union insurance calls for reform

Personal injury claims below £1,000 should be blocked, according to insurance giant Norwich Union.

The move comes as increasing numbers of people claim for "frivolous" reasons, spurred on by no-win no-fee companies and their televised advertising campaigns.

Norwich Union has said the huge jump in the number of claim is pushing up premiums for the general public.

The insurer has backed recommendations from the Bar Council, which is calling for the way personal injury claims are processed to be reformed.

As well as a minimum claim of £1,000 the Bar Council would also like to see an end to legal fees being paid on claims below £5,000.

"Claims management companies and solicitors have exploited the public's expectations in terms of what is compensatable and the amounts that might be achieved," commented Norwich Union's director of technical claims, Dominic Clayden.

"The inevitable consequences have been an increase in frivolous and vexatious claims, and an explosion in claimant's [legal] costs. The latter now represents 40 per cent of all payouts.

"During the last year we have been working hard to raise the national debate around the cost and process of compensating people for personal injury and to show that the current system is slow, costly and inefficient."