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Under-settlement – the new and unwelcome future of the personal injury industry?

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A new and alarming trend is beginning to emerge in the accident claim industry which will see fewer injury compensation claims being fully pursued for the claimant by personal injury lawyers in a bid to reduce their costs. Under-settlement as it is known involves claimant lawyers suing other claimant lawyers.

This means that increasingly, claimants are not receiving the full compensation they could have had if their lawyer had not chosen to under-settle a claim in order to close the claim quickly.

This growing trend has arisen out of a competitive, aggressive industry where fixed fees are squeezing profit margins for claimant lawyers, making under-settlement a potentially lucrative proposition for many.

An article in the magazine of the Law Society, the Law Society Gazette, found that an increasing number of “disreputable personal injury firms are using badly trained staff to settle claims too early” with the intention of upping their profit at the expense of the client by limiting the amount of work they do for the fixed fees that apply to this kind of case.

So what should you do if you are a claimant and believe that your case has been under-settled? Firstly, always be clear from the outset that you are in agreement with the advice that has been offered to you by your lawyer.

The result of this under settlement trend is the growth of interest in some law firms in looking for work suing these undersettling compensation claim lawyers. A columnist in the magazine of the Law Society, the Law Society Gazette commented that she found that prospect “pretty depressing”.

Our view – yes it certainly is pretty depressing that a growing number of disreputable personal injury firms are using badly trained staff to settle claims too early and adamant the price so as to minimise the work they have to do for a fixed fee, and therefore increase profits – that’s largely down to the ludicrous new fixed fees are governed have introduced for many accident claims. But the fact that solicitors are targeting professional negligence compensation claims on these cowboys is not depressing – that’s an encouraging sign that the market is finding at least a partial solution to this growing problem with accident compensation claims.

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