Good to see the Law Society openly criticise motor insurers for cheekily pocketing over £500million of savings made from the RTA portal. The Society, of which Express Solicitors is an affiliate of, was rightly irked after noticing how massive savings in legal costs since the RTA portal’s inception have not been passed on to the consumer.
The fixed costs involved were agreed back in 2009, and the insurance industry pledged during negotiations that any savings would be enjoyed by the consumer. Since 2010, the portal has dealt with upwards of 600,000 cases per annum, and as the portal fees have never been increased the saving is estimated at £500million.
It begs the question; just how much faith can we have in the insurers to pass on any future savings from the Jackson reforms? Going off what they’ve done with the portal savings, I think we need to keep a close eye on them!
And it’s not just the Law Society who have been watching the insurers recently. The OFT have provisionally decided to refer the industry to the Competition Commission after concluding that the market is ‘dysfunctional’ and that firms may be acting anti-competitively.
Specifically, the OFT has taken umbrage with the way insurance firms make money off referrals and rebates when arranging repairs, replacement vehicles and so on in the wake of a Road Traffic Accident. Drivers have little control and are dictated to somewhat by the insurers, and I’m pleased the OFT have decided it’s worth looking into ways in which the insurers might be cheating their customers.
If I may quote a little Edmund Burke: ‘When bad men combine, the good must associate; else they will fall one by one, an unpitied sacrifice in a contemptible struggle’. So hats off to the Law Society and OFT for speaking out against the insurers over their greedy behaviour!