A world of pain for personal injury firms?

There continues to be no respite from the raft of potential changes set to impact legal services firms in the personal injury (PI) claims space.

Recent months have seen the Ministry of Justice announce a review of how the handling of Noise Induced Hearing Loss claims might be improved. The Government outline plans to crack down on the fraud and claims culture in motor insurance and the Solicitors Regulation Authority announce a research project into the profile of the PI market and competence of PI solicitors.

No doubt each of these initiatives will impact the way firms operate within what is already a fiercely competitive and challenging marketplace. For those firms operating at the high volume low value end there will be increased uncertainty on results and the shape of the future operating environment.

Get big or go niche

We have already seen a number of firms exit the PI market, diversify and/or scale down their operations following the unprecedented changes of recent years. Those that remained have either had to ‘get big or go niche’ and amend their business strategies and financial plans to adapt to the new market conditions.

Faced with undoubted ongoing regulatory reform, firms will need to review the viability of their business models and consider adapting existing processes to ensure future caseloads remain operationally feasible and financially viable.

Consequences for stakeholders

The Government has highlighted its determination to crackdown on the fraud and claims culture in motor insurance. This will potentially result in lower overall levels of claims being brought by claimants, but the impact of such changes are not confined solely to claimant firms.

Defendant law firms, often instructed by insurers to defend cases, would also be adversely impacted by declines in claim volumes requiring their input and will be keeping a watchful eye on developments.

Faced with the threat of lower case volumes, firms will need to improve efficiency through the use of technology, data analytics, process innovation or changing their resourcing mix in order to maintain or improve margins.

Other impacted stakeholders include lenders and private equity investors who have backed PI law firms’ growth. These parties will have seen what happened with the Parabis Group1 and may seek to act to ensure their exposure to these firms is not at risk.

Predictions for the future

We expect further industry consolidation will present key opportunities for firms with a sound operating base and the scale to move forward. Those that are anticipating developments and adapting quickly to the ever changing market conditions will be best placed to improve profitability, survive and thrive.


What do you think the impact of PI changes will look like? And what types of opportunities do you expect might arise? Share your thoughts below or schedule a meeting to discuss your situation in confidence.



1 Parabis Group was the first ABS-licenced law firm to receive private equity investment and was recently broken up through seven pre-pack sales after being placed in Administration.

John Baker | Claims Advisory Specialist
Profile | +44 (0) 77402 42661


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