Insurance lawyers are pressing the Ministry of Justice to reduce the fixed-fee rates payable to claimant lawyers under the Road Traffic Accident portal.

Responding to a government consultation on speeding up county court cases, which closed last week, the Forum of Insurance Lawyers said the current level of fees was ‘too high’, and was fuelling the payment of referral fees.

However, Law Society chief executive Desmond Hudson indicated that he is seeking a rise in the rates in line with inflation.

FOIL also blamed claimant lawyers for causing delays in the portal process, and called for time limits to be introduced for claimants between stages 1 and 2.

It added that insurers should not have to pay stage 1 costs until after completion of the second stage, to avoid payments being made on cases that are not progressed beyond stage 1.

FOIL also supported a rise in the value of claims dealt with by the RTA portal, from £10,000 to £25,000.

It said: ‘The method to be used for calculating fixed recoverable costs and the levels set will need further assessment [before the limit for RTA portal claims is raised].

'Some of our members have expressed concern at a system which links costs to the value of the claim on the basis that this can lead to unnecessary distortion.

‘We would wish to see the introduction of a costs matrix which avoids creating incentives for adverse behaviour, and which sets costs at a level which does not build in automatic payment of referral fees.’

FOIL president Tim Oliver added: ‘FOIL has proposed that fixed fees and hourly rates in the personal injury system be reduced, which in turn would lead to a reduction in the price of referral fees.

'This would be a market mechanism by which referral fees could be curbed while the government considers the practicalities of introducing a ban.’

But Hudson said: ‘The fixed costs were negotiated and agreed by all of the stakeholders that were involved in the original negotiations, which included insurers and FOIL representatives.

‘The MoJ agreed to review the process after one year. We expect that review shortly. We have seen no empirical evidence to suggest that the rates are or have been set too high. If anything, the rates should be sensibly reviewed in line with the rate of inflation.’