The insurance industry has proposed that fixed fees for low-value claims be set as low as £150, the Gazette can reveal.

A leaked email, apparently sent to members of the Association of British Insurers by the ABI’s assistant head of motor and liability James Dalton, calls for a ‘tactical steer’ to set limits for the RTA Portal. The email asks the General Insurance Council committee to advance the £150 figure as a ‘negotiating tactic’, recognising the Ministry of Justice will ‘inevitably set a number higher than that’.

The figure, a huge reduction on the current £1,200 cap for portal case fees, would apply to all claims valued up to £10,000. The email states that £150 would cut insurers’ costs but ‘runs the risk of the industry being seen to be unreasonable’. On the other hand, a figure of £350 could ‘limit the cost savings to insurers of the reduced fee but increase our credibility in the debate’.

Dalton says costs consultants have examined the work carried out by claimant law firms in processing low-value claims through the portal. This analysis has considered the averages of the salaries of the staff involved, their efficiency rates and overheads involved in running the firm.

Solicitor Andrew Dismore, co-ordinator of the Access to Justice Action Group, accused the insurance industry of ‘playing games’ and trying to drive out solicitors from the claims process.

‘They are playing a cynical and duplicitous game with the MoJ even though they get what they want anyway,’ he said.

‘The ABI want to drive any professionalism out of legal services and turn it into a tick box exercise. Their ultimate aim is third-party capture and before-the-event insurance driving independent advice out of the market.’

A spokesman for the ABI said no final decisions have been taken on the response to the government consultation on fixed fees.

'We have long argued that the current £1,200 fee is far too high and needs to be slashed if we are to be able to reduce car insurance premiums for customers.

'We are considering a number of options as part of our response to the consultation and this should not come as a surprise. And these are just options amongst a range of others we are considering before we finalise our response and provide it to the MoJ.'

The government has said it will listen to all stakeholders as it decides on the future terms of the portal. Parties have until 25 May to submit responses.