As many will know, big changes are coming in the lucrative personal injury market.
Personal injury has certainly been the most lucrative legal niche outside of the big corporate law firms, and many smaller firms have entered into the market seeking to exploit the relatively low risk and high reward whiplash claim market, which many say is completely out of control.
The Government, particularly in the current political climate, are clearly determined to reign in the whiplash claims market, and it appears they may do this in 2 ways :-
- by increased regulation and accreditation for any doctor to be qualified to provide a whiplash medical expert report
- by increasing the personal injury small claim limit to £5,000.00 thereby making legal costs for the majority of whiplash claim far less lucrative
So, how might personal injury firms react to these changes ?
Well, if there’s one thing to say about many of the personal injury specialist firms, they are pretty savvy as business people compared to many lawyers, so it seems likely that many will adapt fast and cleverly, and 2 ways perhaps they may do this are :-
- to seek to differentiate and position themselves as niche practices which specialise in certain types of injury claims, whether asbestosis, very serious injury claims or claims for injury abroad. by doing this, they may also offer an alternative to the claims packaging type advertising seen on tv.
- perhaps to diversify into other areas of law, possibly not as lucrative as personal injury, but still worthwhile. Many personal injury solicitors will have a huge database of clients built up over many years and based on a volume service, who they may cross sell to, potentially linking up with other firms who specialise in other areas of law or diversifying themselves. Most personal injury specialist firms have not bothered with leveraging their database as they simply haven’t needed to.
It may well be that a number of personal injury firms, particularly the smaller ones or late entrants to the market, could struggle also. It will likely become more important in future to cherry pick the cases which involve more serious injury, but these are more complex and far more risky than having a practice whose bedrock is whiplash claims. With no win no fee and the fact that the lawyers subsidise the claims as they proceed, getting it wrong on these cases could lead to a practice demise far quicker than in the current market, so there may be an element of survival of the fittest which will separate the men from the boys anyway.
What do you think ?