Personal injury market – contingency plans and strategies ready for the 2020 reforms.
14 Aug 2018
New legislation set for April 2020 (increasing small claim limit for PI claims, introducing a range of fixed costs tariffs, encouraging more litigants in person) will negatively impact on the revenues and margins of PI law firms and claims management companies (CMCs). In the next year or so, it is likely that these providers will embark on contingency plans and strategies ready for the 2020 reforms. These include:
- More mergers and acquisitions as smaller vulnerable players continue to leave the market or become part of a larger group.
- Adding related business activities to the core PI claims business to increase revenues and rely less on just low value PI work. Activities such as accident management services, vehicle recovery and repair, replacement vehicle hire, damage assessment, and medical care/rehabilitation services.
- Larger PI firms and CMCs investing more in new technology to further commoditise the claims process to cope with the new lower value claims landscape.
- Leading general practice PI firms already reducing their dependence on this sector and expanding in other consumer law areas.
- Some PI firms tried broadening their services by exploiting the increase in clinical negligence cases. The results of this have been mixed largely because the expertise needed to deal with complicated CN cases does not come overnight. Some providers are now rolling back this approach and looking at other possible new income streams, for example housing disrepair claims.
- More restructuring of many PI practice teams.
- The emergence of new business models to streamline the claims process, reduce costs, share technologies, e.g. law firms joining forces with insurance companies, CMCs setting up law firms via ABS, legal providers setting up integrated businesses with accident management and rehabilitation suppliers.
- Further increases in digital marketing spend and more law firms looking at setting up separately branded PI websites to grab more clients via the Web.
Further analysis of the PI market including market size and trends, key developments and issues, key supplier profiles, supplier opinion survey, future trends and forecasts in the Personal Injury Market Report 2018 frm IRN Research. See www.irn-research.com/market-research-reports for more details.