Personal injury: Big players increasing market share
The number of personal injury (PI) law firms has shrunk by more than a third in just five years, according to research which also found a “significant untapped market” of potential claimants.
It identified Carpenters as the biggest PI law firm and Irwin Mitchell the biggest clinical negligence player.
The PI market briefing for the Association of Personal Injury Lawyers (APIL) was complied with IRN Legal Reports, and said information supplied by the Solicitors Regulation Authority showed that the number of law firms which generated 50% or more of their turnover from PI fell from 723 firms in 2018/19 to 467 in 2023/24, a drop of 35%.
Most law firms were relatively small in size, with 57% having five or fewer fee-earners and just 7% more than 50.
There was also a 17% decline between 2019 and 2023 in the number of barristers who said PI was their main area of practice, to around 1,200 barristers, while the number of CILEX members working in PI fell by 40% over the last five years, to just over 2,300.
Figures from the Compensation Recovery Unit for the year to 31 March 2024 revealed that 20 firms represented the claimant in 53% of the 322,922 claims it registered, a figure that has been slowly increasing over recent years.
When measured by claims volumes, Carpenters was the leading player (13% of registered claims), followed by Minster Law (5.2%), Admiral Law (4%), Bott & Co (3.4%) and Bond Turner (2.7%).
The report pointed out that “there are many other large firms with a significant market share which focus on a smaller number of high-value claims”, such as Stewarts, Leigh Day and Irwin Mitchell.
Similarly, NHS Resolution data, based on the amount of claimant legal costs paid, gave Irwin Mitchell the largest market share in 2023/24, with £74m equating to 13.5%. The next largest firm, Fletchers, had a 6.2% market share, even though it actually had more cases than Irwin Mitchell (1,224 to 1,184). But this was a significant jump on 4.9% the year before.
The firms next on the table were Slater & Gordon (3.9%), Fieldfisher (3.2%) and Switalskis (3%, more than twice the figure from the previous year).
Between them, the top 20 firms on this measure had more than half of the clinical negligence market for the first time (51%). The top 10 firms had a 40% share.
The average costs per case for the top 20 firms was just over £55,000, compared to just under £50,000 in 2022-23 and around £45,000 in 2020-21.
The report said that, with claims volumes remaining at depressed levels and fixed fees weakening margins, overall market growth “is expected to be limited over the coming years”, meaning that more merger and acquisition activity was likely to support growth for some firms.
“This will drive further consolidation and lead to an increasing market presence for existing market leaders. An increasingly consolidated market may attract further external investment into the market, including from private equity, which will in turn drive further consolidation.”
Some smaller specialist firms that focus on the limited number of high-value claims would also continue to be successful, but only if they have “the necessary reputation, partnerships and expertise”.
The report added that there were “some debt issues” in the sector. “Ultimately, there is a risk that this results in a debt bubble which bursts. This could pose a risk to firms with high levels of borrowing.”
Meanwhile, a survey of 4,000 people by Opinium commissioned by APIL found that, although one in five said they had been injured or become ill because of someone else’s negligence, 41% had not claimed compensation. This extrapolates to 4.3m potential clients.
Almost four in five of these people said they could have been persuaded to claim but to do so, but the results showed “a focus on monetary compensation is not enough” for most.
“Addressing concerns about the stress involved in the claims process, and providing an understanding of how a PI lawyer could support the injured person to recover and rebuild their life, were found to be equally if not more important.
“The potential cost of making a claim is also a key concern. 42% of non-claimants said that a better understanding of these costs would have been key to making them more likely to claim.”
As well as the well-recorded drop in motor claims since the whiplash reforms of 2021, the report highlighted how a “similar justice gap” has emerged in employer liability claims: while 736,000 workers in 2023/24 suffered a work-related injury which resulted in over seven days of absence or became ill because of their work – 16% more than in 2018/19 – the number of claims halved.
APIL’s analysis also found that women who suffer a work-related injury or illness are three times less likely than their male counterparts to go on and claim compensation.
A separate survey of over 500 claimants by IRN indicated that online advertising (22%) was the single most popular way they found a lawyer, followed by search engines (19%), referral from an insurer (18%), TV/radio advertising (14%), going back to a solicitor used previously (13%) and consumer review websites (12%, up from 8% in 2023 and just 5% in 2020). Comparison websites were used by 7% of claimants.
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