According to an article by nick Hilborne @ Legal Futures, ”some of the larger players in the personal injury (PI) market are set to merge while others will have to restructure, a report has predicted.
IRN Research warned that the value of the personal injury market would shrink by 1.5% this year and remain static in 2021 before recovering over the following two years.
Researchers said the market had reached a “watershed moment”, with the increase in the small claims limit for RTA cases to £5,000, which had been “hanging over the market” for months, now scheduled for April next year.
“Up to now, many of the purchases of PI firms, teams and caseloads have been larger players buying smaller portfolios but some of the larger players have a high volume of business in the RTA sector.
“Mergers between some of the larger players are likely while other larger players will have to restructure their PI practices and teams.”
The UK Personal Injury Market Report 2020 said the arrival of the new digital portal for litigants in person in April 2020 “may create demand” for DIY templates and advice on navigating the portal.
New business models would emerge “to streamline the claims process”, reduce costs and share technologies, such as law firms joining forces with insurance companies and claims management companies setting up law firms via alternative business structures.
IRN estimated that, based on firm revenues and market size, the largest 12 personal injury law firms took a combined share of the market of over 30%, making personal injury “the most heavily concentrated sector” in consumer law.
However, it said that, despite firms “leaving the sector, merging, or closing their PI practices”, there were “still too many firms in the sector”.
IRN predicted that “smaller vulnerable players” would continue to “leave the market or become part of a larger group”, while expanding PI specialists would continue to buy books of work from others.
“The long-term decline in RTA claims has been exacerbated in the short-term by the coronavirus pandemic with a drop in vehicle journeys during the lockdown.”