The Association of British Insurers (ABI) has welcomed a UK Government move to stamp out excessive legal costs, saying it will give genuine claimants a better deal.

The civil litigation reforms will put a “brake on runaway legal costs”, allowing for legitimate claims to be processed through the courts.

The ABI has been campaigning for the changes and says one of the key areas has been the need to reduce high legal costs in settling personal injury claims – one of the major causes of rises in motor premiums.

ABI Director of General Insurance and Health Nick Starling says the reforms will help those genuine claimants who often “struggle” to get fair compensation under the current system.

He says the Government’s move to implement the full recommendations of Lord Justice Jackson’s review had addressed the injustices of the system.

Adopting the reforms last week, UK Justice Minister Jonathan Djanogly says the system has long been “out of kilter” thanks to “no win no fee” agreements.

“They have played an important role in extending access to justice, but they also enable claims to be pursued with no real risk to claimants and the threat of excessive costs to defendants.

“It can not be right that, regardless of the extreme weakness of a claim, the sensible thing for the defendant to do is to settle,” Mr Djanogly said.

Mr Starling says “ambulance-chasing lawyers and claims management firms” have encouraged people to believe there is a compensation culture to exploit.

“The result has been a slower process for genuine complaints and out-of-control legal costs that end up being paid for by all consumers through higher insurance premiums.

“Motorists who are paying an extra 10% on their motor insurance as a result of high legal costs of settling a personal injury claim can look forward to cheaper insurance in the future.”