The Association of British Insurers (ABI) is expected to call on the government to take compensation claims out of the courts when the UK insurers' trade body publishes its recommendations shortly, reports suggest.

According to The Scotsman newspaper, the ABI is expected to ask for an independent arbitration system, similar to one already in place in Ireland, which would asses claims quickly and without the need for legal costs. The organization is also expected to ask for greater powers to be given to judges to throw exaggerated claims out.

The publication of the government’s compensation bill has sparked debate in the industry on how to tackle the problem of high legal costs and fraudulent claims. The ABI, which has already given support to the bill, believes the current system is failing claimants. The organization said that claims take too long – citing the example that the average time from incident to settlement in employers’ liability is around two years – and is too expensive, as legal costs generally add 40% to claims costs.

A spokesman told The Scotsman: Many genuine claimants are deterred from claiming because the system is slow and expensive. Many ill and injured are not getting the care and rehabilitation they need.