The insurance industry has launched a plan for a faster and cheaper method of dealing with personal injury claims.
Insurers say they are prepared to pay up more quickly.
The Association of British Insurers (ABI) says an arbitration system should be set up to hear all personal injury claims worth up to £25,000.
It should decide all claims within six months, with a court case only as a last resort.
The ABI says the present system based on court hearings takes too long and wastes money on excessive legal fees.
According to the ABI, the average personal injury claim takes three years to settle because the present system is based on adversarial court hearings.
As a result claimants rack up legal and other costs amounting to about £2bn a year.
The ABI's director general Stephen Haddrill said: "Our proposals are a blueprint for much needed reform of the personal injury compensation scheme. Too many people are waiting far too long to get a fair payout."
Copy the Irish?
The ABI's plan points to a recent change in Ireland as a way forward for the UK.
An independent body - the Personal Injury Assessment Board (PIAB) - was set up in Ireland last year.
The ABI says that claims there are now decided three times quicker than before, costs have been cut by 75%, but there has been no decrease in the amount of compensation being paid out.
According to the ABI, the main features of its plan would include:
- An easy to use claim form.
- A three-month window for insurers to accept or reject claims.
- 3 months for insurers to make an offer of compensation.
- A public scale of compensation for specific injuries.
- Free legal advice for claims above the new £25,000 limit.
- Court cases as a last step if the independent mediation fails.
- Financial penalties for claimants or insurers if they behave unreasonably by wasting time or making exaggerated or frivolous claims.
Under this system, the ABI believes insurers would be prepared, where appropriate, to offer an apology to claimants, accept liability and offer compensation.
The government is already in the process of changing the laws on compensation.
Its NHS Redress Billl, launched in October, aims to speed up the handling of medical negligence cases in England without resort to the courts.
The existing NHS Litigation Authority will be asked to deal quickly with medical negligence claims valued under £20,000.
Last month the government introduced its Compensation Bill, aimed at reining in the wider so-called "compensation culture" in the UK, by regulating the claims industry.