UPDATE 1-UK insurers say court decision saves $480 mln

* ABI sees 300 mln stg in savings

* Direct Line escapes potential 45 mln stg hit

(adds background)

LONDON, Oct 10 (Reuters) - British insurers on Wednesdaywelcomed a court decision on the timing of a planned increase inpersonal injury awards, saying it would save them 300 millionpounds ($480 million).

The Court of Appeal ruling means the increase in courtawards for personal injury will apply only to new claims thatare made after April 1 2013, and not to older claims that aresettled beyond that date.

The increase in awards was recommended last year as part ofan overhaul of Britain's personal injury compensation systemwhich also banned "no win, no fee" lawyers from paying referralfees for accident victims' details.

The decision is a boost to Direct Line, as the Royal Bank ofScotland-owned insurer battles to attract buyers to itslisting on the London stock market.

It had warned it could face a hit of up to 45 million poundsif the ruling had gone the other way.

"Today's decision by the Court of Appeal means that insurerswill not be forced to pass on about 300 million pounds inincreased costs to the premium paying public," said JamesDalton, assistant director of motor and liability at theAssociation of British Insurers.

"We have won a battle against unnecessary costs, but not thewar."

Direct Line, Britain's biggest motor insurer, on Tuesdaynarrowed the indicative price of its shares to between 170 penceand 177.5 pence, in the lower half its initial range.

The share offering looks set to be London's biggest in overa year, despite investor caution over stiff competition andincreased regulatory scrutiny in the motor insurance industry.

($1=0.6251 British pounds)

(Reporting by Myles Neligan; Editing by Matt Scuffham and MarkPotter)

((myles.neligan@thomsonreuters.com)(+44 7971 818 280))