In an attempt to curb the ‘compensation culture’ and rising insurance policy charges, the government is to ban all referral fees for personal injury claims. It says the current system, whereby personal injury details are sold on by insurance companies, has led to rising insurance costs.
Justice Minister Jonathan Djanogly said that motorists were seeing their premiums hiked as insurance companies tried to cover the costs of more and more compensation claims. "Many of the claims are spurious and only happen because the current system allows too many people to profit from minor accidents. People are being allowed to claim at no risk to themselves." He said the ban, to be applied in England and Wales, would make claimants think harder about suing, and give insurers an incentive to pass the savings on to customers.
Specialist injury claims solicitor, Imogen McMillan, comments "Proposals currently before Parliament will mean that people making the claim will have to pay a success fee - which will be capped - rather than the defendant. It is hoped that a fairer split of costs between parties and lower legal fees will ensue. The new legislation will also ban claims management companies (who advertise compensation claims for accidents), insurance companies and lawyers who charge each other referral fees for passing claims along."
AA insurance spokesman Simon Douglas, welcomed the new proposals and said he hoped it would put an end to organisations selling on drivers’ details without their knowledge or consent. He said "We hope this will bring to an end the practice of no win-no fee cold calling and the relentless advertising by accident management and personal injury firms."
No time scale has been announced yet as to when the ban will be implemented.
For a free initial meeting please call 01202 499255 and Imogen or a member of her team will be happy to discuss any questions you may have.