Injury claim referral fees to be banned
The government has confirmed it is to ban referral fees in personal injury claims in an
attempt to curb what it says is a “compensation culture”. It argues the current system in
which personal injury details are sold on by insurance companies to lawyers has led to
rising insurance costs. Justice minister Jonathan Djanogly said honest motorists were
seeing their premiums hiked as insurers covered the costs of ever more compensation
claims – road traffic accident claims have been increasing, while other personal injury
claims, including workplace injury and disease payouts, are decreasing. Mr Djanogly
said: “Many of the claims are spurious and only happen because the current system
allows too many people to profit from minor accidents and incidents.” However, he
added that the fees are “are one symptom of the compensation culture problem and too
much money sloshing through the system.” The government‟s Young report and a series
of studies have established that, particularly when it comes to workplace claims,
„compensation culture‟ is a myth. The ban on referral fees comes alongside the civil
litigation reforms put forward earlier this year by Lord Justice Jackson, which were
included in the Legal Aid, Sentencing and Punishment of Offenders Bill (LASPO). Many of
these changes will deny justice to many people with work-related health problems and
injuries, the TUC has warned (Risks 515). It says some of the intended reforms will have
a major impact on the viability of some work-related claims, with solicitors less likely to
take on cases. The government wants, for example, to stop losing defendants having to
pay a “success fee”. The proposals currently before parliament mean people making the
claim will have to pay the success fee, rather than the defendant, which unions say
means the victims of poor workplace conditions will in effect be paying from their
settlement for their employer‟s neglect.
BBC News Online. Legal Week.