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.
Issued: 9 September, 2011