The Government has made changes to the no win no fee* approach and there is now a ban on the payment and receipt of referral fees in personal injury claims.
Back in 2011 it was first announced that changes would take place in the industry regarding referring personal injury claims. The BBC News website explained that this was to curb the “compensation culture”.
What does this mean?
In the old system, personal injury details were often sold on by insurance companies to legal organisations.
Justice Minister Jonathan Djanogly said honest motorists were seeing their premiums rocket as insurers covered the costs of compensation claims.
In the BBC News article, 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.
“Referral fees are one symptom of the compensation culture problem and too much money sloshing through the system. People are being encouraged to sue, at no risk to themselves.”
He said the ban, to be applied in England and Wales, would make claimants think more carefully about whether to start a claim, and encourage insurers to pass the savings on to customers. Legal costs overall are likely to fall, meaning lower costs for customers.
April 2013: The state of play on referring personal injury claims
A total review has now taken place in the form of Lord Justice Jackson’s Review of Civil Litigation Costs and there is now a complete ban on referring personal injury claims by insurance companies.
The ban captures all the main businesses involved i.e. solicitors, claim management companies and insurers. If any organisation breaks this ban they will answer to the relevant regulators: the Solicitors Regulation Authority (SRA), Financial Conduct Authority (FCA), the Bar Council and the Claims Management Regulator.
Impact on Accident Advice Helpline
At Accident Advice Helpline, we take the ban very seriously and we can confirm that we adhere to the recommendations made by Lord Justice Jackson. We do not receive any details of people involved in accidents, nor are we involved with referring personal injury claims to third parties. We are a law firm in our own right and any claim you bring before us will be handled by our in-house solicitors.
Instead, we trust that our reputation and the words of our patron, consumer champion Esther Rantzen, ring true with people who have been injured and are entitled to compensation.
If you have any questions about this article or the ban, please call our freephone number on 0800 689 0500. We have someone on hand to answer your calls 24 hours a day, seven days a week. If you think you have a claim, our advisors can talk through the details with you and put you in touch with one of our specialist lawyers.
Alternatively, you can complete our 30-second test available on our website and we’ll be in touch with you shortly.