Ministry of Justice bans referral fees in personal injury cases

AXA welcomes the decision to ban the payment of referral fees in personal injury cases

9 September 2011

Posted in Financial results

Paul Evans, Group CEO, AXA UK, said, “The ban on the payment of referral fees in personal injury cases is an important step in curbing the compensation culture which has been instrumental in inflating motor insurance premiums. However, it should be recognised that referral fees are, in many respects, the tip of the iceberg.

“As referral fees are directly related to the amount of money lawyers are paid, we also need to see a significant reduction in the fixed fees paid through the Ministry of Justice process. If these fees are not reduced, the ban on referral fees will have no impact on motor insurance premiums. AXA calls on Government to additionally commission a robust review of the fixed fees earned by personal injury lawyers for minor injury claims, so as to eliminate the huge profit margins which encourage the compensation culture.

“AXA also calls on the government to consider how to contain the growth in whiplash claims, which are very difficult to diagnose with any degree of accuracy and to work with insurers and medical bodies to agree formal criteria for the diagnosis of whiplash.&dquo;