You may have seen this already but i thought i'd post it here.

GOVERNMENT TO BAN REFERAL FEES

• Government to ban injury claim referral fees
  Insurance premiums up at least 30% in last year
  Ban follows Parkers investigation in to the system

The government is set to ban injury lawyer referral fees as it looks to tackle the ever-growing compensation culture and reduce the rise of insurance costs.

The price of insurance premiums has risen by at least 30% in the last year, with a number of organisations, including the Association of British Insurers (ABI), pointing the finger at the referrals system.

As 'no win-no fee' lawyers look to recoup their costs through the losing defendant, or often the defendant's insurance company, to cover the loss insurance companies are then forced to raise premiums and its UK motorists that foot the bill.

Justice Minister Jonathan Djanogly said: "The 'no-win, no-fee' system is pushing us into a compensation culture in which middle men make a tidy profit which the rest of us end up paying for through higher insurance premiums and higher prices.

"Honest motorists are seeing their premiums hiked up as insurance companies cover the increasing 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 and incidents."

The government says it wants to stop losing defendants having to pay a 'success fee' to reimburse the claimants lawyer for other cases they may have lost.

It says the ban will also mean the person making the claim will have to pay the success fee, rather than the defendant, with the fee capped. The intended result is a fairer split of costs and lower legal costs overall which should also result in lower costs to pass on to customers, it adds.

The ban follows an investigation by Parkers earlier this year in which we found that it wasn't just personal injury lawyers involved in the referral fee racket.

After member of staff had details passed on following an accident with an ambulance, we found that the fees are also paid by recovery companies and courtesy car companies. We also discovered that driver's insurance details were also being passed on by police officers and nurses.

The ABI has welcomed the move by the government. Otto Thoresen, ABI's Director General, said: "We are very pleased that the Government has listened to the insurance industry's campaign for a ban on referral fees. They add no value and encourage spurious and exaggerated personal injury claims.

"It is important that the ban must be watertight and apply across the board. Banning referral fees is an important first step in tackling our dysfunctional compensation system, and needs to be accompanied by a reduction in legal costs and action to tackle whiplash if honest customers are to benefit from these reforms."

Examples of the referral fees system include TV adverts or anonymous SMS text messages that claim a driver is entitled to compensation after an accident.

There is currently no time scale on when the ban will be implemented.

Obtained from Parkers

No timescale yet but at least they're getting the point.