Daily Insurance Industry News
Daily Insurance Industry News
Thursday 15th of November 2018
April 13, 2011

40% rise in motor premiums fuels referral fee debate

by Gill Montia

Story link: 40% rise in motor premiums fuels referral fee debate

The Association of British Insurers (ABI) is calling for a total ban on referral fees, which involve details of potential personal injury claimants being sold on to solicitors and claims management firms.

Last month, the ABI welcomed Justice Secretary Ken Clarke’s confirmation that no-win-no-fee rules will be reformed, saying the proposals would put the brake on runaway legal costs.

But the Association is also demanding an outright ban on referral fees, alongside new figures released by the AA showing that the average motor insurance premium has risen 40% over the last year.

The ABI’s director of general insurance and health, Nick Starling, says: “Enough is enough. Putting the brake on ambulance-chasing lawyers and claims management firms cannot come a moment too soon.”

He adds: “Motorists have rightly had enough of paying for excessive legal costs, which add an extra 10% to the cost of motor insurance.”

According to Mr Starling: “It is vital that the Government acts to outlaw referral fees, as part of its wide-ranging reforms to civil litigation”.


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