‘Jury is out’ on whether the referral fee ban will work

‘The jury is out’ on whether the Government’s ban on motor car insurance referral fees will be successful in reducing car insurance rates, says one personal injury law specialist.

Furley Page law firm partner Neille Ryan, who has been a campaigner for referral fee reform, said that he had mixed feelings upon hearing the news that the Government will be banning referral fees.  The law firm partner said that doing so is most definitely a step in the right direction, but he was unsure as to how effective the ban will be in bringing premium prices down to make discount car insurance more readily available.

Calling it ‘scandalous’ that car insurance companies should be permitted to hit motorists with premium price increases and then blaming it on a so-called ‘compensation culture’, Mr Ryan said that the practice was simply a ‘smokescreen’ for rampant greed on the part of these insurers.  Legal firms have been maligned for fighting for personal injury compensation for their claimants, the legal expert added, yet insurers have been selling the personal details of these claimants to so-called ‘ambulance chasing’ solicitor firms.

While the car insurance industry has been quite vocal in regards to how much they are suffering under the yoke of oppressive claims figures, it has been notably silent regarding the scandal of selling claims details to solicitors.

Industry experts are gratified to see the Government stepping in to ban the referral fee practice, but express concern over how strong a grasp Parliament has of the issues behind referral fees.  Questions of whether such a ban could be enforced effectively were posed by industry insiders, and concerns were also expressed regarding the definition of a ‘referral fee’ as interpreted by the Government, with the fear that a loose interpretation could lead to insurers finding loopholes to continue to charge fees to solicitors.

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