Banning referral fees

AA Insurance response to Government announcement

9 September 2011

change will help to reduce car insurance industry

change will help to reduce car insurance industry

Responding to the Ministry of Justice announcement today that the Government is to ban referral fees as part of reform of the personal injury claim process, Simon Douglas, director of AA Insurance says:

“We are pleased the reforms being put forward by the Minister will tackle the growing claims culture which is one of the main drivers of rising car insurance premiums.

"So-called ‘referral fees’ have become synonymous with the selling-on of driver details by a range of organisations to claims management firms, usually without drivers’ knowledge.

the reforms being put forward by the Minister will tackle the growing claims culture which is one of the main drivers of rising car insurance premiums

Simon Douglas, director of AA Insurance

The reform of ‘success fees’ and capping of them will discourage many claims from being made in the first place.  We hope that this will bring to an end the practice of no-win no-fee cold calling and the relentless advertising by accident management and PI firms to encourage drivers who may or may not have been injured in a collision, to make claims. 

Provided all of the recommendations, including banning of referral fees, put before parliament become law it will help to reduce car insurance industry claims costs, particularly for whiplash claims and thus reduce pressure on premiums.

Mr Douglas added: “The changes should still ensure that those who are legitimately injured remain able to claim compensation and gain access to legal advice if required.”

(30 September 2011)