Over the course of the past decade the number of road traffic accidents involving personal injuries has fallen, however strikingly, the number of personal injury claims has more than doubled in this period. This mercenary ‘claim culture’ has been identified as one of the main factors in driving up motor insurance premiums by an average of more than 30% in the past year.

The government have identified referral fees for road traffic accidents as a key factor in the increase in personal injury claims and have vowed to put a stop to this. Although a timescale has not yet been agreed to implement a ban on such fees, the wheels are certainly in motion to put a halt on these fees.

A campaign, spearheaded by Justice Minister Jonathan Djanogly and Jack Straw amongst others, is looking to cut out the middle man and consequently begin to reduce the number of claims for injury and subsequently cut the excessive insurance premiums currently borne by car owners.

Otto Thoresen, Director General of the Association of British Insurers states “they [referral fees] add no value and encourage spurious and exaggerated personal injury claims.”

The counter argument to this is that thousands of jobs are at risk and there is no evidence that the writing off of these fees will help reduce insurance premiums.

Public demand would seem to far outweigh this argument put forward by these claim management companies however nothing is yet set in stone, it will be intriguing to see where this campaign heads.

Here at McHale and Co we minimise the number of personal injury claims referred to us from such companies as we believe that the referral fees not only make the whole file less cost effective but more importantly we do not want to risk dealing with fraudulent or unnecessarily exaggerated claims. Whichever way this campaign ends up, the effect on our firm is sure to be small if none at all.