How Will Referral Fees Affect the Personal Injury Fees?

x240-kG2.jpg” width=”1027px” alt=””/>The personal injury sector has been under a lot of scrutiny over the past few years as many debate whether we are beginning to adopt a ‘claims culture’ within the UK. The number of personal injury claims has risen at an extraordinary rate and it looks as though the government are taking steps to try and reduce the amount of ‘false’ claims. Motor accident claims are amongst the most common type of claim that’s currently made.
The government announced that in 2013 they will be banning the payment of referral fees when it comes to personal injury claim cases. They have Broken Clavicle Insurance Settlement stated that this is because the current referral fees hugely inflate the costs involved and also help to encourage the ‘compensation culture’.
This year we have also seen a huge rise in the number of whiplash claims and other road traffic accident claims which has caused motor insurance costs increase dramatically, especially for young drivers. Due to the number of claims that have been made against insurers they have had to increase their prices Workers Compensation Benefits to cover for the money they have lost through large claim payouts. Therefore it is widely hoped that the banning of referral fees will lower the amount of claims made, and therefore encourage motor insurers to decrease the cost of their motor insurance policies, which will help to lower the cost of living.
It is argued that the current system enables too many people to profit from minor accidents which inflates the cost of living for the rest of us through higher insurance payments. The companies which pass of the cases to lawyers are actively seeking potential ‘claimants’ and encouraging them to sue at no risk, due to the ‘no win no fee’ terms. Officials have stated that the only people to benefit from the current ‘compensation’ culture are the ‘middle men’, rather than the claimants themselves. There are many thousands of phone calls made and text messages sent to people all across the UK from companies trying to pass on referrals to solicitors.
Some people still have concerns that the banning of referral fees may not necessarily stop all false claims from coming forward and instead believe that there should be an outright ban on the passing on of injured people’s private details without any consent.
It remains to be seen what type of outcome we will see, but one thing is for sure and that is the fact that we will soon see a big change in the personal injury sector, and those within the industry will be eagerly keeping a close eye on the situation.

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