The Transport Select Committee has missed an opportunity to call for a ban on referral fees for motor claims, according to the Lloyd’s Market Association.
The LMA has said that simply making referral fees for motor claims more transparent, as recommended by the transport committee inquiry, will do little to control costs or reduce premiums for motorists.
Commenting on The Cost of Motor Insurance report, David Powell, LMA underwriting manager, said: “It is disappointing that the committee report is only calling for increased transparency of referral fees rather than supporting Lord Jackson’s recommendation to ban them outright.
“Given that referral fees inflate legal costs and reward middle men for encouraging unmeritorious claims, we believe that the removal of these fees would lead to fewer such claims as well as providing a clear case for reducing fixed legal fees in injury cases, with savings to be passed on to customers.”
Mr Powell concluded: “We agree with the report’s conclusion that the debate around how to reduce casualty rates amongst young drivers has stalled in recent years, with little or no progress achieved by the government since the last review of this issue in 2007.
“We welcome the recommendation for the government to publish a public consultation within the next six months and the LMA urges the government to consider measures that will actually reduce the risks presented by novice drivers.”
Medico-Legal News Source: PostOnline
