Insurers, be careful what you wish for

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16th September 2011

For many years now the Insurance Industry has complained noisily about the practice of solicitors paying referral fees to third parties, known as "claims farmers", to buy claims.

Ken Clarke and the Government has now decided to ban this practice despite saying only as recently as early summer that they had no plans to ban referral fees.

So why the change of policy?

The change in approach appears to have come about as the Government has finally caught onto the fact (which the rest of us have known for two or three years) that insurance companies are the biggest sellers of accident claim leads.

Yes, that's the same insurance companies which have continually complained about referral fees.

Admiral now ask us to feel sorry for them as they will lose many thousands of pounds from having to stop the sale of these claims and say that motor insurance premiums will rise as a result. You couldn't make it up!

Without wishing to appear too cynical on this subject of legal reforms in personal injury cases, it does lead one to wonder whether the Government truly has a grip on the changes they are proposing and perhaps insurers should have been more careful for what they wished!