As recommended by Jackson LJ some 18 months ago, the Government appears to be minded to implement a ban (although it is unclear how this would occur in practice). The Government has been prompted to set out its position as a result of pressure from backbench MPs – notably former Justice Secretary Jack Straw MP. Specifically this has included securing a debate in Parliament on 13 September to discuss referral fees after introducing a Ten Minute Rule Bill.
Straw will use the debate to apply for leave to “bring in a Bill to reform the regulation and operation of the market in motor insurance; and specifically, to ban the payment of referral fees; to establish new standards relating to the evidence required and damages payable for whiplash; to reform the regulation of the Ministry of Justice’s RTA portal; to set requirement in respect of risk pricing for personal injury claims, and for related purposes.”
The ABI is leading the lobbying effort and AXA has added to the debate, announcing in July that it will no longer accept referral fees from personal injury lawyers. Group Chief Executive, Paul Evans stated “I believe this move will be a positive first step in making the system more equitable and, ultimately, benefit customers through more affordable motor premiums”.
We wait to see whether and, if so how, the Government will act towards referral fees.
Developments on reform are now likely to heat up again. We will continue to monitor and provide updates about these including how such developments may influence Government.