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Thursday, 16 May 2013

Insurers accuse law firms of flouting referral fee ban

It is just over a month since the Government’s ban on referral fees in Personal Injury cases came into force. As we know this was driven by the insurance industry that then used the ban, and the supposed savings, to drive down fees recoverable by victims of negligence. 

It is fair to say that they got virtually all that they wanted.

But, if recent comments from David Fisher of AXA are anything to by, they are still far from satisfied. According to the Law Society’s Gazette he is already accusing firms of flouting the ban and calling for even tighter controls suggesting that the ban – ‘did not go far enough’.

If he has specific evidence of firms acting in breach of the ban then he should make it public.

I have spoken to many firms over the last few weeks. I don’t know a single one that has not addressed the change in the rules. Some firms have already decided that Personal Injury work is not viable and have decided to either close down or run off their existing case loads. Many firms have already had to make staff redundant. All firms spent many hours before the 1st April ensuring that their arrangements were compliant –

Anyone who simply ignores the ban deserves all they get.

Most firms are saying that this is the most difficult time that they can recall after many years of practice. For a leading insurance company to come out with this type of wide sweeping statement is nothing short of an insult. The fact that the comments are made within just a few weeks of the ban suggest another agenda. How can they possibly have any reliable statistics? One suspects that they feel that they obtain even more benefits by striking quickly. After all, they have done quite well out of the changes so far.

I cannot see the government or the SRA taking any action after such a short time. And I’m sure AXA know that. I fear that this is all part of winding up the rhetoric in preparation for what they want most of all – an increase in the small claims limit to £5k which would effectively wipe out access to lawyers for almost all accident victims. 

Watch this space.

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