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Claim referral fees to be banned

By: Elizabeth Smythe
09 September 2011

The government has announced its intent to ban insurance firms from selling motorists' details to injury claim companies, The Independent reports.

The move is being taken in an attempt to halt the UK's growing 'compensation culture' and to reduce the cost to British road users, who pay through increasing car insurance premiums. 

It is hoped a drop in claims means that savings will be passed on to motorists, which is good news for hauliers who are hiring drivers, who may well see their insurance quotes dramatically decrease.

Currently, some unscrupulous injury claim companies pay insurance firms for the names and contact details of those who have just been involved in an accident.

They then persuade the individual to launch a compensation claim for the incident, at no risk to themselves.

Justice minister Jonathan Djanogly was adamant that action had to be taken to stop the "sick culture". 

"Many of the claims are spurious and only happen because the current system allows too many people top profit from accidents and incidents," Mr Djanolgy told BBC News.

"Referral fees are one symptom of the compensation culture problem and too much money sloshing through the system."

"Honest motorists are seeing their premiums hiked up as insurance companies cover the increasing costs of more and more compensation claims."

The timescale for implementation is still to be confirmed.

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