PI Brief Update

Comment on The Transport Committee Report - Susan Brown, Prolegal

14/02/12. The Transport Committee in its follow-up report published on 12th January shows that it has considered the issues, asked sensible questions, listened to the answers and thought about the issues again in the light of them. High levels of motor insurance premiums for young drivers in particular, but for all drivers in certain black-spots around the UK (including famously Jack Straw's Blackburn constituency) are a serious problem, although middle-aged drivers living in the south-east with comfortable no-claims bonuses may wonder what all the fuss is about. The Committee correctly concludes that the high levels of premium are the result of dysfunction within the motor insurance market itself. Insurers themselves seem to recognize that they have been incredibly stupid in allowing a situation to arise where, by accepting referral fees from solicitors, credit-hire companies and garages, they have created a monster that has grown too big and too strong for them to control. The Committee recommends that the ban on referral fees, to be implemented under the Legal Aid, Sentencing and Punishment of Offenders bill, be extended beyond personal injury claims to cover all referral fees, and that the focus be the prohibition on insurers receiving the referral fees. It also echoes the views that have been expressed by all who understand the industry, that a ban will be ineffectual now that non-lawyer ownership of law firms is permitted.

Uncontroversially, the report recommends action to control the insurance industry's flagrant disregard of data protection legislation, and the activities of some of those in the supply-chain in the use of cold-calling and unsolicited...

Image ©iStockphoto.com/Mark-W-R

Read more (PIBULJ subscribers only)...