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Cuts in Personal Injury Referral Fees Mean Cheaper Car Insurance?

By Principal Lawyer, Clinical Negligence

This weekend saw a first. I laughed out loud whilst reading the financial section in the newspaper.

On one side of the page I was met by a ‘story’ that cuts in personal injury referral fees would lead to car insurance premiums going down. This was more like churnalism than journalism! The piece was clearly an insurance industry press release which had just been cut and paste.

On the other side of the page I was met with the advice that the Office of Fair Trading had announced an investigation into a car insurance cartel rigging the market.

Car insurance premiums have gone up 40% across the board in one year. However if there really is a cartel I cannot believe the naïve idea that banning referral fees will lead to cut in premiums. Time will tell.

Speaking before the ban was announced the chief executive of big car insurance specialist Admiral, Henry Englehardt said, “If referral fees are banned the result would be car insurance prices going up.”

James Bell is a Senior Clinical Negligence Lawyer at Slater and Gordon (formerly Russell Jones and Walker).

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