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Consumers to benefit from referral fee ban?
Consumers could find that the cost of motor insurance is reduced by the government's ban on referral fees.
Announced by the Ministry of Justice, the ruling is set to help tackle the UK's compensation culture - a trend that has pushed up the prices of premiums.
Justice minister Jonathan Djanogly highlights that 'no win, no fee' schemes allow middle men to profit, while consumers are forced to pay more for their policies to cover the resulting costs incurred by insurance brokers.
"Many of the claims are spurious and only happen because the current system allows too many people to profit from minor accidents and incidents," he notes, adding that the government will go further to tackle the problem and thereby reduce policy prices.
The move has been supported by a number of insurance organisations and firms, including the Association of British Insurers, which suggested that the government should also look to cut legal costs currently faced by consumers with valid claims.
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Announced by the Ministry of Justice, the ruling is set to help tackle the UK's compensation culture - a trend that has pushed up the prices of premiums.
Justice minister Jonathan Djanogly highlights that 'no win, no fee' schemes allow middle men to profit, while consumers are forced to pay more for their policies to cover the resulting costs incurred by insurance brokers.
"Many of the claims are spurious and only happen because the current system allows too many people to profit from minor accidents and incidents," he notes, adding that the government will go further to tackle the problem and thereby reduce policy prices.
The move has been supported by a number of insurance organisations and firms, including the Association of British Insurers, which suggested that the government should also look to cut legal costs currently faced by consumers with valid claims.
Copyright
Published: 12/09/2011
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