Peer charged with assessing compensation culture echoes Jackson’s criticisms of referral fees

The government’s health and safety tsar has given his full backing to the Jackson Review’s recommendations for curbing the spiralling cost of claims litigation.

Lord Young of Graffham, who has been commissioned by prime minister David Cameron to tackle the growth of ‘compensation culture’ as part of a wider-ranging review of health and safety legislation, said: “I fully support the recommendations set out in Lord Jackson’s report.”

He said: “I am interested in putting in place a system where compensation awards properly reflect the injury incurred, do not include disproportionate fees for lawyers and referral agencies, and can be bought to a conclusion as swiftly as possible.”

The peer, who served as secretary of state for trade and industry in Margaret Thatcher’s government and will be reporting to Cameron later this summer with his recommendations, also criticised the payment of referral fees by lawyers to brokers and accident management companies. The review recommended that the practice should be banned.

“The role of referral agencies in exacerbating fears around health and safety is a genuine concern,” Young added. “These agencies encourage individuals to believe that they can easily claim compensation for the most minor of incidents and even be financially rewarded once a claim is accepted.”

Lord Young’s comments were a fillip for those concerned that the change of government would lead to the Jackson Review being sidelined.

AXA managing director of claims David Williams described the peer’s comments as “wonderful” news. He said: “It’s good for the industry and good for the man in the street, and we should give Lord Young all the help we can.”

Forum of Insurance Lawyers president Dan Cutts said: “Hopefully Lord Young's report will add some momentum to Lord Justice Jackson’s suggested reforms. Personal injury claims also need to be seen in the context of society as a whole. The ultimate cost falls on policyholders and the state, and so it is only fair that transactional costs are proportionate.”

Click here to read our Q&A with Lord Young.