Panel findings contradict Jackson Review recommendations to ban fees

The controversial practice of lawyers paying referral fees to brokers and accident management companies has not fuelled increased compensation payments, according to a new report for the Legal Services Consumer Panel.

The report finds that claims management companies have helped more personal injury claimants to achieve redress, without fuelling a “compensation culture”. It suggests that excessive or fraudulent claims are rare on the basis that insurers settle more than 90% of claims. But it recommends action to tackle pressure-selling by insurers to accept their lawyers.

The panel’s finding on referral fees runs counter to the Jackson Review of personal injury costs, which recommended banning referral fees.