Unscrupulous claims-management firms are to be banned from selling information about people injured in accidents.
The Government will today announced that so-called "referral fees" are to be outlawed in an effort to curb the "compensation culture". Ministers say the practice has created an industry of "ambulance chasers" who target accident victims.
Insurance companies inevitably pass the cost of higher pay-outs to customers in the form of higher premiums.
Some firms target people who had suffered accidents through television advertisement or text messages to make a "no-win, no-fee" claim.
Jonathan Djanogly, the Justice Minister, said last night: "Honest motorists are seeing their premiums hiked up as insurance companies cover the increasing costs of more and more compensation claims. Many of the claims are spurious."