David Prosser: How to put the brakes on personal-injury claims

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The Independent Online

Outlook Admiral, the car insurer that shocked the market yesterday with results mired by the cost of personal-injury claims, has an odd take on the debate about reforming the law. Unlike the Association of British Insurers, it does not want a ban on referral fees, earned by insurers that pass claims to lawyers, but a cap on legal fees.

To be fair to Admiral, its motivation does not appear to be a cynical regard for its own referral income, since this accounts for just 5 per cent of profit. Rather, it says a ban would not attack the root cause of the problem – presumably greedy lawyers persuading people to sue insurers. That may be true, but a ban would at least make it more difficult for such lawyers to find would-be clients, a useful first step.