Labour personal injury lawyers fee complaint

The Labour Party has been accused of "filling its coffers" with referral fees for personal injury lawyers who are said to force up the cost of car insurance.

The party receives a fee of £250 plus VAT every time it refers a supporter seeking accident compensation to a firm of solicitors, the Daily Mail reported.

The fees have been blamed for the spiralling cost of motor insurance premiums.

A note on the legal services section of the party's website suggests the claims are passed on to Flint Bishop Solicitors.

It reads: "If Flint Bishop Solicitors accepts a personal Injury instruction from a client via Labour Legal Services, Flint Bishop will pay the Labour Party a referral fee of £250 plus VAT for each instruction."

Justice Minister Jonathan Djangoly told the newspaper: "Hard-working people are paying the price for Labour's shameful insurance racket.

"It is no wonder that Labour won't fully back our proposals to abolish referral fees when they are exploiting the current system to fill their own party coffers at everyone else's expense."

But Labour's justice spokesman Andy Slaughter said the proposed ban was "strange", adding: "It is not clear how organisations such as those campaigning for people with spinal injuries and asbestos-related illnesses, who refer people to experienced lawyers in return to for help with funding their activities, will be able to continue their important work if all referral fees are outlawed".

The average price for comprehensive car insurance cover reportedly rose by 40% in the year to March, from £636 a year to £892, and had reached £923.90 by the end of June.

A Labour Party spokesman said: "In common with many voluntary organisations, The Labour Party offers a number of benefits to members and a free legacy service is one of them. Any arrangements would be reviewed in the light of changes in legislation."

PA