Tees supports
The government is planning to outlaw the payment of referral fees for personal injury claims. This is a step which Tees are happy to support - for too long, claims management companies have been obtaining details of people that have been involved in accidents and selling their details to law firms. Insurance companies have been implicated in this too. Many law firms have felt obliged to play along as the payments can produce a steady stream of work and the payments they have to make can be set against their advertising or marketing budgets.We have always opposed payments of this sort because we believe they conflict with the idea that individuals should have the freedom to instruct the solicitor of their choice. We are fortunate because we still receive new work based upon our reputation. Nevertheless there is no doubt that as a result of referral fees, many people that have had accidents and seek compensation are being "sold on" to other firms.The government is suggesting that referral fees are a bad thing because they fuel the so called compensation culture and they increase costs. There is considerable controversy about whether or not there is a compensation culture; Even Lord Young, asked to look into the issue by the Prime Minister, wrote in his report Common Sense, Common Safety, that the so-called compensation culture is "perception rather than reality". Furthermore, there is no evidence that referral fees increase legal costs - they simply reduce the profitability of the law firm and cannot be claimed back even in successful cases. If anything, they ought to reduce costs (or at least insurance premiums) in cases where the insurance company has received a fee. So although the government appears to be doing it for misguided reasons, this is one proposal we are happy to support!