Axa calls for decreased payouts from fixed fee system

Axa, the insurance firm, has again called on the government to step in and put an end to the increasing rise in car insurance premiums.

In June, Axa became the first, and so far only insurance company in the UK, to stop selling details of customers who had made insurance claims to personal injury solicitors.

Earlier this year, Jack Straw, the Labour MP, described referral fees as a racket. Axa now wants the government to reduce the fees personal injury lawyers are allowed to charge under no win no fee arrangements.

The chief executive of Axa UK, Paul Evans, said he welcomed the fact that the government was considering banning referral fees, but pointed out that they were a symptom, rather than the cause, of the increased number of personal injury claims.

He went on to say that a robust review into the fixed fee system was necessary. Furthermore, the new computerised system, introduced by the Ministry of Justice to process low value personal injury compensation claims following RTAs, added to the problem.

Started in April 2010, solicitors acting for a claimant are allowed to charge a fixed fee of £1,200 for each claim they pursue. This fee is to be paid by the defendant’s insurers. Evans believes this figure is too high and should be reduced to £400.

He also spoke about the “whiplash” culture of fraudulent personal injury claims, saying there should be a comprehensive medical evaluation of any muscle damage after a low impact RTA. He pointed out that personal injury claims for motor accidents have increased by 43% in the last three years, but there has been a 10% decrease in the number of accidents!

 

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