AXA UK bans referral fees from personal injury lawyers
AXA UK has announced that, effective immediately, it will no longer accept referral fees from personal injury lawyers. The insurer is also calling for reforms to whiplash injury claims to help eliminate fraud in the insurance industry.
“There has been a huge increase in the number of whiplash and other soft tissue injury claims over recent years, often caused by personal injury lawyers and accident management companies following up on customer data that they have bought from insurance brokers, insurance companies and other parties. Of particular concern is the unscrupulous practice of motorists being encouraged to make claims several years after an accident when it is almost impossible to verify what injury has been sustained, particularly when no injury was claimed at the time of the accident,” said AXA UK in a statement.
“AXA has never sold customer details to personal injury lawyers or accident management companies, and with immediate effect will no longer accept fees from personal injury lawyers when we put our customers in contact with them to pursue valid claims notified at the time of an accident,” the company added.
The insurer said it believes that about half of the recent increases in auto insurance premiums is related to the rise in bodily injury claims. By voluntarily banning referral fees, AXA believes it is a first step to reforming “compensation culture” in the insurance industry.
Paul Evans, Group CEO, AXA UK, said: “As one of the leading insurance providers, we have decided that the only way to address the problem adequately is to lead by example. Over the last few years we have seen an exponential rise in personal injury claims – especially soft tissue injuries – whilst evidence suggests road accidents are decreasing. We have also seen a significant rise in claims made some years after the event which are therefore impossible to prove or to defend.
Other jurisdictions, including many in Canada, have eliminated whiplash and soft tissue claims or instituted a cap on the amount of damages awarded.
“It is unfair and unsustainable that drivers are being disadvantaged by exaggerated injury claims which drive up the cost of insurance. Referral fees have only served to promote an even greater number of injury claims and AXA will stop this practice whilst Government implements the necessary legislation to restore order. I believe this move will be a positive first step in making the system more equitable and, ultimately, benefit customers through more affordable motor premiums,” said Evans.
