Smaller injury pay-outs for riders

Published: 29 April 2013

Motorcyclists will get smaller pay-outs for injury claims because of new 
legislation introduced last week, 
according to a solicitor.

Personal injury solicitor Ed Fletcher says compensation will be slashed following a ban on so-called referral fees, paid by law firms for details of people who might want to make a claim.

Before the ban was introduced on April 1, lawyers could buy details of people injured from insurance 
companies. Those people would then be approached and asked if they wanted to claim.

Critics have labelled this a scam that drives up premiums by encouraging claims for minor injuries. MP Jack Straw branded the practice a “racket” and a “dirty little secret”.

The new legislation also includes a reduction in lawyers’ fees for representing injured people and bans of so-called ‘success fees’, paid by insurers to lawyers for winning cases.

But opponents of the ban say lawyers will make up their losses by deducting from claimant’s damages, representing an end to terms previously offered in so-called no-win-no-fee deals.

Fletcher said: “Solicitors can’t operate at any less than they did before the changes. Therefore the money is coming from the clients damages.” He said up to 25% would be deducted from awards.

Fletcher explained his position in a conference call to MCN with Julian Edwards, Chief Executive of motorcycle insurance broker MCE, which says it has struck a deal with a panel of solicitors to continue offering riders full settlements.

Edwards said MCE had “struck commercial terms” with a panel of solicitors eliminating deductions from pay-outs. Under the deal, solicitors will not be charged referral fees, so “don’t have to pay for winning new claims,” he said

 “We will take care of the passing over of customers to solicitors. We don’t want any remuneration in return.

"Therefore the solicitors can operate on heavily reduced fees from the third party,” he added.

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