Although he declined to act when asked to as Justice Secretary in January 2008 I welcomed Jack Straw’s late intervention in the referral fee debate. His proposals to halve the fixed fee for portal claims and introduce a requirement for objective evidence in whiplash claims are, however, ill conceived.
In March the Transport Committee reported that over 40% of personal injury lawyers pay referral fees, the majority, one therefore assumes, do not. The overheads of the majority will therefore be unaffected by the ban and Mr Straw declines to explain why their costs should be arbitrarily slashed.
The current fixed fee for a low value claim was introduced following industry wide consultation and as the Association of Personal Injury Lawyers have highlighted it did not factor in the cost of a referral fee. The notion that a further reduction should be imposed without any consultation is unrealistic although insurers thrown into panic by the loss of referral income are of course screaming for it.
To introduce a requirement for objective evidence in whiplash claims will result in people with genuine injuries being denied compensation. The state of medical science is not yet sufficiently advanced to be able to detect clinical signs for all injuries, although it is accepted by respectable practitioners that genuine neck injuries can be suffered yet not be detectable upon examination. The Courts can do no more than asses the medical evidence and credibility of the claimant who bears the burden of proof. The Judiciary can be trusted to scrutinse and weigh the evidence even if Jack Straw thinks otherwise.
Although right on referral fees, and I agree with his proposals to criminalise the practice, Mr Straw is wrong otherwise and he should quit while he is ahead.
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