In tackling fraud, we must be careful not to deny access to justice to genuine accident victims

First the news on referral fees: it looks as if the wheels of the law won’t be grinding as slowly as usual.  There is a discernible following wind behind the September announcement by the Ministry of Justice that referral fees in personal injury claims are to be banned, with plenty of media coverage driving on the calls for reform.

Indeed, referral fees in other sectors of the law are now being questioned, with the Sunday Times recently exposing the payment of referral fees in socialite divorces. One divorce lawyer is alleged to have paid fees of up to £100,000 to friends and acquaintances for sending unhappy couples her way. If true, no doubt she has been complying with the Solicitors’ Code of Conduct, but surely the payment of such bounties cannot but add to what is claimed to be the ‘compensation culture’ which ails contemporary society.

On, then, to what continues to concern me about reform in this sector. My thoughts are prompted by the fact that tomorrow I will be attending an annual conference on fraud at the Millennium Hotel in Mayfair, London. The majority of individuals present will be claims managers and fraud specialists from insurance companies, and the aim of the conference is to discuss “the industry's ongoing collaboration to achieve its fraud prevention goals”.

As vice-chair of the Motor Accident Solicitors Society, it is important that I am at the conference, both to learn more about current concerns in the insurance industry but also so that I can monitor the extent to which government reforms could have unintended consequences for injured people and road accident victims. Put simply: everyone agrees that fraud is wrong, but in combating it we must be wary of creating an environment in which genuine victims are denied justice.

Tomorrow’s conference will probably see discussion of the practice of ‘fronting’ on motor insurance policies. This scam occurs when an older, more experienced and lower risk motorist is insured as the ‘main driver’ of a vehicle. In truth, the vehicle is driven and often even owned by a younger driver, who is then added to the policy as a ‘named driver’, bringing down the cost of their insurance cover. The main culprits are parents – some 36,000 of them, according to the Motor Insurers’ Bureau. Some even pass off the younger driver as their spouse or partner, which reduce insurance costs yet further.

There is no doubt that ‘fronting’ is a valid topic of debate, and something that the insurance industry is fully entitled to tackle. But returning to referral fees, whilst the debate and appetite for reform continues apace, one senses that the government is now grappling with the huge and multifaceted problem of condensing to law the appropriate changes. This is not easy, and nor is it something that should be rushed. It is very clear that a holistic and thorough approach is appropriate: without it, change may cause more harm than good.