AXA UK is part of the AXA Group, a worldwide leader in financial services with over 200,000 employees and 95 million customers.


The cost of motor insurance in the UK has been rising steadily in the past few years since changes were made to the procedure for making claims for compensation. Despite the increased safety of modern motor vehicles there has been a dramatic increase in the numbers of people making claims for personal injury following a road accident, with whiplash claims dominant amongst these. In hard numbers since 2000 there has been a 100% increase in the number of motor insurance injury claims over the period to 2011. This has resulted in increased premiums for motorists and a loss, in 2011, for UK motor insurers of £425m.

Part of the problem is that Claims Management Companies (CMCs) and Personal Injury (PI) lawyers have been allowed to pay so-called ‘referral fees’. They were allowed to pay these by law to credit hire companies, garage repair shops, assessors and others – essentially anyone who had knowledge of a motorist involved in a road traffic accident. They were also able to fund these payments because the fixed fees payable to lawyers dealing with PI cases were and remain far too high. At their peak referral fees themselves were averaging around £800 per case.

The call to action

AXA has long supported calls for the Government to implement the entirety of Lord Justice Jackson’s reforms to civil litigation in the UK. It also saw that referral fees had become a totemic issue albeit not the silver bullet required to resolve the entire issue around increasing costs of PI claims in the UK and the rampant compensation culture that was emerging. In order to move the agenda on, focus the attention of policymakers and media audiences AXA, with the support and counsel of Cicero, took the decision on 28 June 2011 to announce a unilateral ban on referral fees. Henceforth the company would not accept referral fees from personal injury lawyers.

The outcome

Over the coming months AXA’s CEO, Paul Evans, appeared before the Transport Select Committee to give evidence, the PM announced a Number 10 summit to look at the issue of the rising cost of car insurance and Justine Greening, then Transport Secretary organised an interdepartmental meeting with industry.

On 1 May 2012 the Legal Aid, Sentencing and Punishment of Offenders Act gained Royal Assent and included an explicit ban on referral fee payments.

The future

Cicero continues to work closely with our client to realise the full implementation of the Jackson reforms and to ensure that excessive costs are stripped out of the compensation process. The aim is to ensure that genuine claims can be met speedily and appropriately recompensed whilst lowering costs for the tens of millions of drivers in the UK.