CAR insurance may be compulsory and a pain to pay, but it is extremely important.

Spreading the risk around a large pool of people means that when disaster strikes, the many people in the pool take the financial hit instead of the individual.

It’s tried and it’s tested and it works, even if you don’t like the direct debit leaving your account every month.

But the picture is skewed when the system is taken advantage of - which is exactly what is happening with the personal injury industry.

And the problem has hit extreme levels. Insurers are selling the details of accident victims to personal injury lawyers, who then pursue those victims to represent them in a bid to make ‘no win, no fee’ claims.

This information earns ‘referral fees’ for the insurers.

Some claims are undoubtedly fair and just. But many are not, fuelled as they are by the behaviour of money-grabbing lawyers who see the pound notes rather than the natural justice of the situation.

The story has been given some legs on the national scene in the last few days because former justice secretary Jack Straw has raised the example of a constituent who was plagued with text messages and phone calls after a minor accident.

Mr Straw said the cost of personal injury claims had doubled to �14bn in 10 years, while in 2009 the number of accidents in which someone was hurt was 31 per cent lower than the average for 1994 to 1998.

The industry was now “a racket”, said Mr Straw.

Police forces and accident repair garages have also been muscling in on the act, making money out of sold-on information.

It makes for a sorry mess which the honest driver is paying for.

But what is really very troubling is the government’s attitude, which feels rather negative to say the least.

Justice minister Jonathan Djanogly said the other day that the government would consider a range of issues, including referral fees, but also said that banning such fees would lead to the industry finding alternative ways to make money.

That may perhaps be the case, but it’s also a rather negative position, almost bowing to the inevitable thought that baddies will always win.

Especially as figures from Gocompare.com now suggest that one of every five British drivers have been contacted by personal injury lawyers by text, phone or email.

I’ve got one myself, a text message on my mobile, sent at the end of June, which reads: “You have still not claimed the compensation you are due for the accident you had. To claim then pls reply CLAIM. To opt out text STOP.”

Now I haven’t done either because I assume sending the ‘stop’ message will encourage the texters behind the message; and I have nothing to claim for. But I assume that will not stop the messages, presumably nothing will.

The other figure Gocompare have come up with is that three per cent of people said they had used ‘no win, no fee’ firms to get compensation even though they weren’t badly injured.

That may seem a small figure, but it is having a significant impact on the insurance policies we are all paying.

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