A personal injury solicitor has accused insurance companies of ‘auctioning cases to the highest bidder’.
John Spencer (pictured), director of Spencers Solicitors, said some insurers had conducted referral fee auctions amongst solicitors for bundles of cases. The price tag of these bundles was likely to be influenced by the degree of injuries sustained by specific cases.
Spencer, a Law Society panel member and co-director of the RTA Portal, is highlighting the practice as part of a campaign to clean up the personal injury system.
He said: ‘Although such auctions may be a perfectly legal and, on the face of it, a commercially astute way to conduct business in this industry, we believe it is ethically questionable as well as morally repugnant.
‘Sadly, such practices are symptomatic of our times, whereby financial gain and profiteering by all players within the current PI system - insurers, claims management companies and solicitors among them - have been put far above the rights and needs of injured persons.’
Spencer accepted that the current claims system was a ‘key reason’ for the escalation of motor insurance premiums. He urged the insurance industry to stop the practice of auctioning off claims before the ban on referral fees comes into force in April 2013.
Spencer’s firm has launched a microsite with more information and an interactive game to shine light on how the claims system works.
Simon Oates of gocompensate.com is quoted on the Law Society website saying "Mr Spencer is to be applauded for raising the issue of referral fees once again and how they impact on us all in terms of inflated insurance premiums.
As a fee earner I used to meet regularly with the shady looking characters entering our firm in their cheap suits, cheap aftershave and sporting a bag that contained details of potential claimants pursued through the High Streets of Britain.
Have any of these files resulted from any 'cold calling'? always anticipating that they would say no despite the fact that they hadn't a clue where the claim came from (nor cared really).
Now some considerable years later I am running gocompensate.com and promote regional panels of specialist solicitors in personal injury and medical negligence claims through their online profile pages enabling claimants to select their chosen solicitor and instruct directly with no referral fees!
No sign of shady characters darkening your office doors, cheap suits or a bag of files going to the highest bidder in sight".
source: lawgazette.co.uk
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