Insurers auctioning off personal injury claims to the highest bidder?

leelovesdeals

I just saw this story about insurers auctioning off claims to the highest bidder:

http://www.thisismoney.co.uk/money/cars/article-2150760/Insurers-auctioning-injury-details-claims-lawyers.html

It says:
Motorists’ premiums are going up because insurers are auctioning off personal injury claims to the highest bidder, a lawyer warned last night.

John Spencer, who worked at firms which used to engage in the practice, said insurers were conducting auctions among solicitors for bundles of claims as part of a ‘morally repugnant’ money-making scheme.

For years, insurers have been selling personal injury cases – usually drivers involved in accidents – to solicitors for ‘referral fees’, a commission which lawyers must pay to represent individual claimants.

But recently, the practice of conducting referral fee auctions among solicitors for bundles of cases has grown among several major firms.

The price tag of these bundles of up to 2,000 cases is influenced by the degree of injuries sustained by specific claims. Prices of between £300 and £800 are not unusual.

This, said Mr Spencer, was ‘essentially putting people’s misery up for sale to the highest bidder’.

And because the system encourages more claims than may otherwise take place, it means everyone’s premiums will eventually rise.

Mr Spencer has launched a campaign against ‘commercial bullying’, and has urged consumers to challenge their insurers to end the practice.

The director of Spencers Solicitors said: ‘The auctioning of personal injury claims is yet another representation of just how morally bankrupt the personal injury system is in the UK, and is a distasteful de-humanisation of the suffering of injured people.

‘Although such auctions may be 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.’

The charging of ‘referral fees’ will be banned from April 2013, but Mr Spencer said the practice was accelerating, and firms were looking at ways of establishing similar schemes when the ban is in place.

Mr Spencer said referral fees often led to insurers putting people with customers who are not appropriate, or may encourage them to settle earlier than is best for them.

He said insurers were also putting pressure on claimants to settle for a fixed sum, even before a medical examination has been carried out.

The figure can be a large amount, but is often less than the person would have received after a medical report and taking the case to law.

Mr Spencer added: ‘The man and the woman on the street don’t appreciate what is going on and would be pretty outraged if they did.’

There's also more details at http://www.injuryauction.co.uk

I had no idea this was happening? Has anyone had any experience of this?

Quentin

This has been going on for some time.

If you need a PI solicitor, then you can cut out the insurer getting a commission like this and get one yourself.

Google cashback injury solicitors to find offers of £100s for giving them your business.

Annieddiva

This sure does happen!!! I had a RTA on 20 March, someone drove into the back of me, I was in shock and only managed to give my name/home phone to the other driver. I phoned my insurer on 21 March, and someone on 23 March called on behalf of my car insurer to deal with my injury. My car insurer knew other customers had been duped too and I am now working with my car insurer to get to the bottom of this - they always fail to answer how my details were leaked despite them being the only ones in the know! I am now considering escalating this - as the car insurer concerned do not appear to be doing very much to help protect their remaining customers.....it truly stinks to high heaven!!!!!!!!!