Personal injury claim auctions "morally repugnant" say lawyers

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Legal experts have warned that insurers' 'auctions' of individual personal injury claimants will force motorists' premiums to rise.

Personal Injury Law

Some insurance companies have for many years sold personal injury cases to solicitors, with a commission fee securing the right to represent individual claimants such as drivers who have had accidents.

John Spencer, a solicitor who worked at firms which used to practise such auctions, said insurers sought bids from solicitors for claims bundles as part of a "morally repugnant" money-making scheme.

Mr Spencer said such activities are "essentially putting people's misery up for sale to the highest bidder", and will lead to increases in everyone's premiums as unusually high numbers of claims are encouraged.

It was also noted that, even prior to medical examination, claimants are being pressurised to settle for fixed sums. While such figures can be substantial, they are still likely to be less than claimants would have received had medical reports been produced for the courts.

Whilst such activity is currently legal and superficially an astute way to do business he did also say: "We believe it is ethically questionable as well as morally repugnant."

"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."

Due to be banned from Spring 2013, auctions for referral fees are increasing, with the price for bundles of up to 2,000 cases dependent on the levels of individual injuries. Fees of up to £800 are not unusual.

Some firms are already examining ways of setting up similar schemes in order to pre-empt the forthcoming legislation. In a bid to end the practice, Mr Spencer has launched a campaign against "commercial bullying", calling on consumers to challenge their insurers.

Susan Vanden, a partner at Simpson Millar LLP and a personal injury claims specialist, said: "Such activities give a bad name to those genuine professionals in both the insurance and legal professions who act on behalf of personal injury claimants. That premiums might rise across the board due to a dash for the quick buck by an unscrupulous minority is deplorable."


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