In the Media

Call to halt referral fee ?auctions?

PUBLISHED May 28, 2012

Monday 28 May 2012 by John Hyde

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 2014.

Spencer's firm has launched a microsite with more information and an interactive game to shine light on how the claims system works.