Car insurers push up premiums with injury claims 'auctions'

We are regularly told the car insurance premiums are on the up and up because of fraudulent claims but according to one lawyer, there's another reason your annual cost is sky-high.

Car insurance injury claims auctions
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John Spencer, a lawyer who has previously worked at insurance firms, claimed last night that insurers are guilty of auctioning off personal injury claims to the highest bidding solicitor.

The idea that insurers sell details of personal injury cases to solicitors for referral fees is nothing new, but according to Mr Spencer, many providers are now auctioning referral fees to major UK solicitors' firms for prices between £300 and £800 for a bundle of 2,000 cases.

Since the practice encourages more and more claims, it is likely that motorists will pay the price when it comes to premiums.

Mr Spencer, who has launched a campaign against "commercial bullying", told the Daily Mail: "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 actions 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."

As of April 2013, charging for referral fees will be banned but Mr Spencer, who claims he worked for insurers that indulged in the practice, says some firms are already looking at ways and means of putting similar schemes in place once the ban comes into effect.

He added: "The man and the woman on the street don't appreciate what is going on and would be pretty outraged if they did."

What do you think? Should insurance providers be subject to more stringent controls? Leave your comments below...