A personal injury solicitor has accused insurance companies of ‘auctioning cases to the highest bidder’.
John Spencer, director of Spencers Solicitors, said some insurers had conducted referral fee auctions between solicitors for bundles of cases, with more severe injury cases the most expensive.
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 rise in car 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.