The Shame Of Personal Injury Solicitor Referral Fees

People wonder how the insurance industry attracts such negative press and poor perceptions from customers. Transparency is key to building levels of trust with custmers but many firms appear to be blinded by Sterling.

We’re talking about solicitor referral fees for customer’s details who are facing personal injury claims. Thousands of people have fallen victim to this massive problem, where insurers are basically auctioning off the names of their insured policyholders who are involved in motor accidents.

The attraction to the solicitor is a case through which they can earn a big fee. The attraction to the insurer is that they can recoup significant revenue in a situation where they’re likely to be paying out on a claim. The attraction to the customer is three-fold. Firstly, they get the wonderful feeling of being banded around like a statistic with a figure on their head. Secondly, they get put in the hands of the highest bidder instead of the person best qualified to retrieve compensation. Finally, to cap it all off, they face long delays whilst they cope with life with a series injury. So winners all around then!

In the worst situations, solicitors are bidding up to £10,000 for the most severely injured policyholders. The more minor injuries, such as wiplash and severe bruising still attract a referral fee of around £500. And how much does the customer see? Nothing. Zero. Ziltch. Zip. Nada. Nowt.

Under Solicitors Regulation Authority (SRA) rules, formerly known as the Law Society (the body which supposedly polices the profession), the existence as well as the amount of the referral fee must be disclosed to the customer. However, this is widely ignored by many in the industry. A mere 6% of firms were found to be complying with the rules set out for them.

On top of this, it is reported that your average road traffic accident case with minor injuries has the legal fees capped at around £1,200. Assuming a referral fee of £500-£600, it is clear to see that the legal representatives must be cutting corners to squeeze out some sort of profit. Add this to incredibly long delays whilst claims are being settled and you quickly build up a picture of the state of personal injury claims today.

How can the insurance or legal industry expect customers to extend trust to them whilst this sort of practice is going on?