While former Home Secretary Jack Straw’s call for reforms to the motor car insurance referral fee practice may have taken headlines, he hasn’t been the first to comment on the impropriety of car insurance companies effectively selling customer details to personal injury firms.
Furley Page law firm partner, Neille Ryan, had publicly come out against the practice as early as last year when he accused car insurance groups of using the so-called ‘compensation culture’ as a scapegoat while ratcheting up car insurance rates for motorists already feeling the heat from pain at the petrol pump. Last December, Mr Ryan said that it was scandalous that the discount car insurance industry should be permitted to slough off blame for premium price increases in such an underhanded way.
Mr Ryan reacted to the media storm created by the comments of the former Home Secretary by saying that legal firms are being maligned, as they shouldn’t be blamed for fighting on behalf of their clients for compensation when insurers are the ones putting the details of these accident claims up for sale. However, only one major insurer has declared that it will cease in taking referral fees from personal injury firms since Mr Straw’s incendiary comments.
Mr Ryan said he struggled to see how it serves the public’s interest to have insurers sell claims to lawyers while attempting to discourage those victimised by accidents from claiming. This arrangement limits the insurer from having to pay out on a larger number of claims against them while still getting paid for the cases they do sell on to law firms.
The personal injury expert felt, as did Mr Straw, that the Government taking steps in banning referral fees would be the best way to get a handle on the issue. The removal of the fees would result in injury lawyers only offer their legal expertise to those drivers who have genuine claims, he added.