Jack Straw may have been surprised at the referral fees paid by some firms of solicitors to insurers to buy accident claims but I am not; it has been going on for several years and the referral fees have got progressively larger. Accident claims should not be pursued in this way.
Firms of solicitors who buy in work pay huge referral fees to the insurers. It started out about 10 years ago and they paid about £50 per case but insurers got greedy and this has now escalated to between £500 – £1,000 per individual case. Not surprisingly the solicitors will want to recoup this cost and therefore the work has to be done by very junior , often unqualified staff. Costs are cut further by there being very little personal contact – the firm dealing with the claim is likely to be hundreds of miles away and so a client cannot meet the lawyer; all contact is done over the phone.
The way it works is simple. If you have an accident, you give your name and address to the other driver; they report the accident to their insurers who ask for details of the other person involved; your name and address are therefore passed onto their insurance company. The insurance company then sell this information to firms of solicitors on their panel – your name and address is sold as a claim and you are then contacted by the solicitors, with a view to making a claim.
The same principle applies to claims management companies who advertise on TV for accident claims. If you ring their number and give them your name and address, the company then sells your claim onto a firm of solicitors on their panel, again for a large sum of money which has to be recouped by a reduction in service, to you the client.
The claims management companies are often tied to an insurance company (yes, they are involved in these as well) and will sell you an expensive insurance policy in connection with your claims; you may not need this policy and it will not necessarily be the best available policy.
I do not like this concept of buying clients and their claims and do not think it benefits the injured person. At Wards, we do not pay referral fees to insurers or claims management companies. If you are injured as a result of an accident which was someone else’s fault, I advise that you contact a local solicitor direct – cut out the (expensive) middleman.
Wards have a network of branch offices throughput Bristol, North Somerset and South Gloucestershire; if you are injured we have solicitors who can see you at any branch convenient to you and we only accept instructions direct from you – the client.