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The Lawyer: Putting the brakes on the referral fee merry go round

October 21, 2011 at 9:00 AM

John Spencer writes for The Lawyer on the sale of accident victim information and a culture of profiteering within the personal injury system.

"As you read this, a personal injury lawyer somewhere in the country will be signing off a payment which secures drivers' details from an insurer, a garage or, most probably, a claims management company. En route, data protection laws will most likely have been breached – did you really consent, when you renewed your insurance policy a decade ago, for your mobile phone number to end up on an accident claim marketer’s database? But no matter: the show must go on. And so claim after claim is made, creating a vicious cycle which sees the insurance companies pass on their increased costs by setting higher premiums for all drivers, irrespective of whether they have made a claim."

"To put an end to these practices, a holistic approach is needed. The current system is complex, with any number of strands going off in any number of directions, and we must beware of piecemeal solutions. What, for example, is the Government’s definition of a referral fee? How will the advent of Alternative Business Structures (ABSs) influence the personal injury and insurance markets?"

Read the full article Putting the brakes on the referral fee merry go round on The Lawyer website.

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