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Referral fee schemes simply "reorganised" says John Spencer

February 20, 2014 at 4:30 PM

At the POST Magazine Motor Claims conference last week Insurance companies were challenged by APIL vice president and Spencers director John Spencer.

In a panel session which aimed to examine the impact of recent reforms on motor claims, John shared the platform with shadow justice minister Andy Slaughter, Rob Cummings from the Association of British Insurers and Richard West from Kennedys.

"Injured people have been the real losers in all this change," said John. "No-one can now expect to receive 100 per cent of their damages. I'd be keen to ensure there is empirical evidence to ensure savings are passed on to the public through their premiums."

He told the audience of insurers and defendant lawyers that referral fees "are alive and well - albeit under another name. The loser is the injured person because there is less money to pay for good representation." John later gave further comments to POST Magazine stating:

"Injured people need good information but referral schemes aren't necessarily providing good information. They are designed commercially to attract clients rather than focusing on the needs of an injured person."

"It ties in with Lord Jackson's original objectives in his final report where he envisaged that people would come to organisations like APIL in order to identify expert practitioners that could help them but in the same document he was clear that he wanted to ban referrals so I don't think they're one and the same."

Spencer added he would welcome action as the loopholes in the ban are "so substantial as to defeat the objective of the ban".

"They've simply reorganised the way in which referral works rather than outlaw the practice. Schemes which ensure the client provides details to the solicitor concerned to avoid their being a referral under the provisions of LASPO are one type. The other is using alternative business structures or joint ventures to circumvent the ban in that way."

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