Former justice secretary, Jack Straw, recently highlighted the fact that, while the insurance industry continues to complain about the increasing cost of paying compensation claims, it has been positively fostering the claims process by selling cases to their panel solicitors, often where the ‘claimant’ – their insured, had given no indication whatsoever that he or she had any wish to make a claim.

Having been involved in personal injury litigation for many years, the thing I find most surprising of all is that this story, described as the insurance industry’s dirty secret, should have remained unknown to the government or Jack Straw when he was in the cabinet, given that it has been going on for well over a decade now.

Following the newspaper articles and radio interviews involving Jack Straw, the press reported on how the AA and RAC also sell cases, but again, this is something they have been doing for a long time now. The referral fee paid for each case usually ranges from £500 to £1,000 and each of these organisations sells in excess of 10,000 cases per year thus generating millions of pounds of revenue. If they didn’t it is highly unlikely that more than a very small percentage of whiplash claims would be picked up by the claims companies advertising on television and, while those with injuries would be able to pursue their claims without fear of paying any legal fees by going direct to a solicitor of their choice, the overall cost of these claims would in all likelihood decrease significantly from the £2 billion a year quoted by the insurers.

I am in no doubt that if someone suffers a debilitating injury through someone else’s negligence then it should be their right to claim damages. However, as no win no fee agreements are now offered by all solicitors involved in personal injury work, there is absolutely no justification for referral fees and if they were made illegal it would not only ease pressure on insurance premiums but would take nothing away from the public’s access to justice.

For further information on this or any other personal injury / clinical negligence issue please contact David Greenhalgh on 01689 887806 or email david.greenhalgh@cwj.co.uk