A hot topic in the news recently has been the issue of referral fees highlighted by Jack Straw – the issue of insurers selling their customer’s information to law firms for profit. Now, you may be thinking – what has this got to do with the amount of compensation I will get for my whiplash claim? Well, if you read on, you’ll see that it may have everything to do with it!
Relevance…
If you haven’t caught this latest news, I will give you a brief outline:
A constituent of Jack Straw had an accident and was subsequently bombarded with texts and calls for offers to take his claim on. Upon being notified of this, Jack Straw made a bid to find out how these various companies got his constituent’s personal information, including his mobile number. Jack Straw met with two major insurance companies who admitted to selling their customer’s information for profit. This has created much controversy, and has been reported in newspapers as a ‘racket’ and even against the spirit of data protection.
This may be an issue which is new to some people; however, here at The Injury Lawyers, we have been writing about this for some time.
Legal Expense Insurance
Legal Expense Insurance (LEI) and / or Motor Legal Protection are both names for what we at The Injury Lawyers have been educating our blog readers about. You may recognise these terms as they may be attached to your insurance policy already, and you may also be paying for the privilege of having it there. Insurers tell you that having this on your policy covers any legal costs you may incur if you bring a claim for personal injury after an accident. This indeed may be true; however, if you go to any good no win no fee law firm (depending on the agreement), this is also the case.
The incentive to insurers to offer this is – a) they may make profit from you paying for the LEI to be attached to your policy, and b) they may make a profit from selling your claim onto law firms or referral firms – it has been reported that this can be as much as £1000 per claim!!!
The Impact of LEI on your Compensation
The big question is:
If a law firm has paid as much as £1000 for your claim, therefore reducing their potential profits from the outset, will they give you 100% your claim?
The answer to this, is possibly not.
If a law firm has already reduced their profit margins, they may be inclined to work less on your claim in order to redress the balance. This may mean that you get a poor service, and that they are not willing to fight tooth and nail to get you the best possible amount of compensation. Simply put, they do not have the money and resources to do so.
Many independent law firms that do not pay referral frees offer a fuller service – i.e. they will arrange for you to have private medical treatment at no cost to you, or they will arrange for your vehicle hire and/or repairs following a road traffic accident to be sorted out. These all may be services that law firms who have paid for your claim are not able, or are not willing, to provide for you. However, if you go to a law firm directly, you can research them for yourself and find out what services they offer, and if they’re right for you.
If you require any further information regarding the above please feel free to give The Injury Lawyers a call.
