There has been a lot in the news recently regarding referrals fees – or as Jack Straw described them, the insurers’ ‘dirty little secret’. Here is a quick guide:
A referral fee is a fee which a law firm pays insurers upon agreement that their insured’s’ contact details will be passed to them where this person is likely due compensation having been involved in an accident whereby they suffered an injury through no fault of their own. This fee can be anything in the region of £200 to £1,000! As such, this has seen the advent of claims management companies, or middlemen, who make their money from buying insured people’s contact details and selling them to law firms for profit. This has been happening for approximately 20 years, believe it or not. Further, as the BBC has reported today, the ‘racket’ goes further than just referral fees – It may involve cold calling or texting potential accident victims who have not provided their mobile numbers to any of them directly.
Jack Straw has recently called for the practice of referral fees to be outlawed, and so far, according to a BBC report, only AXA Insurance has said they will cease to accept referral fees for claims. At The Injury Lawyers, we are proud to say that we have never paid a referral fee for any of our claims. We are proud that all of our clients have come to us without the need of a referral fee, but instead on the basis of the reputation we have built up over the years of dealing expertly with injury claims. I am now going to shortly outline why you, when choosing your quality lawyer to deal with your injury claim, should avoid one who has paid a referral fee for your claim.
At the beginning of this blog, I noted that a referral fee could cost anywhere between £200 and £1,000. If your solicitor has paid a referral fee for your claim, they will no doubt try and recoup some, if not all, of this fee from your compensation. If, alternatively, your injury lawyer works on a no win, no fee basis where they do not charge you for their work, but have still paid a referral fee, I would suggest that this means they will provide you with lower levels of service as they do not have the money to spend on providing you with a proper one. After all, they have already spent possibly £1,000 on paying for your referral fee, so they will have no choice but to try and save that money somewhere else. I would also suggest they are more likely to harass you; after all, you will have cost them possibly £1,000, and if you are not as ‘helpful’ as they would like you to be with your claim, they may bombard you with texts and calls to make sure they get your claim through and confirm your instructions for them to pursue.
If you want a quality service at no costs, you should instruct an injury lawyer working on a genuine no win, no fee agreement, and go with a firm that has not paid a referral fee for your claim. Only this way will you get an uncompromised service for no cost at all. Give The Injury Lawyers a call today for a great service for your claim!
