Insurers may be auctioning off personal injury claims to the highest bidder and causing drivers’ premiums to increase, according to the words of one personal injury solicitor.
Much as reports of law firms asking doctors to exaggerate on whiplash claim reports have begun to emerge, it has been alleged that there are others who have been engaging in a ‘morally repugnant’ scheme to make money that involves bidding on bundles of personal injury claims in auctions organised by insurance providers, according to John Spencer. The lawyer, who used to work at law firms that were part of the scheme, said that the insurance industry has begun to move away from charging legal professionals ‘referral fees’ for a single personal injury cases and has instead begun to conduct auctions where bundles of car accident cases are being auctioned off the highest bidder.
These bundles could consist of as many as 2,000 cases, according to Mr Spencer, who indicated that a price as little as £300 – or as high as £800 – is typically paid for them. Meanwhile, premium prices go up because the system encourages many more claims than could possibly ever take place, though Mr Spencer has launched a campaign to raise awareness on the practice, urging consumers to reach out to their insurance providers in order to discourage a practice he called ‘commercial bullying.’
The practice may be within the letter of the law, Mr Spencer says, but while it may be ‘commercially astute’ to do so, the moral repugnancy and ethical questionability of the practice is quite high.