Insurers Auction Personal Injury Cases, Leaving Victims Vulnerable to Exploitation

Strategic Insights -

In a disturbing revelation, a Financial Mail investigation has exposed the practice of major motor insurers in the UK, including AA, Churchill, Norwich Union, and Tesco, auctioning off personal injury cases of their policyholders to the highest bidder. This means that victims of road accidents, at their most vulnerable, are being guided into the arms of lawyers who may not be the best fit for their case, but have the deepest pockets. The solicitors' firms bidding for these cases are willing to spend thousands of pounds on "introduction fees" to secure the business, leaving less for the victim's compensation claim.

Key Takeaways:

  • The practice of auctioning off personal injury cases is widespread among major UK motor insurers, including AA, Churchill, Norwich Union, and Tesco.
  • Victims of road accidents are often unaware that their cases are being auctioned off to the highest bidder, and are instead guided into the arms of lawyers who may not be the best fit for their case.
  • Solicitors' firms are willing to spend thousands of pounds on "introduction fees" to secure personal injury cases, leaving less for the victim's compensation claim.
  • This practice can lead to a higher cost for victims, as the lawyers may not be motivated to negotiate the best possible settlement for their clients.
  • The Solicitors Regulation Authority and the insurance sector should insist on transparency to give victims, such as Graham Smith, the opportunity to decide whether their chances are better with the highest bidder or whether to seek legal advice elsewhere.

Statistics:

  • According to the Financial Mail investigation, many of the largest motor insurers in the UK are involved in the practice of auctioning off personal injury cases.
  • The solicitors' firms bidding for these cases are willing to spend up to £1,500 on "introduction fees".
  • The investigation found that 27-year-old Graham Smith, who lost a leg in a motorbike smash, saw no progress in his case for more than four months before being approached by a solicitor who had purchased his case for £1,200.

Sources:

  • Financial Mail, "Insurers Auction Personal Injury Cases, Leaving Victims Vulnerable to Exploitation"
  • Investigation by Financial Mail reveals on Page 3, "The mis-selling of endowment policies, pensions, split capital trusts, and precipice bonds might have been considered a sufficient assault on the investing public, but..."