This contribution was made by Jim Loxley, a Director at accident compensation experts, My Compensation.
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In the past 15 years or so in the UK, many accident compensation claimants have used claims specialists such as My Compensation to be put in touch with expert solicitors who you are particularly experienced in a given area to help with their particular case. There are lots of types of accidents and personal injuries and this process helps people who have been in an accident to deal with an expert to increase chances of a successful compensation claim. It’s a good system which sees a lot of legal professionals receiving properly vetted accident claims which are there to start the process.
However, the fees paid for accident victim details are thought to be having a negative impact on the UK’s economy. For this reason, a lot of bad press been seen over claims management companies who work in this way to help personal injury victims after accidents or crashes. My Compensation is legitimate firm operating well within the given guidelines of the Ministry of Justice. However, some claims companies are bending a few rules and these are the ones that seem to be causing the problem. These are also the ones in the press and sending those annoying unsolicited text messages, of which I am also a sufferer.
Referral Fees from Accidents in the Insurance Companies
A fact which gets less press is the following. The insurance companies are double-dipping in accident compensation referral fees too. Many mainstream media publications have been making bogeyman scapegoats out of the accident compensation companies but it then transpired that fully blown PLC companies such as Admiral insurance were also making money on referral fees, despite the fact that this is not necessarily their main practice and they’ve already made money on the premium for the car insurance. They’re just tagging on to take some business from the claims market.
An investigation had to be launched by the government’s Competition Commission into the insurance companies as the evidence suggested that it was causing the problems. They didn’t make such great media hype in terms of the scapegoats as a few rule-circumventing compensation claims firms but the truth is that the insurance companies were causing a lot of issues.
Recent News in Accident Compensation Referrals
News recently released recently by the Law Society Gazette revealed that Admiral Insurance had published figures stating what it was making for referral fees for accident compensation claimants. The figures stated how the insurance giant raked in £7 in referral fees for personal injury accidents for every vehicle which the company covers. In and of itself, referral fees of £7 pounds don’t seem like much. However, taking into consideration the fact that Admiral insures some 3.5 million cars in the United Kingdom, this means a £24.5 million per year income from referral fees.
The proposed referral fees bans for accident compensation cases, which is due to come into place in April of 2013, mean that insurance companies are likely to see a drop in their income, a fact which may not necessarily go towards helping lower the cost of insurance premiums for car accidents as is everyone’s hope at present. Admiral declined to comment on any potential plans for it to make an application to become an alternative business structure (ABS) in order to earn money through fees for accidents and personal injury claim cases.
Jim Loxley is contactable via the homepage of My Compensation. The source for the latter part of the article was the Law Gazette.
