Jack Straw raps Motor Insurance companies in claims data exchange practices.

[MARTIN3030]

He says the practice of Insurance Companies passing data to Claims Management Companies encouraging whiplash claims is costing motorists higher premiums.

Also calls for whiplash victims to prove injury.

 

http://www.insuranceage.co.uk/insura...s-referral-fee

[Mossycat]

http://www.bloomberg.com/news/2011-06-08/car-premiums-rise-40-as-parasitic-claims-fleece-u-k-grandmas.html

Worth a read

[MARTIN3030]

Yes.

It is a culture that has not really been discouraged by the MOJ though-who are happy to take licensing fees from CMCs.

 

The recent announced shake up withdrawing legal aid for many,and calling for greater use of no win no fee teams-will see referral fees become more evident too.

I cant see how they can ban the practice-since as long as businesses are prepared to pay-there will be takers-it will just be driven underground.

[T.C.]

Yes.

It is a culture that has not really been discouraged by the MOJ though-who are happy to take licensing fees from CMCs.

 

The recent announced shake up withdrawing legal aid for many,and calling for greater use of no win no fee teams-will see referral fees become more evident too.

I cant see how they can ban the practice-since as long as businesses are prepared to pay-there will be takers-it will just be driven underground.

 

Legal aid has not been available for personal injury claims since 2001 when it was replaced by the Conditional Fee Agreement (no win no fee) and is currently only available for medical negligence claims, which is means tested but again as you mention is due to be withdrawn, and med neg claims will also be delat with under a CFA.

 

The problem with claims management firms is the fact that many are fraudulent and see it as a way to make a quick buck, and really have no disregard for the licencing requirements issued by the MoJ, but in any case they don't care because as soon as they are caught out they simply shut down and then start up again under a different name.

 

The insurers are happy to provide these management firms with yours and my details, the recovery garages are now starting to do it and even the Police are becoming guilty, and then you get the CMC's randomly sending out spam messages.

 

What I learnt today whilst in the office is that these CMC's are sending out the text messages at the cost of a few pence. If they get a respone, they get paid between £5 and £10, even if it is simply to tell them to go away, and if someone actually says they want to claim, then they get paid a minimum of £500, many are up around the £900 per referral.

 

The downside is that we as law firms (and I appreciate that there are some very dishonest or unscrouplous law firms) are being tarred with the same brush, when in fact it is the claims management firms causing the majority of the problem particularly with the cash for crash scams, phantom injuries and phantom and staged crashes many of which I have had to deal with over the years.

 

A bona fide law firm has to carry out a risk assessment before they can get funded under a CFA and obtain after the event insurance, and so if something doesn't seem quite right it probably isn't and so should bin it at the earliest opportunity.

 

Anyone remember The Accident Group (TAG) and Claims Direct of a few years ago?

 

Well this is just another [problem] organised by similar individuals trying to make a fast buck and undermine those who offer victims proper and regulated legal representation.