Hypocrisy of Insurance Companies

I blogged recently about my concerns that the purely financial interests of the insurance industry are given far too much weight by their friends in Government.

Here is a classic example of insurer’s hypocrisy. On the one hand they say (they would wouldn’t they) that legal costs are too high. On the other hand many of those same insurers, through their legal expenses insurance arms, sell claims to solicitors, charging quite incredible fees for the referral. I have heard stories of one very well known Legal Expenses Insurer charging around £800 for each referral. It is beyond me how any solicitor could afford to pay such a sum but there always seems to be someone who will. The problem, of course, is that the huge referral fee eats so much into the solicitor’s costs that there is little left to run the case, so the solicitor may have to cut corners and both the quality of the representation and the outcome for the Claimant suffer. Is it any coincidence that compensation claims against negligent solicitors are increasing? I think not.

How can the insurers criticise legal costs on the one hand, whilst on the other hand they have an interest in selling cases to solicitors for hundreds of pounds a time. If the Government were to ban the payment of such referral fees then that would be a far better point from which to then consider changes to a successful Claimant’s costs.

For more information on Personal Injury Claims, contact Neille Ryan, Partner specialising in Industrial Disease and Accident  Compensation Claims.