fake ebay pageJohn Spencer Solicitors (not a real eBay page)

Ambulance chasers have long had a poor reputation for cashing in on the needy or the greedy - encouraging them to find someone to blame for everything, and drag them through the courts in the hope of a payoff.

However, one personal injury lawyer has warned that these unscrupulous operators are not acting alone - they are aided and abetted by insurers.

Know your rights


Referral

The set up is highly peculiar. John Spencer, of John Spencer Solicitors, said he has personal experience of how these things work. The approach most people are aware of is when insurers sell details of drivers involved in accidents to solicitors - in return for what is known as a 'referral fee'.

Know your rights



The weird thing about this is that the solicitor would then take the other person involved in the accident to court, which they would usually claim through their insurance. There is every chance, therefore, that the firm selling the details of the case would be the firm paying out the compensation in the end.

We will pay

The person who ends up paying for this in the end - of course - is the customer. The payout for the court process and compensation can be astronomical. By passing the details onto lawyers, the insurers are actually ensuring more of them go to court, and that their payouts are greater. It costs them a fortune, and we end up paying for it through higher insurance premiums.

Insurers, however, argue that if they didn't do this, someone else would - so at least they can make some money from the whole sordid process.

Auctions

However, according to Spencer things have become even more macabre, with the rise of referral fee auctions for bundles of up to 2,000 cases. They are priced according to how severe the injuries are of the people involved, and then flogged to the law firm willing to pay the highest price for them.

He argues that as a result, individuals may not end up with the most appropriate firm, and may be pressed to settle for a fixed sum - even before a medical examination is carried out. He has also called into question the morality of such actions.

In protest, he has said up a mock eBay page, running a fake auction supposedly for a victim with a spinal injury (pictured).

Banned

The good news is that referral fees as a whole will be banned from next April. Spencer is arguing that this is a long way off, and that we need to act now to clean up the business. He also points out that unless this cavalier attitude is tackled at its roots, when the ban comes into place, insurers and lawyers will just find another way around the new rules in order to perpetuate this deeply rotten system.

There is already a handy get-out clause to exploit in the new rules, saying that a fee can be paid as long as they can demonstrate that it was "consideration for the provision of services or for another reason".

On its website, it is calling on individuals to email their insurer (the details are listed) to ask difficult questions like, 'do you participate in auctions?' And 'will you stop taking referral fees now?'

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