Massive car insurer Admiral has revealed that it sells details of injured clients to solicitors for around £24.5 million pounds a year which equates at around £7 for every one of the 3.5 vehicles it insurers.

This is dramatic evidence of the hidden scandal perpetrated by insurers who on the one hand complain of spiralling legal costs of injury claims and then in a back door operation they make millions by this evil trade. This stunning news was highlighted in an article in the Law Gazette published on 6th September 2012 as a way of highlighting the forthcoming ban on buying and selling personal injury cases that comes into effect on the 1st of April next year.

….claims companies, garages, insurers and even unions sell cases to solicitors for fees around £600-900

Jack Straw highlighted the extent of the personal injury trade in Parliament last term and this led to the passing of the Legal Aid Punishment and Sentencing of Offenders Act (LAPSO) which includes a provision banning referral fees. Anecdotal evidence was produced to show that claims companies, garages, insurers and even unions sell cases to solicitors for fees around £600-900. This was thought to increase the amount of both claims and their costs that are passed on to consumers by way of increased premiums. Imagine the surprise when it was found that the biggest culprits were the ones who were pressing for the ban, the insurers, as shown by these recently disclosed figures.

So now Admiral and the other insurers face losing this income but are already making plans to hide their profiteering by setting up solicitors businesses to keep the profits. It remains to be seen if the public will want a solicitor who has bigger duties to shareholders as opposed to their clients. We’ll find out in April whether the law has achieved its purpose.