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An investigation carried out by former Justice Secretary, Jack Straw, has discovered that motor insurance companies have been selling on the personal details of their customers to claims-management companies and “ambulance chasing” lawyers. 

Mr Straw’s investigation has led to a call to ban into insurance claims that led to a proposal to ban referral fees.

It also revealed that the insurers’ common practice of imparting personal information of their clients to claims companies has led to a significant growth in personal injury claims, presently amounting to £14 billion, despite the overall decline in road traffic accidents.

Although an addition to the revenues of insurance companies, referral fees are ultimately an indirect source of increased costs arising from personal injury claims settlements. Furthermore, not only is this the primary cause of the increase in household premiums, but in essence it is a violation of the Data Protection Act.

Many of the claims involved are for whiplash cases, which controversial in their nature due to the lack of a tangible evidence of the injury.  The cost to the insurance industry of claims for whiplash is £2 billion, yet the cost to the NHS of treating whiplash injuries is just £8 million.

Frenkels Forensics are able to assist with the assessment of loss of earnings in personal injury claims and are experienced in the investigation of fraud arising from false claims.  For more information please contact John Frenkel or Vitek Frenkel on 020 8457 2929.