Clampdown on rogue personal injury claims firms

In the past year more than 200 licences have been removed from rogue personal injury claims firms which have flouted the rules, as the Government continues to crack down on companies which abuse the system. Nick Flower, a partner in local law firm Spire Solicitors said, “The new rules to regulate claims management companies have been a great help in protecting clients from rogue operators”.

Action against claims management companies which have failed to comply with industry standards has been stepped up over the last 12 months, as part of wider action to clamp down on bad practice, including bombarding the public with misleading advertisements and cold calling.

New statistics show the Claims Management Regulation Unit at the Ministry of Justice revoked 200 licenses last year, taking the total of closed firms to more than 1,100 since the start of regulation in 2007. Government action has also seen the total number of claims management companies drop by more than 1,000 since a peak of 3,367 in 2011 to 2,254 in November 2013.

Tougher rules to further protect customers taking on the services of claims management companies also include bringing an end to all verbal contract arrangements between consumers and claims management companies agreeing written contracts before any fee can be taken, banning firms which offer cash or gifts for profitable claims and an order that firms must inform clients within 14 days if enforcement action has been taken against them.

Nick Flower, comments “Claims management companies are often an unnecessary extra layer of administration in a case and can lead to an increase in costs. A client’s most efficient and cost effective route when making a claim is to go direct to their local solicitor for support”.

If you would like assistance in relation to a personal injury matter, call Nick Flower at Spire Solicitors on 01603 677077 for further information.

PARTNER NOTES

Further information can be found at
http://www.justice.gov.uk/claims-regulation

Web site content note:

This is not legal advice; it is intended to provide information of general interest about current legal issues.