April 1st 2013 saw the biggest shake up in the personal injury compensation claiming world ever. Some of changes affect clients directly, and we are not too happy with them, but others we are more than happy with.
The banning of referral fees was one of the highlights of the reforms we think! No longer can claims be sold for profit by claims management companies (CMC’s), insurers, garages, and all sorts of companies. People would search the net, see a company advertising No Win, No Fee services, likely not realise it’s not a law firm, and instruct them to deal with the case. They would then pass the claim to a lawyer for up to £1,000 – money that comes straight from the budget for running your claim; leading to poor levels of service and under settled claims.
So what are the new changes? Well according to updates from the government, the rules which came into force on the 8th of July mean that:
- CMCs must agree contracts in writing with their clients and this must be done before any fees can be taken.
- CMCs must refer to their status as being regulated by the Claims Management Regulator, and not the MoJ – in the past firms have misrepresented their status as a government endorsement.
- CMCs must inform clients if they are suspended or if restrictions are imposed on their business. This must be done within 14 days of the enforcement action being taken.
Referenced from www.gov.uk/government/news/new-rules-to-protect-customers-from-rogue-claims-firms.
The rouge claims firms that would push people in to verbal contracts, or even just sell the claim to a lawyer under the impression that they have agreed to use their services, will no longer be able to operate in this underhanded way. At the same time, it should be clearer which companies are real lawyers like us, and which are just the middlemen passing you over to a paying law firm.
The report confirms that Head of Claims Management Regulation, Kevin Rousell, has said:
“We are making sure that people have time to think through any arrangement and are happy and clear about exactly what they are taking on before they agree anything, particularly before parting with any money.These new rules will root out poor practice and ensure consumers are better protected by making contract terms much clearer.”
This is a huge leap forward in managing the out of control claims management companies, many of which are fairly big names you see TV adverts on the box for all the time. The report goes on to confirm that there are around a staggering 1,700 claims management companies who are licensed for personal injury claims in the UK alone – that’s 1,700 middlemen passing claims on to paying law firms.
Instruct a Law Firm Directly
Our advice has always been the same – why go to a middleman when you can go directly to a law firm and get real legal advice and speak to the very same people who will be representing you for a claim? How do you know that the law firm you are passed to through an accident management company is even any good? You don’t! Would you let someone choose and buy a house with your money without even seeing it? Or what about a car?
With the banning of referral fees, a lot of claims companies are now deducting money from your compensation as well as the law firm deducting money from your payout too. You’re being hit twice for being passed to a law firm. It’s crazy…
So not only can you come to us directly, but we may also be able to offer you a 100% compensation agreement. You keep every penny. So give us a call on 0800 634 75 75 today.
For info about the companies that have had recent enforcement action against them, see here: www.claimsregulation.gov.uk/enforcement
