Personal Injury Claims Management Companies Down 45% Since 2011

The Ministry of Justice has said that it has removed the licenses of 200 rogue claims management companies in the past 12 months, and that more rigorous processes mean that the total number of personal injury companies is down from 2,553 at the end of 2011 to 1,400 in January 2014. The total of number claims management companies, including personal injury firms, is down from 3,367 to 2,254. The majority of CMCs are personal injury firms.

The Ministry of Justice has introduced a range of changes and improvements to the licensing and accreditation, as well as regulation, that claims management companies, must undergo. The industry had come under considerable scrutiny because of alleged poor practice, especially since the Payment Protection Insurance mis-selling scandal. One of the practices that is being clamped down on is the automated calling of people that are not affected by the claims.

In the past 12 months, the Ministry of Justice has removed the licenses of more than 200 rogue firms. Justice Minister Shailesh Vara said that “we are taking strong action to rein in the rogue firms operating in this sector.”

The closure of rogue firms is only a portion of the work that the MoJ is undertaking. They have also finished a consultation period on the introduction of more rigorous conduct rules for claims management firms. They are currently analysing the responses, and this is expected to lead to further amendments and additional requirements.

In November, the MoJ announced that it would be given the power to fine firms that broke their rules and that have broken their licensing agreement. Currently, the MoJ is concentrating on those firms that charge clients incorrectly, but they are expected to expand their remit to include companies that manufacture claims, or that use data requests to file spurious complaints.

Every individual should have the right to submit claims for personal injuries when they have been injured, or suffered illness, through an accident or neglect that was not their fault. However, it is important that the government and the Ministry of Justice, in particular, closely monitor the situation, and the fact that rogue companies have been shut down means that consumers are able to enjoy a better quality of service.

General PI NewsFeb 25th, 20140 comments