Claims Management Companies Providing Poor Service to Face Huge Fines

Posted: July 1, 2014

Posted in: Personal Injury 

Claims management companies which provide poor service by plaguing customers with nuisance phone calls, making unsubstantiated claims and employing misleading and unlawful marketing tactics could now be punished with heavy fines.

The proposal by Justice Minister Lord Faulks outlines that the biggest firms could face fines up to 20% of their annual turnover. The fines which would commence later this year will be based on the annual turnover of the company involved and the severity and nature of the conduct.

This measure is a follow up to steps already implemented by government to regulate the conduct of Claims Management Companies (CMCs), including a ban on taking fees prior to a contract being signed with the customer and having referral fees in personal injury cases. These measures have already resulted in a dramatic drop in the number of CMCs registered to handle personal injury cases from in the region of 2,300 at the beginning of 2013 to almost half of this number at the end of May 2014.

Head of the Ministry of Justice claims management regulation unit, Kevin Rousell has commented: “We already take tough action against companies which break the rules, but now these fines will help to drive malpractice out of the industry and improve the reputation for those who do follow the correct procedures.“

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