Working with Claims Management Companies

In 2007 a new statutory regime was brought into effect by the Labour government. This was the Compensation (Claims Management Services) Regulations 2006. These Regulations meant that CMCs had no alternative but to be authorized by the Ministry of Justice in order to continue working in the personal injury market.

Before 2007, despite a half-hearted attempt by CMCs to create the appearance of being capable of self-regulation, the reality was that the CMC sector was awash with suspect and exploitative businesses. The new Regulatory regime was supposed to change all that. Sadly, it has done nothing of the sort. Indeed, there is a strong argument to the effect that the MoJ authorisation process has done nothing more than add a badge of respectability to what is a fundamentally flawed business sector.

Despite our publicized concerns, we have worked with CMCs ever since we set up as a new business in January 2006. In amongst the nest of vipers, there are legitimate businesses that aim to provide genuine services to their clients. It is these businesses that we work with, and would like to continue to work with.

We have trouble with the CMCs whose business model consists of little more than selling a lead! This does not just refer to those businesses who constantly send emails marketing their ability to refer leads. We also mean both small CMCs who are buying in claims from others (whether those others are MoJ authorized or not), and large TV advertising CMCs who have bought the false appearance of offering a genuine service simply by sourcing sufficient capital to buy slots on commercial TV.

The CMCs that offer a genuine service retain their own client base. This has two key consequences: the clients usually cooperate in pursuing the claim and they are unlikely to be perpetrators of fraudulent claims (whether staged or non-existent).

There is a place in the legal services sector for CMCs. However, in our view, the place is not where most CMCs conduct business now!

Legal Solutions Partnership

Making the law work for you.