Claims management companies' practices set to improve


Individuals who have suffered a wrongdoing are often pursued, through text message and advertisement, by claims management companies. They often offer sweet-sounding arrangements for pursuing a claim for damages on behalf of the injured party, in exchange of a lucrative fee.

Consumers exposed to claims management companies' poor practices are at the moment not entitled to compensation in case they are unhappy with how they were treated, or with the service provided. The Government is now introducing new plans, which they hope will rectify this situation in the coming year. 

Compensation for unhappy consumers

Claims management companies will now need to ensure that their clients are happy with their service, as they may otherwise be liable to pay compensation of up to £30,000. At the moment, unhappy consumers can file a complaint with the claims management regulation unit (CMRU). However, the CMRU does not have the right to award compensation to unsatisfied clients.

As from 2013, the path for consumers wishing to file a complaint about a claims management firm will be able to do so with the legal ombudsman.

The Ministry Of Justice has said that it envisions that the coming changes will allow the CMRU to: "refocus its resources on working with the claims management industry to improve standards and take wider action against claims management companies who consistently breach the rules".

Why is the system changing?

There have recently been scandals involving financial services claims firms, such as their pursuance of individuals who had been mis-sold PPI insurance and their dubious use of no-win, no-fee agreements. There have also been questions of practices in the spheres of personal injury and industrial injuries, amongst others.

There have been many complaints from both individuals and organisations, such as banks, claiming the practices of claims management firms are ineffective and time consuming. Hopefully, the new compensation and complaint route will result in a more satisfied consumer.

If you'd like any information regarding PPI claims we can put you in touch with an expert solicitor in your area, free of charge. Call us now on 0800 1777 162.

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