People who have suffered an injury and want to claim compensation are being advised that they have nothing to gain by using middle men after referral fees for putting them in touch with lawyers were banned.
A respected Midland solicitor has warned potential claimants to think carefully before responding to adverts from so-called “claims management” companies, who are no longer able to charge up to £700 a time for passing their cases on to lawyers.
The call has come from Chris Stanley, a personal injury specialist and consultant at Midland law firm mfg Solicitors. Mr Stanley has said that law firms used by claims management companies can be based anywhere in the country and that claimants could be missing out on vital personal contact with local lawyers if they use them.
He said that new rules, introduced in April by Justice Secretary Chris Grayling to clamp down on Britain’s compensation culture, have not been well publicised and that many people would not be aware of the changes.
Mr Stanley said: “Many of the adverts on television for personal injury lawyers are actually claims management companies who used to be able to make money from referral fees. Now they have been banned from doing so they try more than ever to sell insurance or advertise other products when people call to enquire about claiming compensation.
“Some of these adverts are basically just middle men who used to sell on your details. These claims management companies don’t actually add anything to the process. It’s better for the client to go straight to a solicitor because they don’t have to listen while the middle man tries to sell them insurance or other services and they don’t have to keep outlining their story to different people.
“The law firms the companies refer claimants to can be anywhere in the country so the client would not even get the face-to-face contact they would receive by visiting a local solicitor.”
Referral fees were a big industry before the changes and they were worth around £3 billion per year as garages, insurance companies and claims management companies all charged fees to pass on details of accidents.
Other changes from the Justice Secretary include a cap on fees charged through “no win no fee” deals of 25 per cent of the damages.
mfg Solicitors advise and assist clients on issues including moving home, family, domestic partnerships, wills and probate, personal taxation and accident and injury compensation.