The rise and fall – and rise – of claims management companies

This week, the news is full of stories about how claims management companies have been still causing trouble, even after almost being stamped out by new laws.

The good news is that claims management companies are nowhere near the personal injury claims juggernaut they were years ago. In fact, when you look at the number of CMCs out there, there are 45 per cent fewer of these companies out there than there were in December of 2011, when the Ministry of Justice threw the book at them. There’s only 1400 of these firms in operation as of last month, and they’re not nearly as aggressive and obnoxious when it comes to pursuing unsolicited business by bothering people who might be interested in bringing accident claims after an injury.

CMCs were absolutely notorious for bringing as many claims as they possibly could in order to profit off of legal fees. Companies would more or less throw everything they could at the wall in order to see what stuck, then move on to the next batch of people who might have valid claims by buying customer information from organisations like insurance companies, who would supply these CMCs with the names and phone numbers of people who had been involved in road traffic accidents.

In other words, the majority of this type of activity is a thing of the past thanks to new regulations that curbed that sort of devilish behaviour. However, there are still plenty of CMCs out there causing mischief, and one insurer recently had to warn countless customers that claims management companies may come knocking once more.

Car insurance firm Aviva recently had to swallow its pride and notify tens of thousands of drivers that two former employees took countless accident records and sold them on to claims management companies for their own personal gain. Many of these customers have already inundated with unsolicited phone calls as a result, prompting Aviva to issue abject apologies and to alert the authorities to combat the fraud. It’s infuriating to say the least, but also ironic if you ask me; a company that used to sell that sort of information to CMCs directly is now upset that its employees were doing it behind its back! I suppose it’s a bit of poetic justice.

ABI launches new code whilst Biba follows in its footsteps

Industry news roundup: week ended 17 Feb 2014:

This week, both the Association of British Insurers and the British Insurance Brokers Association have committed to new codes of conduct to kerb criticism.

Apparently ABI members have had it up to here with accusations of poor behaviour when it comes down to things like road traffic accident claims and personal injury compensation, since they’ve gone ahead and published a brand new Code of Conduct. Now, any insurance customers of an ABI member that signed on to the new code can look forward to newer levels of transparency when it comes to personal injury lawyers that work for a particular insurer and a commitment to not not receiving any pressure to make a claim if the customer would rather not.

Some of the largest and most influential insurers operating in the UK have already signed on, such as LV, Allianz, Co-operative, Admiral, and Axa. It’s nice to see so many insurers finally caving to the intense societal pressure to be decent to their customers instead of right bastards, though I do have some misgivings about how strictly this new code will be enforced! I suppose I’m just a bit of a sceptic. 

Meanwhile, Biba has taken a step from the ABI’s playbook and announced its own code of practice as well. The new code is geared towards the same things that the ABI one is – protecting the interests of customers who may need to make personal injury claims – though the wording of the code of practice is much different since the industry body is composed of brokers and not insurers directly.

Again, I’m right impressed that Biba has gone along and followed the ABI’s lead. Then again it’s not surprising in that most insurance broking firms are in that strange Limbo state of being both needed yet distrusted by policyholders and insurers alike, since they act as intermediaries for a profit. Personally I wouldn’t want to work as a broker, considering you’ve got to balance the needs of your customer against the needs of the insurer if you want to be successful. That just sounds like much too much pressure for me to be under at any given time!

Older gents on both sides of the accident claims aisle

Industry news roundup: week ended 10 Feb 2014:

Older gents seem to be in the news lately when it comes to persona injury claims, and not on just one side but both!

Some days it just doesn’t pay to get out of bed. For instance, a man from Cofton Hackett has been slapped with a personal injury compensation bill after he picked a fight with a cyclist after an instance of road rage. If there’s any story that will teach you to keep your cool, it’s Bruce Wilson’s: he nearly hit a cyclist as he was getting into the passenger side, and both gentlemen decided to have a bit of a verbal battle.

Unfortunately it didn’t end there. The cyclist decided to have a bit of a temper tantrum, and Mr Wilson, well into his 60s, decided to get back out and give the cyclist a good punch. Then, to punctuate his point, the man picked up the custom racing bike – valued at some £5,000 – and tossed it, causing some serious damage.

In the end, the damage totaled £2,600, and despite that the cyclist might have contributed to the tussle with his own behaviour, the older Mr Wilson accepted full responsibility. Well at least he seems to be a bit more calm now, though I’ll wager he’s kicking himself for letting his emotions get the best of him like that.

Of course, not every personal injury compensation in the news is as amusing, or as minor. In fact, this week a former Ford employee has prevailed on his £33,000 accident claim after the one-time toolmaker ended up with a case of what’s called ‘occupational asthma.’ In other words, the 60 year old man toiled away at the Dagenham-based plant for heaven knows how many years, breathing in all those steel and cast iron particulates and ruining his lungs.

There was never an adequate filtration system set in place in the plant, according to the man’s personal injury solicitors, and nor did his employers provide him any sort of protection such as a simple breath mask or dust filter. Poor bastard. Can you imagine, putting in decades of work at a company like that only to not be cared for? Well, now at least he’s £33,000 richer – maybe now he can breathe a bit easier!

Ambulance chasers a problem? Not as much as the Government

Industry news roundup: week ended 3 Feb 2014:

Everyone likes to say that ambulance chasing personal injury lawyers are a real problem nowadays – but let’s be honest, the Government isn’t exactly innocent.

Not that people haven’t been working overtime to blame personal injury solicitors. In fact, new research was revealed this week that medical negligence cases in particular are notorious for attracting disreputable legal professionals that try to milk the NHS for as much cash as they possibly can. Some estimates say that legal bills of almost £200 million every year are generated by these specific types of personal injury claims.

Now I’m not going to say that there aren’t some right bastards out there – unfortunately there are, and they often do try to generate as much income for themselves as they can regardless of the merits of the case they’re trying. At the same time, these disreputable lawyers are an absolute minority and shouldn’t be used to hoist the entire legal industry on its own petard – we simply can’t allow a few bad apples to ruin the whole bunch, now can we?

Speaking of bad apples, the Government has decided to no longer hold mesothelioma personal injury claims exempt from the Legal Aid act, despite the fact that mesothelioma has some very important distinctions that hold mesothelioma claims apart from your run of the mill slip and trips. Despite the fact that it takes decades for the condition to develop – and that it’s exclusively caused by exposure to asbestos – the cries of Opposition MPs that wanted to preserve the exemptions fell on deaf ears.

Now if you ask me there’s very little about a mesothelioma claim that can be politicised, so I really don’t understand the Government’s stance on this issue. I suspect it comes out of large firms pressurising the Government to make things easier on them, considering how big business has the Government in its pocket more or less exclusively. Stripping mesothelioma claims of their non-exempt status means fewer claims being brought in general and smaller compensation awards as well, which benefits no one but the companies that have to pay out on these claims. In other words, the mesothelioma victim gets to suffer without recompense whilst large companies and insurance firms get off without even a slap on the wrist. How is this fair?