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| The Claims Management Company - C4F News Archive |
Certainly, claims firms have been compared with the Devil Himself on many occasions - and to a point the analogy rings true. The Devil does not commit "sins" himself, he simply suggests improper actions to others. The Devil's evil therefore does not lie in his own actions but more in his ethics and lack of due care to the people, and by default the society, he influences. This encourages a closer look at the actual "nature" of the beast before continuing:
Who is running these companies? The Accident Group, now legendary for firing its 2,500 staff via text-message, were publicly winning six figure sums for their clients and donating millions to the NSPCC. Despite this sympathetic exterior Mark Langford, the chairman and founder of the group, was spotted fleeing to his Spanish mansion hours before his company was declared bankrupt.
His firm purchased no win, no fee legal protection insurance policies from First National for £80 and sold them to clients for £900-£2,000. This insurance was considered a legal expense and was therefore paid for as part of the compensation payout. In the aftermath one executive was quoted as saying - "We employed some right toe-rags ... they were signing up friends, family, people down the pub, even just making up names. Greed took over." This led to the bus company Arriva hiring Ravenstone UK, a fraud investigation service, to investigate the claims being made by the group. Ravenstone stated: "We investigated some 400 of these cases. Only 20% we could prove were genuine. We found scores that were made up." This insurance-salesman approach to the personal injury claims market has been copied by hundreds of claims management firms still operating in the UK, but what set The Accident Group apart from the rest was their staff:
Described as "harder to get rid of than a sexually transmitted disease", the claims chasers would loiter around Accident & Emergency departments, stop people in the street and cold call on homes all with the promise of thousands of pounds in compensation if they'd had and accident. But what finally destroyed the company was the directors themselves who, on top of everything, paid themselves £7.6million of the £9.8million profit made in their final year instead of putting that money back into managing cases.
This is an extreme example but is almost a mirror image of the Claims Direct saga only a year or so prior. How many "Claims Direct's" and "The Accident Group's" do the public have to endure before something is done?
The government is well aware of the issues, with Don Touhig of the Welsh miners compensation review board stating: "I would like to re-emphasise that the Government is paying all the solicitors' legal costs and claimants should on no account be asked to pay any more money on top of that." This was in regards to claims management firms skimming large sums of money off the top of Welsh miner's compensation.
More recently the courts have taken matters into their own hands passing the names of 24 people in the Merseyside area to the police for investigation for attempting to make fraudulent claims. Knowsley council in Merseyside were appalled at the lack of regulations imposed on claims management firms with personal injury claims costing them over £3million in 2003 with 40% of that cost allegedly going on legal fees alone. Claims have risen in their jurisdiction from 350 a year in the 1990's to a whopping 1,500 in 2002 during the height of the Claims Direct and Accident Group frenzy. They blame the rise on blatant soliciting television advertisements, door-to-door canvassers and even revealed that a claims firm in Wirral had written to GPs offering them cash for referrals.
The tax-payer is bearing the brunt of the majority of these with over £5billion in claims currently being made against the NHS alone. Insurance prices have also sky-rocketed placing a burden of around £400 per year on every household in the UK for personal injury claims being made. Norwich Union's chief executive Patrick Snowball stated "the greed of third parties to encourage people to claim" has not just increased the insurance costs of the average person but has impacted on society as a whole. He quoted that 60% of small businesses feel that the current compensation culture is interfering with the day-to-day running of their business. He went further to comment: " The risks that people are prepared to take in life are different. For example, teachers are less prepared to take children on school trips.". This statement is now validated by the widespread policy of schools to limit, and even suspend, school trips which require insurance.
Certainly, from this evidence we can conclude that claims management firms are indeed the "Root of all Evil" in that they encourage us to do things that are not in the best interests of our ourselves, our society or our culture. But the very notion that we as a community are so susceptible to the media is even more of a concern. These days, even if the heavy-handed advertising was banned, the idea of claiming is now so ingrained into the nation that it would probably have no affect on the current rate of claims. Individuals need to take responsibility for their own actions and the judgemental finger of the public needs to be turned on itself before the situation will improve. It is not the claims management firms the schools fear when they cancel school trips, its the parents. - Written 24/09/04*
Other Archived Articles:
> The Meaning of the Word Accident?
> Claims: The Rising Cost to the UK?
> Compensation Claims Pros & Cons
> Fraudulent Claims in the UK
> Is there a Huge Rise in the Number of Claims?
> NHS Compensation Claims
*Disclaimer: This article has been marked as "archived" because, although most of the information may still be relevant, the article was written more than two years ago which may mean that some information may be outdated. Although this site is updated as often as possible the information provided may not accurately reflect the current laws, procedures and/or facilities available to you. To ensure that you get the most up to date information make sure you consult an actual solicitor before pursuing any action. The articles on this site are for informational purposes only and are not intended to advise any particular action or inaction. Please read our terms of use for more information.
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