With so much press about Claims Companies, oftentimes more bad than good, I thought it might be an idea to look at the reason why and how they exist.
Until the 1990’s if you had an accident and suffered an injury you could apply for Legal Aid to fund the costs of making a claim for your injury.
Your solicitor would complete the necessary application forms and if you were accepted, your solicitor would be paid by the Legal Aid Board as the claim progressed. This would allow him or her to obtain payment of their costs and expenses such as medical evidence, police accident reports and court fees.
When the Government decided to abolish Legal Aid for personal injury cases in 2000 a new system was needed to fund these claims. Solicitors were unsure how the system could work without funding for their cases. In reality, without Legal Aid available either the injured victim or the solicitor would have to pay the running costs of a claim.
At this point Claims Companies realised that they could bridge the gap between injured accident victims and solicitors, much as the Legal Aid Board had done prior to 2000. Claims Companies knew that whilst most solicitors are incredibly good at all of the legal aspects of their role, marketing and advertising to attract new clients was not their strength. They also understood that clients were still wary of approaching solicitors directly for fear of immediately being charged for the solicitor’s time.
Claims Companies started advertising and they made it very easy for injured victims to contact them, providing longer opening hours than solicitors, interactive websites and free phone telephone numbers. Soon Claims Companies were regularly bridging the gap between injured victim and specialist solicitor.
Many solicitors liked the relationship. The Claims Company would receive a fee for each new client they introduced to the solicitor and the solicitor could predict with some certainty the number of new clients he was going to help each month. Any business craves this kind of consistency and for the solicitors the relationship took away much uncertainty that any business has when it tries to attract new clients.
However, major problems arose when some Claims Companies decided to try and take payment from every source that they came into contact with, including the innocent accident victim. Rightly so, the press picked up on this and this has largely stopped now. When I established 1stClaims it was important to me with my background as a Personal Injury Solicitor that 1stClaims never charged the victim. We also insist, wherever possible, that the solicitor does not charge the victim either. However, there are some cases, such as Medical Negligence Claims, where the law is much more complicated, that sometimes investigation charges will have to be made. We insist that all initial telephone discussions with the victim are free, and that they will be made aware of any costs that will be incurred and decide whether they want to proceed or not. We do not want any of our clients to have nasty surprises!
This is largely the reason Claims Companies now exist, to bridge the gap between the victim and the solicitor. By and large, the system seems to work for all parties.
Tags: Claims Companies
