Should I use a Claims Management Company?

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Considering using a Claims Management Company for Your Personal Injury Claim?

First of all what exactly is a Claims Management Company?

Also, why is it important you know the difference between asking a Claims Management Company or a Solicitor to deal with Your Compensation Claim?

In this guide we’ll discuss the function of Compensation Claims Management Companies and why choosing a specialist injury solicitor instead might well be the smart option.


What are Claims Management Companies and Why do they Exist?

  • Claims management companies (CMCs) are businesses that help people claim compensation when things have gone wrong.
  • In the context of personal injury claims they can be referred to as accident management companies but CMCs can also get involved with financial mis selling and payment protection claims.
  • They operate various services to facilitate the claims process.
  • In very general terms CMC’s act as a middle man between you and a solicitor or a legal practice.
  • The way they generally generate their income in the personal injury market, is to levy a marketing charge to the solicitors who are on their approved panel in return for providing the solicitors with personal injury claim leads.
  • It’s also worth noting that under the Solicitors professional conduct rules the solicitor is under a duty to disclose to the client the marketing cost  payments made by the solicitor to the CMC when dealing with compensation accident claims.

 


What are Claim Management Companies Really Good at?

In a word – Marketing.

Yes CMCs are generally fantastic at marketing their own companies and they do a great job of collecting personal injury leads but they are not legal injury experts.

In fact once they receive enquiries from their customers then typically they just contact their panel lawyer to transfer the leads on to them.

In practice this means that very often it is necessary for the client to relay the circumstances of the accident not once but twice. The first account is given to the accident management company and then the second to the lawyer.

Whether the accident claim is accepted or not will be down to the lawyers liability assessment and advice.

By going directly to the lawyer the first interaction with the claims management company is avoided.

In general terms the main thrust of the CMC’s business is to simply maximise the marketing fees they charge their personal injury panel solicitors.

Very importantly, the delivery and quality of the legal service is something that falls outside the CMC’s direct responsibility and control.


Who Chooses Your Solicitor if You appoint a Claims Management Company?

If you sign up with a CMC then the choice of the personal injury law Solicitor who is actually handling the compensation claim is down to the CMC and not you!

  • So the reality is the injured person doesn’t have any choice in deciding which personal injury law solicitor will have conduct of their claim as this is for the CMC to choose depending upon the financial arrangements which exist between them and their panel solicitor’s firm.
  • It’s then literally a roll of the dice as to whether that solicitor’s firm is going to be good bad or indifferent!
  • In certain situations a claims management company can deal with a personal injury accident claim, in-house but is has to be asked whether the CMC’s have the appropriate knowledge, expertise to properly represent accident victims interests?
  • If you want to make your own choice in relation to which solicitor is the best one for your needs then take control, save time and speak to a firm of solicitors directly and cut out the middleman completely.

Who are you speaking to? Don’t appoint a CMC by the Back Door.

  1. It’s not always easy to know whether you are speaking with a solicitor or a claims management company especially if you receive a call out of the blue.
  2. First things first solicitors are not permitted to cold call under their strict professional conduct rules so if you have received an unsolicited call it’s in all likelihood you are speaking with a Claims Management Company.
  3. Best advice is to be extremely wary of anyone cold calling you. In the first instance if you have not given a company permission to contact you then receiving a cold call may suggest that they have obtained your personal details illegally or unethically.
  4. If you ask for the name of the company you will be able to search on the solicitors regulation authority website to see whether the company is registered as a solicitors practice. If not then they are probably a CMC and registration for CMC’s is dealt with on behalf of the Ministry of Justices website.

 


Why are You Safer Instructing a Solicitor Directly?

Qualifications and Experience

  • If you appoint a solicitors practice then you can insist upon your claim being dealt with by a qualified solicitor who will have undergone, by definition, lengthy training and education to practice law.
  • The should have a very good understanding of the law and are in a position to provide you with an expert’s legal representation and advice as well as detailed guidance on your compensation claim.
  • On the other hand if the accident claims management company carries out work for you then they are unlikely to have the same level of legal expertise or qualifications or indeed any relevant formal accident claims education or experience.
  • If so you are probably going to be at a disadvantage straightaway and may not receive the benefits of the same high quality level of legal representation and support.
  • Remember, in simple terms, the role of the CMC is to sell your claim on to the solicitor who will pay the most for your claim. That’s it.
  • CMC’s are not generally concerned with the level of the service you receive or the amount of the compensation that is paid to you.

 

Transparency

  • CMCs unfortunately have a reputation for not providing clear and transparent information in relation to the amount of any fees and charges and when they are payable.
  • Often there can be upfront charges which in the field of personal injury is not necessary and not anticipated if you are dealing with your solicitor on a no win no fee basis.
  • Be suspicious if there are any upfront charges and be wary of proceeding any further especially if only vague information is provided about what charges are going to be imposed.
  • Our advice here is for you to check the small print and then check it again. The finer details are so important – what are the legal costs and legal fees and are there any hidden costs?
  • This is big business for the CMC’s and indeed the legal profession involving collectively huge amounts of money.
  • The sensible advice is to be completely sure, right at the beginning of the personal injury claims process, about exactly what you are signing up for and what’s involved.

 

Regulation

  • Solicitors practices are all regulated by the Solicitors Regulation Authority (SRA) which is responsible for setting out and enforcing the professional standards and conduct rules for all law practices located in England and Wales.
  • It follows that if a solicitors practice does not comply with the conduct and ethics rules the Solicitors Regulation Authority can and will take action to reprimand the firm and take disciplinary proceedings.
  • CMC’s are regulated by the financial conduct authority (FCA) but the rules are not nearly as strict or onerous as the ones imposed by the Solicitors Regulation Authority.

 

Protection

  • If you decide to appoint a solicitor to deal with your personal injury claim then you can be sure that the practice will be protected by professional indemnity insurance as it is a pre-requisite that this insurance policy is in place.
  • If for any reason your solicitor makes a mistake or fails to act or advise you in a way that is consistent with your best interests then there will be financial protection for financial loss to you.
  • Claims management companies may well have indemnity cover but generally speaking their policies may not offer the same level of protection for mistakes that are made during the accident claims process.

 


Instructing us – Our Approach to handling our Clients Personal Injury Claims

First of all we operate a genuine “no win no fee” agreement that sets out our obligations and any fees so you know exactly where you stand. There are no smoke and mirrors here!

If for any reason your compensation claim is unsuccessful then you will not be charged although we understand that some firms do charge for disbursements if the compensation claim for pay out is not successful.

It’s also worth mentioning that some solicitors practices require you to take out an expensive insurance company policy.

As a law practice we do not believe these policies are required as a general rule for accident claims. To us they represent an unnecessary layer of expense which can be passed on to the client and deducted from damages.

We pride ourselves in being fully transparent with our clients and our processes as a whole so that our clients are always aware of where they stand at every stage of the accident compensation claim process.

This helps our Clients to feel safe and secure and in turn they are able to concentrate upon what’s important – their recovery.


Concluding thoughts……

 

  • If you are looking to claim compensation it’s so important that you consider your options and make an informed decision.
  • Hopefully you can readily see there are significant disadvantages of instructing a claims management company to claim accident compensation on your behalf in the first instance.
  • Our strong advice is to take control and go direct to a personal injury solicitor so you can move matters along more swiftly.
  • Don’t be reliant on the accident claims management company who very often represent an unnecessary layer of bureaucracy and are just a middleman selling leads.
  • If you go directly to a solicitor you will be able to assess their track record of success and make an informed choice whilst making sure they are a reputable company who has your best interests at heart 🙂