Citizens Advice welcomes regulation of claims farmers
3rd November 2005Citizens Advice today welcomed the publication of the Compensation Bill as the first step towards effective regulation of the claims management industry.
The Bill will create a licensing system for non-lawyer firms engaged in claims handling. Individual claims handlers could face two years in jail for operating without a licence.
Citizens Advice Bureaux have dealt with 130,000 legal problems concerning personal injury over the past 5 years and regularly find that consumers are failed by claims management companies who sign them up to so called 'no-win no fee' deals.
Bureaux often report that their clients have been subjected to high pressure sales tactics and entered into loan arrangements which have meant that they end up losing their compensation.
Citizens Advice has been in the forefront of campaigning for better regulation of the claims industry, and has published a series of reports exposing the scandal of how claims farmers operate.
Commenting on the new legislation, Citizens Advice Head of Social Policy Dan Vale said:
"We are delighted that the Government has responded to demands to regulate the claims industry. Too often we have seen claims firms targeting people when they at their lowest, and getting claimants to sign up to loan arrangements they don't understand. It is the rogue practices of claims management firms that have helped fuel the misguided idea that there is a 'compensation culture' in this country.
"Injury victims and others with legitimate claims deserve better than this. The rules on entitlement and the process for claiming compensation need to be clear and transparent, and the industry needs to recognise that it is dealing with vulnerable consumers who find the whole system complex and confusing. People are entitled to expect a high standard of service, advice and information on their rights. Self regulation is not working, so it is therefore only right that companies providing these services should be required to be licensed."
Last updated: February 22, 2007