Claims management companies have suffered a barrage of criticism, but John Milne argues that they can work in partnership with solicitors

I am the chairman of a claims management company (CMC) that has 100 employees, of whom 70 are claims managers living throughout the country who visit people in their homes to investigate their claims. We have operations in Scotland and Northern Ireland.



Recent correspondence in the Gazette has been cynical in the extreme about CMCs and also about the future effect of the Claims Standards Federation.



While I find some of the comments understandable regarding the large companies that have ceased to exist, my view is that there is a need for an ethical client-centred business that can attend to clients in a more personal and caring way and get in the business for solicitors.


It has always been my hope that CMCs and claims managers will become regulated, qualified paralegals and part of the legal framework of the country. As a move towards this, I founded initially the Institute of Claims Managers, and later combined with the Personal Injury Federation at the request of a government working party, formed to raise standards in the industry, on which I had been invited to sit.


I became the founder president of the federation, now called the Claims Standards Federation and I fully support new chief executive Tony Burns-Howell. Codes of practice are being discussed with the Department for Constitutional Affairs (DCA), and the Office of Fair Trading. The DCA is represented on the working party; we have been visited by members of the Clementi review team.


This initially voluntary regulation should lead to compulsory regulation, perhaps by 2006. This is what happened in the financial services industry and also with the selling of mortgages.


A key part of this will be training, which has been my special remit. It is likely that the methods used in our training school will be used by the federation and that accredited claims managers will therefore become part of the legal framework of the country.


I do not see this as a war between the CMCs and qualified solicitors, but as a problem to be solved. CMCs mostly work on outdated loan-plus-insurance policy schemes and my opinion is that this model in the long term will not succeed. At my company, we have a different business model. I also believe that solicitors' consortiums, although started with good intent, are largely not succeeding. The costs of many are greater than that of buying cases from good CMCs.


What is the answer to this problem? I believe ethical CMCs and solicitors setting up consortiums need to come closer together and a hybrid operation somewhere in the middle is the answer.


With this in mind, my own company will shortly offer an opportunity to solicitors, not only to secure a supply of cases for themselves, but also to have the chance to share in the capital gain of the company. We should both stick to our areas of expertise, with CMCs doing the marketing, claims managers doing the outdoor clerking, and solicitors running the cases.


The right solution is here before us and means us all working together towards a common goal. That common goal should serve the common good of all those concerned - those who do the marketing, those who do the outdoor clerking (I believe all clients should be visited in their homes), those who run the cases, and last but not least, the clients. It is the clients' best interest we should all be attempting to serve, while making an honest and reasonable living for ourselves.



John Milne is the chairman of Accident Injury Claims