Claims management companies in the personal injury sector have been hit hardest by a clampdown against firms failing to comply with industry standards, according to government statistics.
The number of personal injury CMCs fell by more than 1,000 from a peak of 2,553 in December 2011 to 1,400 in January 2014, figures from the Claims Management Regulation Unit (CMRU) show.
Kevin Rousell (pictured), head of the CMRU, the body responsible for regulating the compensation claims industry, said: ‘We do not tolerate bad practice and are continuing our work to drive malpractice out of the industry.
‘Since the referral fee ban came into effect in 2013 we have inspected more than 900 CMCs and seen 500 leave the personal injury market.’
A total of 1,100 firms have been closed since 2007, bringing the number of CMCs down to 2,254 in November 2013. In the last 12 months the government has removed 200 licences from rogue claims management firms.
Justice minister Shailesh Vara said the government was targeting firms that ‘defy the rules and bombard the public with unwelcome calls and misleading information’.
Rousell said the body was working with companies on the receiving end of high volumes of speculative claims, which ‘can clog up the system’.
He added: ‘We are making certain that firms are following the rules at a time of major change for the claims management industry.’