By Neil Rose


There are nearly double the number of claims managers operating in England and Wales than previously thought, it emerged this week, after a last-minute flood took the number of applications for regulation to 1,176.



Only a fortnight ago, the head of claims management regulation at the Department for Constitutional Affairs, Mark Boleat, was predicting about 700 applications for authorisation to be regulated claims managers, itself an estimate at the top end of government expectations. Others had put the number at about 500.



Last Friday was the deadline set for guaranteed processing by April, when it is expected that the prohibition, under the Compensation Act 2006, on providing regulated claims management services unless authorised or exempted will begin.



Around half of the 1,176 applications were submitted last week, and more than 75% of all applicants handle personal injury work.



Solicitor Andrew Twambley, chairman of the Claims Standards Council, which aims to act as the sector's trade body, said: 'I think it is great for the claims management industry that so many firms have applied. Implicit in this is that a huge number have completed the forms, signed a statutory declaration and are willing to stand up and be counted.



'It is a very difficult task for a non-ethical company to complete the application form, and the sceptics out there in the market place felt that only a few hundred would surface and apply. The level of applications goes a great distance towards repairing the reputation of claims management companies.'



Meanwhile, solicitors have been warned that if they deal with unauthorised claims managers once the new regime begins, they may be aiding and abetting an offence, and may face disciplinary action.



Guidance issued this week by the Law Society also cautioned firms to ensure that they are acting independently in their clients' best interests, 'particularly if you receive a significant number of referrals from a single source'.



It added that firms had to consider issues arising from a claims manager linking its websites back to that of a solicitor - the latter must make it clear that it belongs to a law firm regulated by the Solicitors Regulation Authority - and from firms having claims management or marketing arms themselves.



Desmond Hudson, Law Society chief executive for representation, said: 'We hope that regulation will tackle head-on the aggressive marketing campaigns, cold-calling and doorstep-selling by some previously unregulated claims management companies, which has long been a serious problem.