By Anita Rice


Rogue claims-handling firms are trying to dodge regulation by presenting themselves to solicitors as exempt from requiring authorisation, the new head of the government's claims management regulation unit has warned.



Kevin Rousell, head of claims management within the Ministry of Justice (MoJ), also confirmed that the unit had passed on the names of several law firms to the Solicitors Regulation Authority (SRA), amid concern over their activities.



He said some claims-handling companies are attempting to mislead law firms by saying they are merely marketing businesses and do not need authorisation, despite the fact they are offering services that lead to personal injury clients contacting the solicitors. 'My main concern is to ensure solicitors are aware they may be subject to such marketing techniques. We want solicitors to ensure they properly understand where they are getting their business from.'



Since the implementation of the Compensation Act 2006 in April this year, all firms offering claims management services - including advertising for potential claims and referring would-be claimants - must be authorised. In addition, solicitors who are found to have dealt with unauthorised companies could face disciplinary sanctions.



Mr Rousell stressed that although the unit had passed on names to the SRA, these were not formal referrals as yet. 'We have referred to the SRA a number of claims handlers and law firms which appear to have breached the rules, or where allegations have been made against them, for a range of alleged breaches varying in severity,' he said.



Despite identifying continued breaches by some firms, a newly-published MoJ report measuring the initial impact of claims management legislation shows regulation has reduced malpractice considerably. It found that since the implementation of the Act, cold calling in person has significantly dropped and there has been a 90% reduction in unauthorised marketing in hospitals. The MoJ also said misleading claims on websites, the inappropriate use of the term 'no win, no fee' and mishandling of endowment claims had been largely eliminated.



Malpractice by companies handling claims against the Criminal Injuries Compensation Authority had also been significantly reduced, it added.



In June this year, the SRA warned that 'solicitor relationships with claims introducers is high on our agenda'. Mr Rousell reminded solicitors to check if a claims-handling firm is authorised by consulting the unit's website: www.claimsregulation.gov.uk.



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