A former chief executive of Claims Direct who was struck off the solicitors’ roll has been advising claims management companies on structuring arrangements with solicitors in response to the new referral fee ban, the Gazette has learned.
Colin Poole, who was chief executive of Claims Direct in 2001 when it became mired in controversy, has been contacting solicitors regarding at least one scheme for bringing in claims following the ban.
He told the Gazette that he is advising ‘one or two’ claims management companies which had ‘knocked on his door’, because the system has now come back ‘full circle’ to the Claims Direct model – through which clients pay for legal fees from damages.
There is no suggestion that the schemes breach regulatory rules.
The recent ban on solicitors paying or receiving referral fees, combined with the new £500 fee for low-value road traffic accident claims, has led to a flurry of behind-the-scenes activity from claims management companies, after-the-event insurers and law firms looking to find a new way of structuring their relationships.
Poole told the Gazette: ‘I have written to solicitors and suggested that there are potential opportunities out there… [but] I am not involved in running these schemes.
‘The market is still very much in a state of flux. There are a number of different products being worked out at the moment by a number of different insurers… I don’t know whether anything that I am helping with will get to market.’
Poole was struck off the solicitors’ roll in 2011 when the Solicitors Disciplinary Tribunal upheld a number of allegations against him. These included charges that he had accepted and paid referrals in breach of conduct rules, and had dishonestly misled investors.
Claims Direct went into administration in 2002 following a number of difficulties, including concerns over the amount of compensation received by claimants once compulsory insurance premiums had been paid.
The Claims Direct brand and call centre were purchased by Russell Jones & Walker, now Slater & Gordon, in 2003. The firm did not take on responsibility for any outstanding liabilities or claims against Claims Direct.