It was 1996, when my auditors and I discovered that the revenue stream from loss of earnings claims was greater than the revenue I received from running a fleet of taxis. I had found a clear gap in the market for jargon free, no risk personal injury management, and I set out to fill this niche.
Historically, the public has had little way of accessing solicitors who specialised in personal injury claims, or telling whether a solicitor was a personal injury specialist. The cost of pursuing a claim was often an issue for claimants. Many could not afford to embark on a claim, while others did not want to risk their money. There was a risk the claimant would have to pay the costs of the other party – costs which could run into thousands of pounds. Legal aid was available for some, but even those claimants encountered difficulties if their circumstances changed. We had a situation where many people were unable to pursue personal injury cases, even though they had a very real chance of winning. Quite simply, they were unable to access justice.
Just as we now have the principle in law that the polluter pays, I have always felt it important that an organisation or person responsible for causing an accident ought to pay. We have a strong social security system in this country, where sickness and invalidity payments are made. I feel, however, it is wrong that people's national insurance payments should cover the costs of another person's or organisation's negligence. It is they who ought to provide the funding to support the person injured, not the employee on low wages. They should not have to subsidise the bad safety procedures of an employer or supermarket, the careless driver or the local authority with a poor pavement maintenance record.
Indeed, the perpetrators of such accidents have little to encourage them to improve. It is often only if a case is successfully pursued and damages awarded, that the perpetrator is forced to look again at his practices. Damages are paid by the insurer, who may force the perpetrator to improve procedures and safety practices, or charge higher premiums.
In 1996, the Lord Chancellor's office allowed solicitors to take on a personal injury case and defer payment by the claimant until damages and costs could be awarded by the courts. The solicitor would simply take a percentage of the award to cover the costs he had incurred. If the case was lost, the solicitor would forgo his costs. However, this still did not address the problem of how a claimant could identify a solicitor competent to win his case, and to obtain the highest damages possible.
I felt that I had the answer. And together with Steve Hyde and Colin Poole we designed a personal injury claims business. Steve Hyde was a salesman, Colin Poole a personal injury solicitor who understood the needs and demands of claimants and felt equally strongly about the need for individuals to access justice.
We researched the potential market and current suppliers. We calculated there were at least two million people a year in the UK who may have suffered an injury through no fault of their own, and had never made a claim.
Our original company, Somerford Claims, dealt with claims for taxis which were off the road due to traffic accidents. This led to expanding the business to injured passengers, who also wanted redress from the legal system. From this small start, Claims Direct developed.
Procedures were perfected and quality standards introduced. Solicitor practices specialising in personal injury claims were invited to join Claims Direct's panel. Many did, as they recognised the benefits of having the field work carried out for them. This would save valuable time interviewing the claimant to discover if there was a potential claim. Witness statements could be prepared and evidence gathered, leaving lawyers to carry out necessary legal procedures which would enable them to act in the best interests of their client.
Claims managers often interviewed the client in their own home, at a time which suited them. Many clients seemed more relaxed speaking to someone in their own surroundings.
Motivating staff is always a key factor in the success of a company and I believe we have found the ideal solution. Instead of employing staff, we offer franchises. The self-employed are generally more motivated, prepared to work longer hours if necessary, and on the whole more flexible. They have a stake in the business, which means the more successful they are, the bigger the success of Claims Direct.
We have always recognised that much of our success is due to our partnership with specialist partners, including Mobile Doctors and Central Law Training. Recently, we announced £100m of funding in conjunction with First National Bank (FNB). FNB is a member of the Abbey National Group and the largest finance house in the UK. This funding will allow clients to take out a simple loan to enable them to purchase after-the-event insurance. The policy will cover all costs, including the cost of the policy itself, should the case be lost. If the case is successful, the solicitor will attempt to recover the cost of the premium from the third-party insurer.
One of the most exciting developments for the company came this June, when I announced the company's intention to float. The market expects Claims Direct to have a market capitalisation of more than £300m!!.
The flotation is an important step in the development of the group. It will create greater visibility and transparency, and enable Claims Direct to capitalise on growth opportunities in the market place, presented by the withdrawal of legal aid and the Access to Justice Act. In addition, the float will allow the group to fund its current operations more efficiently, expand into complementary business areas and make strategic acquisitions and investments. Watch the City pages for more.