The current personal injury compensation process is "not delivering access to justice", according to the Citizens Advice Bureau (CAB).
In its No win, no fee, no chance report, the CAB called for compulsory regulation to be imposed on claims management companies (CMCs). The government should "introduce primary legislation to bring CMCs and other relevant intermediaries in the personal injury market into the scope of legal services regulation", said the report.
Zurich supported the CAB's calls. A spokeswoman said: "We were disappointed that CMCs were given the opportunity to self-regulate. We continue to be concerned about the level of transactional costs in low value claims."
The Association of Personal Injury Lawyers and the Forum of Insurance Lawyers also welcomed the CAB's report.
The Claims Standards Council, the body charged with the self-regulation of CMCs, said it welcomed the CAB report despite its call for compulsory regulation.
Meanwhile, a report on personal injury litigation in the UK from Datamonitor said the number of accident claims during 2003/4 fell by almost 10% due to a contraction in the number of 'no win, no fee' companies.