But insurers remain unconvinced about industry’s credibility.

While the Compensation Act has helped clean up the claims management industry, it has done little to make insurers warm up to claims managers.

A senior insurance source told Insurance Times that he still considers claims managers to be ambulance chasers – a term historically synonymous with the industry due to widespread malpractice.

Another source said claims managers continue to "feed at the trough" of insurers.

While insurers obviously have their own self interest, consumer perception of claims managers is sometthing over which insurers clearly have an influence. But if insurers and claims managers must co-exist, it might be an advantage to both sides to find common ground.

“No more claims managers are bothering people on town centre street corners.

Andrew Welch, Stephensons

Maybe time is all that is needed in the new regime. Under the Compensation Act, which came into force in April 2007, all claims management companies must be authorised. Of the 1,700 authorised in the first year of regulation, 52 have had their authorisation cancelled or suspended.

Justice minister Bridget Prentice said that the first year of formal regulation has seen the almost total removal of unauthorized marketing in hospitals, cold-calling in person and misleading use of the expression ‘no win no fee.’

Andrew Welch, partner and head of litigation at Stephensons Solicitors, said he has noticed a difference on the ground, with no more claims managers bothering people on town centre street corners.

With such positive results, the MoJ is convinced that the industry is improving and the compensation culture is dwindling. As the sector gains in professional standing, it is possible that those who work in this controversial industry might eventually be seen in a more positive light – or at least better tolerated – by insurers.