Claims Direct will be writing to Class Law Solicitors to discover the demands of disgruntled franchisees and shareholders.

Last Friday the personal injury specialists received a letter written on behalf of approximately 40 claims managers. They are seeking to recover losses suffered by factors such as an alleged breach of contract and misrepresentations.

Claims Direct chief executive Ronnie Henderson said: "We have received the letter and I have passed it to my legal advisers. We will be writing to them [Class Law] to ask for clarification to find out who they are representing and what they want."

Henderson has also called for a full analysis of franchisees who have accepted "exit packages" to cut ties with the company. He said only "five or six" had rejected the offer.

In July 2000, Claims Direct floated, but its share price fell from an issue price of 180p to 8p after adverse publicity. Franchisees and shareholders allege the firm's prospectus did not contain information showing its business models had potentially serious flaws.