Hundreds of firms have shut following the introduction of tougher laws
More than 700 claims management companies handling personal injury claims have closed over the past year, according to figures released by the Claims Management Regulation Unit, the BBC has reported.
The introduction of new laws in April 2013, part of a legal reforms package aimed at reducing the number and cost of personal injury claims, included a ban on referral fees between lawyers and claims management companies, and also banned firms taking fees from customers before a written contract had been agreed and signed.
Justice Minister Helen Grant said: “Ending these fees which fuelled a growing compensation culture has been an important step to reducing the cost of living for ordinary people – who have ultimately been footing the bill for them through their insurance premiums.
“We have taken strong action to rein in the rogue firms… and the impact is starting to show.”
The number of registered companies handling personal injury claims fell from 2,435 in March 2012, to 1,700 in June 2013.
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