The Ministry of Justice has announced that claims management companies which are under investigation for malpractice will be named in an online list.
Not only will the company name be listed, but the exact nature of the investigation and alleged misdemeanours will also be detailed.
Currently, the regulations which claims management companies must comply with are set by the MoJ and it hopes that the use of the list will help consumers make informed choices about who they instruct to handle their personal injury or medical negligence claim.
A second list will be put up providing details of case which have already closed, the malpractice involved and how the company was punished.
The number of claims management companies has increased hugely in recent years with an enormous number focusing on personal injury and PPI claims.
It is hoped that the introduction of these lists will help draw attention to the claims management companies which perform well but also to reduce the prevalence of malpractice in the industry.
Tackling malpractice has been an ongoing battle for the MoJ. Last year alone, nearly 150 PPI claims management companies were issued with warnings for malpractice whilst a further 100 were closed down completely. There are over 2,500 claims management companies and with more than 10,000 complaints being made about such companies last year, it is clear that there is work to be done in this area. Most commonly, complaints related to inadequate complaints procedures, a lack of transparency over fees, deceptive marketing and pressure selling.
By the end of the year, claims management companies will be subject to the Legal Ombudsman Scheme which affects solicitors and a code of conduct compelling companies to offer written contracts prior to taking payments will be introduced.
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