‘No, minister – CMCs are not the answer to your problem’

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22 February 2018

Posted by Qamar Anwar, managing director of Legal Futures Associate First4Lawyers

Anwar: Why would you want to encourage us to provide legal advice?

Last month, MPs on the justice select committee asked minister Lord Keen what would happen when the government went ahead with its plan to raise the small claims limit for personal injury claims (from £1,000 to £5,000 for road traffic related claims and to £2,000 for everything else).

As it is a jurisdiction in which lawyers do not generally operate – because legal costs are not recoverable – who might help claimants navigate what can still be a complex process?

His answer, surprisingly, was claims management companies (CMCs).

He said: “Good CMCs look after their customers, and if the claims management companies move into this market, it could be beneficial.”

The minister acknowledged the risk that claims managers could effectively act as paid McKenzie Friends, but still seemed keen on the general proposition.

As a marketing collective, we are regulated as a CMC and can say this for sure: it is a bad idea.

We have no intention of taking up this opportunity. We will stick to what we do best – helping consumers find a good lawyer and law firms make the most of their marketing budgets – and leave the legal stuff to the lawyers. That is exactly what the government should do too.

Frankly, it was a strange suggestion by Lord Keen in the first place given how much stick CMCs generally receive from the public, MPs and others.

It is a never-ending frustration for ethical companies like ours that we are tarred by the conduct of a disreputable (and let’s be honest, not insignificant) minority that over the years have readily ignored rules on cold-calling and referral fees and been happy to generate false claims.

For the record, we don’t cold-call – indeed, we support a ban – do not receive referral fees and part of our role is to filter out false claims. There are many other honest CMCs that can say the same. But we don’t provide legal advice and why would you want to encourage us to do so?

Back in October, the then Lord Chancellor, David Lidington, said whiplash cases were “not cases where it ought normally to be necessary to have legal representation”.

There spoke a man who, I strongly suspect, has never brought a PI claim. Or maybe he has and happens to be an expert in questions of liability, causation and quantum. If so, he was better equipped than virtually every other member of the public.

There are those of us who feel like the government has made the decision to raise the small claims limit – to the delight of insurance companies – without really thinking it through. Lord Keen did nothing to dispel that impression.

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March 15th, 2018