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The BBC's Jeff Randall
"Claims Direct... has turned out to be horribly accident prone"
 real 56k

Tuesday, 26 June, 2001, 10:38 GMT 11:38 UK
Claims Direct losses mount

The personal injury specialist firm, Claims Direct, has reported a 20m loss for the full-year compared with a profit of 10m last year.

The firm, famous for its "no-win, no-fee" promise, ran into difficulties after the BBC's Watchdog programme featured allegations that some people winning compensation cases in court were seeing their damages virtually wiped out by Claims Direct's fees.

And the troubled firm could be taken private after non-executive Chairman Tony Sullman and Deputy Chairman Colin Poole made an approach which could lead to an offer of 10p a share.

The company floated last July at 180p and stock surged to 360p before the bad publicity caused shares to slump to a close of just 14.5p on Monday.

The news of a possible buyout sent shares falling 17% to 13.1p on Tuesday morning.

Company of the Year

The firm was founded by former executive chairman Tony Sullman, who started the firm from his spare bedroom in 1996.

And as recently as December 2000, Claims Direct received the CBI/Real Business Award as the Company of the Year.

The company blames the press for its troubles.

"The attention of the company received was largely inaccurate and sensationalised but caused severe damage to its reputation, and the level of its case load," said the insurer in a statement.

"We have learnt to our cost that once misinformation enters the public domain it is very difficult to counter its effects," the company added.

Rebuilding the business

While profits plummeted, turnover rose 65% to 65.9m and the number of accepted cases was up 58%.

The firm aims to continue expanding into new areas, offering products related to legal services but no longer exclusively concerning personal injury.

"Our current challenge is to regain lost ground by emphasising the quality of our service and product," said Managing Director Paul Doona.

"My determination is to rebuild our leadership in the market and to demonstrate that Claims Direct stands for quality, integrity... and above all, delivery of the best deal in terms of compensation to our clients," said Mr Doona.

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See also:

25 Jan 01 | Business
Personal injury firm falls flat
02 Jan 01 | UK
See you in court
28 Mar 01 | Business
No respite for Claims Direct
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