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Thursday, August 12, 1999 Published at 10:31 GMT 11:31 UK

Business: Your Money

Compensation sharks targeted

Compensation claimants may be better off with trained legal experts

An investigation is being carried out into allegations that consumers wanting to pursue legal action are being over-charged by people who are not qualified lawyers.

The BBC's Jane Peel reports on Michael Cooper's recent compensation disappointment
The suggestion is that the growing numbers of consumers seeking compensation after accidents or employment disputes are being ripped off by a new breed of untrained claims assessor.

Examples of apparent malpractice include the case of Michael Cooper, from Birmingham, who was left with 197 out of 2,500 compensation after an employment tribunal case.

The Lord Chancellor, Lord Irvine, recently established the Claims Assessors Review Committee to investigate how widespread the problem was after receiving complaints - mainly from lawyers.

Undersettle claims

Committee chairman Brian Blackwell has been trying to gather evidence of how widely claims assessors are being used but believes that many consumers may not realise they have had a raw deal.

Brian Blackwell: "Claims maybe being undersettled"
So far, the only hard evidence has come from the Department of Trade and Industry. It recently wound up a company, Direct Legal Advisers, which operated in both the personal injury and employment fields.

In its case, more than half of the clients received no money at all in successful employment claims, with the maximum received being around a third of the award.

Allegations which the Lord Chancellor has asked the committee to look into include claims that assessors:

  • Undersettle claims because they are not qualified to take cases to court

  • Are not qualified to assess full potential of claims so may miss some areas for which compensation could be claimed

  • Charge fees which are too high

  • Cold-call victims - a practice known in the US as ambulance chasing

With most of the complaints having come from the legal profession, and with the committee being established by the Lord Chancellor, there have been suggestions that the initiative is an attempt by solicitors to tighten their grip on what is a growing and potentially lucrative area.

Mr Blackwell, acknowledging that this had been an issue raised, said: "We have tried to give the committee balance.

"We have the Consumers Association and trade unions represented, and also the insurance industry - it is not just people from the legal profession trying to stitch up their own interests."

The committee is due to report before the end of the year on whether any further control of the sector "is needed in the public interest".

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