Claim Firms 'Fail Injury Victims'

Injury victims entitled to compensation are being failed by "ambulance-chasing" claims firms, according to a Citizens Advice report.

It points out that costs in "no win, no fee" cases can end up being far larger than customers are led to believe.

David Harker, of Citizens Advice, said costs are often "hidden and could wipe out compensation". He added that people "could even end up owing money".

The charity has handled 130,000 cases relating to such claims since 2000.

Legal aid for personal injury was abolished four years ago.

In one example reported to a Citizens Advice Bureau, a Devon woman won her case but was left with just £15 - less than 1% of her £2,150 compensation award, because of hidden legal costs.

'Claims Farmers'

A man from Lancashire won £1,250 for a work accident but ended up nearly £2,400 in debt after taking out insurance which would have paid his costs had he lost the case.

The growth of unregulated "claims farmers" has led to high-pressure sales tactics by unqualified staff, according to the report entitled No Win, No Fee, No Chance.

It claims that unscrupulous salesmen have been known to approach accident victims in hospitals.

Citizens Advice wants the firms selling "no win, no fee" agreements to be regulated and has urged a government-appointed inquiry led by former deputy governor of the Bank of England, Sir David Clementi, to recommend the move.

Mr Harker, who is the charity's chief executive, said: "The personal injury compensation system is not currently delivering access to justice to all who need it. "It has created confusion and unacceptable practices by claims farmers. "There must be changes if consumers are to get the legal protection they deserve."

The charity is calling for costs to be regulated to protect the consumer. It also wants the government to establish a task force on compensation to make recommendations for long-term policy changes.

A Department for Constitutional Affairs spokeswoman said: "We are already taking action on a number of the recommendations in the Citizens Advice report, which we will study carefully.

Regulation

"We have recently told claims management companies that they have one last opportunity to get their house in order. "If they don't, the government will consider how regulation could be introduced."

Around 2.5 million people have an accidental injury each year as a result of road accidents, or negligence by a local authority or employer. Less than a third actually claim compensation, even though they are entitled to do so.

The report was based on 385 reports from 224 Citizens Advice Bureau in England and Wales between January 2002 and September this year.

source: BBC News (Last Updated: Monday, 13 December, 2004)

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