A claims company fronted by Esther Rantzen faces an uncertain future as the Government passes a law banning referral fees for personal injury cases.
The claims company that regularly puts out advertisements with Esther Rantzen saying “why trust anyone else with your claim” obtain details of accident victims and sells their details to solicitors for a referral fee a practice that will be outlawed from April 2013. It is also know that the company takes a share of the client’s damages, a practice that is presently virtually unheard of.
The government have taken this action following exposure of the business models of claims companies and insurers showing that the vast majority of personal injury cases are sold this way, fuelling rising costs of claims and premiums.
From April 2013 s56 of the Legal Aid Sentencing and Punishment of Offenders Act 2012 comes into force next year and forbids solicitors from paying or receiving a fees for referring a personal injury case so claims companies who’s only or main form of income are these fees may have no valid business model.
Hopefully this may see an end to spurious text messages offering compensation and cold calling practised by some companies (although not the one referred to above)