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Concerns prompts warning over handling of personal injury claims

Concerns about how law firms handle personal injury claims, especially when dealing directly with third-party claims management companies (CMCs), have led to us issuing a revised warning notice.

While the vast majority of solicitors are doing the right thing, we have concerns about some law firms. This includes reports of failure to meet with and take instructions from clients, settling claims without a medical report or dealing with third parties when working on claims and paying damages to those third parties instead of directly to the client. And in some extreme cases, bringing claims without the knowledge of the named client claimant. Issuing a second warning notice about personal injury work in two years, we are reminding solicitors of their responsibilities, as laid down in the Code of Conduct, especially the need to have proper knowledge of clients and work in their best interest.

The warning coincides with us producing a thematic review on the personal injury sector involving 40 firms. The review found that firms generally had adequate systems and processes in place, yet also found some issues which could lead to misconduct.

These included relying on just one CMC for leads, inadequate staff training, and a failure to obtain evidence of a client’s identity at the outset, increasing the risk of fraudulent or frivolous claims. The review also included examples of best practice. For example, in relation to CMCs, making sure they registered with the Ministry of Justice, having a formal agreement that they will not cold call, and carrying out random compliance visits to their premises.

Paul Philip, SRA Chief Executive, said: “Personal injury work can involve very vulnerable clients, challenged claims and large settlements. That makes it a highly contentious area of work.

“We expect solicitors to meet the high standards we set. Our updated warning notice lays out our concerns and reiterates what law firms and the profession needs to do to uphold the rule of law and proper administration of justice.”

The thematic review supports the warning notice by looking at some of the challenges firms face when delivering personal injury work. It highlights good practice at many firms but also highlights the poor practice that still exists in some firms.

The warning notice can be found here:

Go to the warning notice

The thematic review can be found here:

Go to the thematic review