The Ministry of Justice has reported record numbers of unauthorised claims management companies have been shut down within the last year.
Nearly 350 firms were closed down last year in comparison to 35 the year before – a ten-fold increase.
This follows the Ministry of Justice’s reforms including restructuring ‘no win, no fee’ deals to discourage needless and excessive litigation as well as reviewing the way advertising is used by claims management companies to attract business.
The 349 firms who had their licences taken away in 2010/11 were either found to be in breach of rules or failed to meet the regulator’s requirements for authorisation.
In the worst cases, the reasons for action included evidence of fraud, misleading marketing and aggressive sales techniques.