Claims regulation - painful but necessary

The personal injury sector is about to undergo radical change as the government attempts to drag the industry kicking and screaming into a new regulated environment.

The legal profession has been crying out for this and by April 07 the regulatory body will finally bare its teeth. Here is the DCA website - its hard to find on their main site so bookmark the link if required.

The regulations are designed to put a stop to sharp practices in the industry with genuine claimants losing hard earned compensation in payment of legal fees or expenses that should otherwise be recoverable from the defendants. Cases are captured by non qualified / regulated claims farmers and then sold on to solicitors desperate for the work. Kickbacks for medical reporting fees and insurance abound and the client can often (but not always) lose out.

There are many more issues at stake but lets just say Im in total agreement with the forthcoming changes.

My worry is that the changes will ironically hit some law firms more than they will the so called claims farmers. Many law firms dont market themselves and instead rely on being fed work from the claims farmers. Some law firms pay good money for the cases - £450-600 per accepted claim - and have no other sources for acquiring new business.

The claims farmers are rushing to obtain authorisation under the new regs. Most of the decent ones will prevail and may actually be empowered by the new rules. They will gain a form of legitimacy that up to now has eluded them.

Some claims firms will however not bother to seek regulation. They may be too small to cope with the fees or the onerus duties involved. They may be too damn dodgy to even give a sh!t. They wont like the fact that they cannot cold call in the way they did previously and they wont like the promise of a random inspection by the regulatory body (who have suggested they will take a peek from time to time)

This will create a sub layer of "bad" firms that will trade around the regs. This sub layer will still find desperate solicitors ready to accept their work - despite knowing that this is a breach of Law Society rules and completely illegal.

Its a supply and demand situation. Such firms may eventually die off, but my fear is that they will become re-sellers flogging their illegally acquired claims through legitimate regulated firms. Imagine that - crap firms still trading but selling on thru legit companies.

So what of the legitimate firms? There will be less competition. The big ones are going to become powerful. They will hold court in a similar way to, God forbid, TAG & Claims Direct

If you want a stocks option tip - there it is. The big claims companies will grow.

The law firms on the other hand have a major problem. The smaller firms will struggle to gain panel memberships. They will be faced by TESCO law fairly soon and this will eat away again at the opportunities available. There will simply be less business available for small to medium sized law firms in this sector.

So here are some thoughts for any law firm out there who might find themselves in the firing line. I dont seek to patronise nor do I pretend I am a soothsayer with a crystal ball. I do, however, know something about marketing and I work for a firm that has already grasped some of these issues:

1) The next few years are going to be very difficult - there will not be enough work - register that thought. Its a fact

2) Tesco law will eat away at everything. Check the Halifax legal services website which is a similar venture and equally frightening - just for a moment imagine the scale - the threat and the reality.

3) Market yourselves. If you dont know how to - learn. Get yourself a marketing consultant - recruit one even. It might be £30k-40k well spent

4) Provide a marketing budget - this will need to be over and beyond what you are currently

spending (although if your claims are no longer coming in - you can re-assign those funds)

5) Build a website that works and brings traffic. Learn about web advertising and organic search engine ranking. If you dont have a workable website - give your senior partner a slap

6) Look at other products - financial services for example - its a great niche seldom embraced by law firms. Use the "trust" factor most lawyers have - OK we may not be well liked in some quarters but we definitely out rank an IFA.

7) Look at staff levels - have you too many fee earners right now? Should you promote any more partners or associates that you may need to ditch next year?

8) If you are an up and coming solicitor - is your firm doing enough to protect your future? If not - MOVE ON. But before you do, why not make a few suggestions about managing some of these issues.

In summary - wake up and smell the coffee people

The times really are a changing!

Internet security and the all important client feedback / contact process

One of the enormous benefits for any law firm in having a web site is the opportunity to secure new business directly from the Internet.

There is nothing quite like receiving a fantastic new case via an online feedback form or e-mail. This is even more satisfying when the case has come to you, not through advertising, pay per click or affiliate marketing, but simply directly from the FREE organic search listings on say Google or Yahoo etc.

The problem that we have as a law firm is that we are not particularly clued up on the necessary security that is required to run an effective online business. For example, our feedback forms are built in PHP and they are very very bog standard in their complexity despite looking quite snazzy on page.

We have had to learn very quickly about the key security issues associated with feedback forms, because in recent weeks our network of legal sites have been attacked by various forms of spam or viruses. We have received enormous levels of link comment spam and have also suffered from something known as PHP injection security breaches. We seem to have been targeted and have had to resolve the problem urgently and effectively.

We have hired programmers to build more secure feedback forms in PHP, that rely on additional security features including image verification. You will have come across this before and whilst the mechanism can be a nuisance, you can guarantee as much as possible to the site visitor and prospective clients, that the information they provide will be safe. You can also prevent robots from infiltrating the code in the way that we have recently encountered.

One of the most effective methods of securing your feedback forms, is to use CAPTCHA coding. You can introduce this without drastically amending your current PHP or equivalent forms and the programming can be extremely cheap.

Another problem that almost everybody on the Internet will come across, is that the moment you post an e-mail address, you can guarantee yourself significant numbers of spam communications, once your address has been harvested. The only way around this problem, is of course to not hyperlink your e-mail address and perhaps work around this by using an image of the text / address. Some businesses will quote "at" instead of using an @ sign. None of these workrounds are very helpful for the site visitors but what else can you do? Id sure like to know.

It would be great to hear from any other law firms that have encountered security problems and managed to overcome them.

We are learning fast, but you get the impression that in the online world, nothing is very secure for very long.

The Personal Injury small claims limit - £2500?

For those not too well versed in the key issues within the personal injury market, this year could be quite interesting for one simple reason. The "small claims" limits for personal injury claims is currently being reviewed and is subject to quite an intense debate.

To give you a bit of background, in order to have an entitlement to costs you must firstly achieve damages for pain and suffering that exceed £1000. This is not a considerable amount of money and with an average two to three month period of pain and suffering fetching around £800 to £1250, its is fair to say that insurers probably pay out more than they would like at the lower end of the market.

It must however be said that the average claim for soft tissue injuries will usually involve a period of pain and suffering that extends beyond three months and one could generally expect damages in the region of £1500 to £2500. I would be confident in saying that around 60-70% of the claims that my particular firm deals with, fall into this category.

Now defendant insurers obviously are not happy at having to pay costs on what they consider to be moderate to minimal personal injury claims. They would much rather put the legal representative out of the loop completely and deal with the injured claimant a personal level. They argue that the claimant will end up with the same result with or without a solicitor and the whole process will be quicker, more efficient and ultimately more rewarding for the injured party.

This frankly is complete nonsense.

I have great knowledge of the workings of personal injury claims departments within insurance companies. I know personally many people who work in such departments and have done for quite a few years. To say that insurers will treat claimants "fairly" really is stretching it.

Defendant insurer departments have various techniques to ensure that they pay as little as possible to injured accident victims. Many claims departments work according to strict rules in terms of reducing the cost of claims and every payment is made, generally is very tightly controlled. A "reserve" is put on each file and the case handler is expected to settle the claim UNDER the value of the reserve. Severe bollockings are dished out in some cases if they fail. They also use computer software to "value" claims and there is little or no room for negotiation. That is of course unless you are legally represented. With such representation, if the offer is unfair, you have the right to sue.

The insurers would make mincemeat of your average member of the public in this particular environment. Whilst they wish to reduce costs and save time, from their point of view this can only happen by removing the role of the solicitor from the process.

The Association of British Insurers (ABI) have made a recommendation that the small claims court limit for personal injury claim should rise to £5,000. To put this into perspective, this would take in all claims for moderate to severe soft tissue injuries, minor fractures such as wrist fractures uncomplicated arm fractures and even simple like breaks.

The DCA who are currently reviewing the personal injury process proposed a figure of £2500 as a compromise. Whilst this is much more reasonable than the rather ridiculous £5,000 suggested by the ABI, it is still far too high.

The figure of £2500 probably represents around 60% of the personal injury market. Many law firms would go out of business and there would be far less availability for legal representation. In addition to this, there would be extreme difficulties for claimants trying to recover appropriate damages should their case fall within the £2500 limit. The level of personal injury damages which has remained unchanged for many years at the lower end, would reduce still further and the only winners here would be the insurers.

The debate continues and I could go on forever about the benefits of retaining legal services even at the lower end of the personal injury market. This is a completely biased view but I have had many years of experience in dealing with insurer claims departments and they really do only have one objective. That is to save as much money as possible on each and every single claim that they deal with. I have no problem with insurers saving costs and trimming processes to meet objectives but what is at stake here is the issue of fairness and justice for individuals that have suffered an injury.

As you can always tell I feel quite strongly about this subject and will write further updates during the course of the year. If there are any personal injury practitioners out there or any insurer friendly practitioners /staff, I would welcome your informal views on this.

Celeb Big Brother

In my attempts to stay young and in tune with the "street" I have been watching Celeb BB.

I am completely smitten with Shilpa Shetty who is probably the coolest, most composed, beautiful asian lady I have ever seen.

She deserves better than the treatment dished out by the venomous Jade Goody.

Shame that Jade's career is now over - she had done pretty wellfor a thick lass after being labelled the BB pig a few years ago. I liked her robustness and she was a fine example of how brains dont always matter

Now though I think she will be thrown to the wolves

As for the delighful Shilpa - not sure how she will fare but I hope we see more of her.

Decent legal websites

Aa little birdy tells me that I received a mention from Delia Venables of http://www.venables.co.uk/ via her monthly newsletter. In return Im happy to provide alink to probably one the best UK legal websites out there.

Its a site that covers everything under the sun that comes under the "legal" banner. Take a look if you have a moment

This got me thinking about other USEFUL rather than self serving legal websites. There aint that many in all fairness.

A few more candidates would be:


http://www.advicenow.org.uk/ - which is a great selection of links on similar lines to the venables project

http://www.clsdirect.org.uk/legalhelp/faq.jsp?lang=en - the CLS FAQ pages are also pretty decent on the subjects covered

http://www.legalservices.gov.uk/ - legal services commission website

http://www.adviceguide.org.uk/index.htm - the official CAB site has always been a good one for general info. No more than you would expect really

http://www.legaljunction.co.uk/ - Not a bad selection of useful links. Looks a bit directory-ish but works well enough for general legal info


Most of the rest are selling something whether it be their own services, legal documents or google ads.

Any more worthy of a mention?

Break in!

The other night my house was broken into. Back door lock barrell was snapped in half and knocked thru ( a process which takes 30 seconds apparently) but they failed to release the lock and so instead threw a brick through my kitchen window.

My pooch was in the next room happily snoozing whilst I got robbed. Good job I love the bitch

Never encountered this situation before and so absolutely shat myself on the night. Its pretty scary stuff when you are the ones affected. Apprently they saw my car keys hidden behind the fridge - you can see them from one of the kitchen windows. How stupid am I?

Ive since learned that the average lock on the average door is useless unless it is of a specific design and unless your door also has secondary security accessories such as sash jammers or mortice type locks.

I dont want to worry anyone (and its not a well read blog so the ripple this causes will be modest to say the least!!) but the chances are that your house is pretty vulnerable.

These tossbags do not care about alarms. They will break in and risk capture without a second thought. They will kick your door in or break the lock and Ive seen how easy it is to do the latter. Then they'll run for the hills and you either smack them or let them escape.

Its a terrifying ordeal

There are two things I would recommend to anyone who might wish to improve their security

1) Fit "snapsafe" lock barrells which cannot be snapped in half like the standard lock. Instead they break in layers so that the internal lock remains intact. http://www.squirelocks.co.uk/html/cylinders_snapsafe.htm

2) Fit Sash Jammers - even if the fuckers get thru the lock they wont get in with these babies fitted.
http://www.sasshop.co.uk/catalogue/products/BW0501.htm

Its the doors that you should worry about not the windows. Start with the door and then fix the rest. Dont be a victim like I very nearly was.

Here's some more tips from relevant webpages:

http://www.met.police.uk/crimeprevention/burglary.htm
http://www.homeoffice.gov.uk/crime-victims/reducing-crime/burglary/


Oh - and a merry christmas to all!!

(I feel better already now Ive blogged and got this off my chest)