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Claims Handling Organisations

Volume 407: debated on Monday 23 June 2003

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To ask the Parliamentary Under-Secretary of State for Constitutional Affairs, if he will make a statement about the consequences for legal services of the collapse of (a) the Accident Group (b) other claims handling organisations. [120007]

The move into administration of the Accident Group (TAG) represents a significant individual business failure but it will not prevent people with genuine claims obtaining access to justice. They can do so either by approaching solicitors firms direct or via other accident intermediaries. The Government believe that the personal injury market is able to absorb the loss of TAG as it did previously after the failure of Claims Direct last year and to pick up the bulk of the business.Many solicitors have or are forming large marketing networks to pool expertise, raise awareness among consumers and to provide a better service. New intermediaries entering the market are able to do so with better knowledge of how the market works and what lessons need to be learnt from recent business experience. Those who provide funding for intermediaries and after the event insurers are now better placed to ensure adequate due diligence checks are carried out on new business models and existing operations are thoroughly audited.

We are keeping the personal injury market under review. Claims management companies can provide an efficient and affordable means of handling claims for compensation and help provide access to justice for people with genuine claims. We are working with a range of organisations including the Law Society, the Association of Personal Injury Lawyers, the General Insurance Council, consumer groups and other organisations including claims management companies to encourage improved standards including voluntary codes. There are already a number of industry initiatives at various stages of development, demonstrating the clear desire on the part of most intermediaries to bring about a step change in behaviours.