A legal battle is underway to try to recover millions of pounds for accident victims who have been short-changed by claims management companies that deducted huge sums from compensation awards. It is estimated that former clients of trouble-hit Claims Direct, in particular have lost more than £60m as a result of being charged costs they weren't expecting.

Now, Manchester-based lawyer John Barstow is beginning an action, involving a group of clients against the company and their solicitors.
Claims Direct say its already been taken up the cudgels on behalf of the clients who lost out. But Mr Barstow, head of the personal injury division of Tranters solicitors, say he has been contacted by around 150 victims – 80% of them former clients of Claims Direct. “Sadly, my experience is that people who use claims management companies inevitably find themselves being ripped off and end up with just a fraction of their entitlement” he says.

One of his clients was left with just £79 from an award of £1500, and another lost £2700 from a £7000 award, which has since been recovered.
Many people, he says, were pressured into signing a legal insurance policy costing £1300 on the basis that the money would be refunded, but it wasn't.
Mr Barstow is now collating evidence from other dissatisfied customers and is asking victims who have lost money to come forward. “In my opinion, such deductions are unlawful and enforceable”. He says, “The more people who joins a class action, the stronger the case becomes.”

He said: “The so-called claims managers of some companies are usually paid on a commission basis for the number of clients they sign up. They are not practising solicitors. The client is required to sign a Consumer Credit Act agreement taking out a loan. This is completely unnecessary, because solicitors will provide a double guarantee, which means if you lose there are no costs to pay, and, if you win your damages are recover in full.”

Manchester Evening News 22.08.02