The personal injury claims service has dispensed with the compulsory obligation of its solicitors panel to seek opinion on every case, following a shake-up of its business model.
Prior to the changes, solicitors acting for Claims Direct had to obtain an opinion on the quantum and likely success of cases.
The new Claims Direct model will be based on a conditional fee arrangement (CFA) and claimants will only need to insure against liability for defendants' costs should they lose their case.
Under the old model, claimants could have been responsible for paying both sides' costs. Taking a barrister's opinion provided Claims Direct with a selling point, as claimants were given access to a formal view as to the likely outcome of their claim.
Chief operating officer David Gravell said: “Scrapping the barristers scheme not only helps us become more efficient as we seek to restore the financial health of Claims Direct, but it is also an important step forwards in the launch of our new business model.”
Gravell would not disclose the specifics of Claims Direct's new business model. It is understood that following the £1.5m acquisition of Claimline last month, Claims Direct is moving towards finalising its plans. Broadly speaking, the changes to Claims Direct's old model, which saw claimants take out a hefty insurance policy to pursue litigation, will include solicitors acting on a no-win no-fee basis.
“The modification and improvements are beginning to provide a platform upon which Claims Direct can re-establish its business and reputation”
David Gravell, Claims Direct
The new system will also replace the company's claims manager structure with direct access to solicitors. Gravell said that for now, the company will continue to use its current panel. It is thought that the new model will entail a review of the numerous firms used at present.
Gravell said: “The modification and improvements which we're making to our business are beginning to provide a platform upon which Claims Direct can re-establish its business and reputation.” The company's old business model had caused much media criticism, including censure from BBC's Watchdog programme.
The Bar Council also turned its attention to Claims Direct-related intrigue. The Lawyer (24 September) reported that the Bar Council was looking into allegations that Robert Rhodes QC of 4 King's Bench Walk had paid the company in exchange for work. The Bar Council refused to comment on the investigation.
Barristers' opinions will still be sought for Claims Direct's run-off work.