Claims-management companies banned
Four claims-management companies have been banned from operating in a
Government bid to protect the public from exploitation by rogue
operators.
Claimwise Legal Services and Momentum Network have
had their authorisations cancelled, while GloVista Red and Ezee Claims
have been suspended.
Damages-based contingency fee agreements,
generally used in employment tribunals, were previously free to charge
what they wished before regulation was introduced in 2007.
Says
justice secretary Jack Straw: "Unregulated contingency-fee arrangements
expose claimants to unfair terms and conditions being imposed by those
representing them, which could lead to huge slices being taken out of
their damages.
"These arrangements - unlike, for example,
conditional fee agreements - have until now been without statutory
regulation because of a long-standing legal anomaly."
New
proposals yet to be implemented aim to make sure consumers know, before
they sign anything, how much any claim is likely to cost.
Says
Carl Wright, boss of claims management company Cartel Client Review:
"Consumers must be very wary of firms that make misleading claims of
buying up debt. It may appear an attractive notion, but their lack of
legal experience with unenforceable credit agreements will only leave
consumers in deeper financial trouble, and potentially even in court."