January 28, 2011 at 4:37 PM

This week I have received three enquiries from different accident management companies, asking if we would be interested in joining their "panel of solicitors".

I have noticed that the number of similar enquiries has increased significantly in recent months.  I can only hope that the reason for this is that solicitors are eventually wising up to these middlemen and that they are therefore having to trawl their net wider to find those desperate enough to dip their toe in to the murky waters inhabited by these organisations.

Twenty years ago, no one had heard of accident management companies.  They seem to have sprung from nowhere to jump on the bandwagon of misfortune.  Their success however, is purely down to the legal profession.  If solicitors had refused to buy work from these companies, they would never have got off the ground.  But buy work they did and before we knew it, a whole new industry had appeared.

I have heard stories of solicitors paying referral fees of over £700 for even a modest road traffic accident claim, where the solicitors own costs for dealing with the claim are unlikely to significantly exceed £1,000.  That means the solicitor is paying 70% of their own fee to the introducer, when the solicitor is having to do all of the work!  What sort of business model is that?  No wonder the bulk of all road traffic accident cases are now processed through large, "paperless", litigation factory operations, largely staffed by people with no legal qualifications.  The whole process has had to become dumbed down for these law firms to operate within the miniscule margins available.

Accident management companies are bad news for everyone, apart from the accident management companies of course.

If you are unfortunate enough to have an accident and wish to consider making a claim, please do yourself one very big favour - speak direct to a solicitor who is a member of the Law Society's Personal Injury Accreditation Scheme.  Do not approach an accident management company - even if they do offer you the earth!