NEWS ANALYSIS: Winners don't take all in personal injury litigation - Sustained media criticism of the lucrative personal injury claims industry has created a fresh batch of opportunities for those who relish a tough PR challenge, says Maja Pawinska

It is becoming increasingly commonplace to see TV ads telling you

that if you've had an accident you could be entitled to thousands of

pounds of compensation.



It should come as no surprise that personal injury claims firms are

eager for new customers: one estimate puts the potential value of this

market at pounds 4bn. And this for a sector which only started to

flourish last April, with the phasing out of legal aid for such claims.

Trumpeting themselves as champions of the little man wanting justice,

these claims firms hoped to watch the customers - and the cash - roll

in.



Spending millions on straight-talking TV ads - The Accident Group (TAG),

has the slogan 'Where there's blame, there's a claim'. While Accident

Line is backed by the Law Society so is more circumspect, it still uses

TV ads along similar lines.



Amid protests about a US-style 'claims culture' sweeping the UK, this

sector has taken a media battering. Claims Direct, in particular, has

had little respite from bad publicity over the last year, despite an

pounds 18m ad spree. The company's tarnished image led to marketing

director Roger Plantier leaving this month, and CEO Colin Poole taking

on responsibility for marketing and communications.



The Sun and Watchdog have been keen to find claimants whose awards were

eaten away by the insurance premiums demanded by the company to cover

costs. They may operate on a 'no win, no fee' basis, but the flip side

seems to be 'big win, big fee'.



Claims Direct comes under the spotlight because it is the only listed

company in its sector, and has posted two profit warnings since going

public last July. TAG has also been subject to attacks from the media,

but has emerged unscathed because it is not obliged to put out press

releases announcing bad news.



Claims Direct spokesman Tony Baker says 'claim management' firms perform

a vital service that benefits those who otherwise might not pursue

claims out of fear of approaching a solicitor.



But he admits that apart from problems with its products, Claims Direct

had a flawed comms strategy, which didn't help when there were

complaints.



'We advertised to get customers, and didn't spend time making our

services better known to opinion formers. Because the business grew so

significantly, we focused on day-to-day success rather than thinking

strategically about our partners - government and the insurance

industry,' Baker says.



Until recently, the company had no briefing materials on policy,

benefits, or terms and conditions. This led the media and insurance

companies to think the company was secretive. Suspicion of the sector

reinforced problems when the Access to Justice Act was introduced last

year to make things fairer for consumers, so if they win a claim, the

premium paid to the claims company comes out of the losing insurer's

coffers rather than the payout.



Claims Direct says it is making efforts to communicate better with the

media and stakeholders after introducing clearer policies, and the

emphasis is shifting from advertising to PR. 'We need to use the media

rather than just paying for it. Dealing with the media has been done at

too low a level and has been reactive,' says Baker.



Golin/Harris Ludgate is the company's financial PR agency and has

handled crisis PR since Claims Direct featured on Watchdog last

October.



MD Reg Hoare says he has advised the company to get its house in order

internally, and carry out a programme of education with journalists:

'There was a great deal of ignorance about what the company did, so when

bad news came out, it was reported in a misleading and hysterical

fashion. Another problem has been that bad news just kept coming, and

they've been on the back foot the whole time.'



Hoare believes the efforts the company is making are showing signs of

having an impact on perception. They are also helping the share price

but there's a way to go before the 35p shares get anywhere near last

year's high of pounds 3.50.



At litigation PR specialist Cicero Consulting, CEO Stephen Lock is still

troubled. He says the reason the 'no win no fee' process works in the US

is that the claimant only has to insure against losing the case and

paying their own legal costs - each side bears its own costs whatever

the outcome. In the UK, the loser has to pay the other side's bill

too.



'If you have a little guy taking on a council, their legal bill will be

huge and the amount the little guy might have to stump up is potentially

vast. To make the numbers work they have to charge huge premiums which

are sometimes totally out of kilter with the potential award,' he

says.



Lock's distaste with 'ambulance chasers' is such that he doesn't believe

there is any PR strategy which will change things for the claims

companies: 'The problem is the existence of these firms,' he insists.

'Consumers should be looking for before-the-event insurance, not

after-the-event - there are a variety of personal accident insurance

policies which include litigation cover.'



Claims Direct and its competitors may be trying to clean up their act -

they certainly are trying to project that message. But it will take some

PR job to appease those who believe they shouldn't exist in the first

place.



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