Troubled compensation chaser Claims Direct is putting together a
fresh corporate reputation strategy with publicity guru Max
His agency, Max Clifford Associates, is understood to be receiving fees
of £300,000 per year to rebuild the firm's public image after a
string of PR disasters have destroyed its share price. A campaign by The
Sun attacked the company for charging successful clients insurance
MCA was hired by Simon Ware-Lane - founder of rival ClaimLine - who has
built up an almost 30 per cent stake in Claims Direct and plans to merge
the two operations.
Crucially, Ware-Lane has decided that changing the business model of
Claims Direct - in which the first part of any compensation is used to
buy an after-the-event insurance policy - is key to improving its
'Changing the model was essential if we were serious about avoiding bad
publicity,' a spokesman said.
Clifford said it was necessary to relaunch the company following a
bruising past 12 months that have seen the share price drop from last
year's high of 350 pence, valuing the firm at £700m, to just ten
pence last month.
'It was important to stop the constant attacks on the company's
reputation,' said Clifford.
The account at MCA is to be run by consultant James Hipwell, the former
Mirror reporter sacked from his role as a share-tipping 'City Slicker'
columnist over claims of insider dealing. Hipwell is working for
Clifford while awaiting the outcome of a Department of Trade and
Industry inquiry into the scandal.
Ware-Lane, whose rescue of the beleaguered Claims Direct early last
month has at least stabilised the share price, has ended the link with
PR firm Gavin Anderson that he used in the lead up to the deal.
GA associate director Rebecca Penny confirmed her team had stopped
working for Ware-Lane shortly after announcing Ware-Lane's plan to merge
Hipwell said: 'The idea was to cut out negative publicity in The Sun and
on (the BBC's) Watchdog. We had to get The Sun to stop running its
"Shames Direct" campaign against us. Small stakeholders were suffering
as a result of the depressed share price. We now have a new strategy to
get the numbers of callers up.'
Tony Baker, the former deputy CEO of the Association of British Insurers
who advised the firm's previous management on media relations, has given
up that role, but remains an adviser to the company on regulatory
Golin/Harris Ludgate's financial PR role remains unchanged.