Posted by Daniel Brito, managing director of Legal Futures Associate National Claims
Brito: CMCs face strict regulation
The claims management sector has long been misunderstood, with misconceptions persisting about the role we play in the legal process.
While solicitors and law firms are rightly focused on compliance and maintaining the highest professional standards, preconceived ideas about claims management companies (CMCs) can often stand in the way of valuable partnerships that drive efficiency and profitability.
Many law firms assume CMCs are simply lead generators and operate outside their realm of strict regulation, or that they offer little value to established firms. However, the reality is that the opposite is true.
In this blog I’m going to address five of the most common misconceptions about claims management and explain why solicitors should consider or indeed reconsider the strategic value of outsourcing leads to a reputable claims management company.
Myth one: CMCs are just lead generators
A common assumption is that CMCs exist solely to generate leads, passing them on to partnering solicitors with little concern for quality or legal merit. While this may have been true of some operators, reputable CMCs today are highly selective and experts in the qualification process, ensuring only well-vetted, legally sound cases are referred.
We take time to explain the process to claimants, assist with completing paperwork and secure information on their behalf as and when needed from third parties, such as the police, insurance companies, councils and the NHS.
This, paired with regular home visits, is a huge benefit to its partners when it comes to repatching and case progression.
Many CMCs now conduct detailed assessments, gather evidence and verify eligibility to ensure each case meets legal thresholds before passing them on to solicitors. This reduces the administrative burden on law firms, allowing them to focus on progressing claims and supporting clients in their time of need.
In an increasingly competitive legal market, this efficiency in outsourcing can be the number one driver of business growth.
Myth two: CMCs compromise on compliance
Regulation in our sector has strengthened significantly over recent years, particularly with the Financial Conduct Authority (FCA). Despite this, some solicitors remain sceptical, assuming that working with a CMC carries compliance risks.
In reality, compliance is now a central focus for reputable CMCs. Strict regulatory frameworks mean firms must adhere to robust guidelines throughout the process, ensuring claims are handled ethically and transparently.
Law firms working with CMCs should assess their regulatory adherence carefully, but dismissing claims management entirely due to past issues overlooks the comprehensive governance in place today.
Myth three: Working with a CMC means losing control over client relationships
Often, one of the biggest concerns for law firms is that CMCs might interfere with solicitor-client relationships. However, claims management partnerships are built on collaboration, not competition.
In practice, CMCs act as an initial point of contact, helping claimants understand their legal rights and qualifying cases before introducing them to a partnering solicitor. Once a claim is transferred, the legal process remains firmly in the solicitor’s hands.
Myth four: CMCs inflate claims
A lingering perception exists that CMCs push illegitimate claims to inflate lead volumes. While some companies might have engaged in questionable practices, regulatory changes have eradicated this approach.
Today, responsible CMCs focus on quality over quantity. Many have experts on hand to vet each case to ensure only legitimate claims move forward, which benefits both solicitors and claimants, as weaker cases are filtered out early on, saving time and resources.
CMCs that inflate their claims are caught incredibly quickly and, as a relatively small industry, word spreads fast, so we have a duty to operate with integrity and protect our reputation fiercely.
For law firms concerned about case integrity, due diligence when selecting a CMC partner is crucial. Asking the right questions about vetting processes and compliance measures ensure future partners are aligned with internal standards.
Myth five: Claims management partnerships offer little value to established law firms
Some firms believe CMCs are only useful for smaller practices looking to build on their pipeline. However, even established firms can benefit from a steady flow of high-quality, outsourced claims.
Working with a CMC provides predictable case flow, reducing the need for extensive in-house marketing efforts. For specialist firms, partnerships can ensure access to specific claim types, allowing them to focus on their expertise while maintaining a consistent caseload.
Beyond case volume, partnerships with CMCs can aid firms in scaling their business. Instead of dedicating internal resources to business development, firms can concentrate on providing expert legal representation for a reliable flow of work.
Why solicitors should take a fresh look at claims management
The legal landscape is evolving, and forward-thinking firms are re-evaluating their approach to generating leads. While concerns about claims management persist, many are based on outdated assumptions rather than current industry realities.
As the regulatory environment continues to strengthen, reputable CMCs are playing an increasingly valuable role in the legal ecosystem. Law firms that take the time to assess potential partnerships are likely to find that a CMC enhances efficiency, improves case quality, and ultimately benefits both solicitors and claimants.
Rather than dismissing claims management outright, solicitors should consider how a well-managed partnership could complement their existing operations. In a legal market where efficiency and case quality are paramount, working with the right CMC can provide a strategic advantage.
What an interesting read…. Apparently, CMC’s that inflate their claims are caught incredibly quickly…. I know of a number of companies in the Blackburn area that phoenix, all based at the same address, that haven’t been caught quickly and are still acting in questionable ways. Albeit one of them is in the process of closing down in an attempt to hide the dirt.
Some solicitor firms are not ethical. They are not compliant. They are implicit in the underhand tactics used by their right hand man, the CMC.
I’m sure we’ll be reading more about the dubious ones (involving a director who has already been proven to have taken the money & sped for the hills – he’s still doing it….) in the near future once the evidence is exposed.