Litigation booms at Claims Direct

By JIM ARMITAGE
Updated:

 

The British are catching the litigation bug in a big way, according to accident compensation group Claims Direct.

The company, which arranges American-style no-win-no-fee legal actions, upgraded its profits forecasts and announced that new cases being accepted each month had jumped from 4,000 at the time of its July flotation to 5,000.

Last year the Centre for Policy Studies estimated that £6.8bn a year is being paid on compensation claims. Most of that comes from personal injury cases.

As well as a high-profile advertising campaign, the company has embarked on a programme of opening High Street stores based on the US 'claim farms' where people can walk in and find out about the claims process.

Brokers were expected to upgrade half-year profit fore-casts from around £9m to nearer £11m following the statement.

Claims Direct also reassured investors that it had settled complaints lodged by a small number of its franchisee solicitors for an amount expecting to cost the company a total of less than £100,000.

Claims Direct currently has 50,000 cases on its books and last year had revenues of £40m. Maiden results for the group will be issued in November. The shares, which floated at 180p, gained 17p to 284p.

Most watched Money videos