Increasing pressure from the FCA and the news that large CMCs will not renew their regulator licence will impact the Plevin litigation market in the coming months. CMCs will have to act fast to instruct law firms before the inevitable court backlog starts.
CMCs exiting the market, including some household names, will lead to a surge of instructions to Plevin litigation law firms. Whilst there are various reasons for CMCs to choose to do this, including the desire to remove themselves from the regulatory framework and costs imposed by the FCA, this does mean that there will be a surge to ensure their clients are handed over to lawyers before the 31 March 2021.
This news will also impact small to medium sized CMCs looking to continue their FCA licence and generate Plevin litigation cases.
New fee caps
The FCA recently announced that it plans to cap fees for CMCs (‘City watchdog plans fee cap for claims management companies’, Law Gazette, January 2021) adding to regulatory pressure on CMCs as it will inevitably result in their ability to charge consumers and drive revenue.
While PPI claims are already subject to a fee cap, the new proposals mean that CMCs would not be allowed to charge more than 15%-30%, depending on the amount a consumer is due. The cap would apply to all claims where a consumer is awarded monetary redress.
A useful overview of the FCA proposals to restrict CMC charges for financial products and service claims, and a sharp response from the Alliance of Claims Companies (ACC), can be found here.
Enter the lead generators…
We’ve also seen a growing number of lead generators that market to those who may have missed the PPI deadline or even had their previous PPI mis-selling claim rejected (despite having held a valid PPI policy).
CMCs are now working in a pressure cooker environment. Those committed to remaining in the industry will soon see their client base being eroded, hour-by-hour, by these new lead generators.
Combined, these fast-paced changes will impact the Plevin litigation landscape and the ability for existing CMCs to maximise the value of their data, unless they act now and bring their Plevin claims forward through experienced, well-funded law firms.
Matt Gwynne, SpectraLegal Finance, said:
“There’s a strong sense of urgency here as law firms will be flooded with Plevin claims from the larger CMCs exiting the market.
“CMCs need to act now and pass files onto proven Plevin litigation law firms, those that truly understand how Defendants approach Plevin cases and how to successfully litigate against them. If your CMC fails to beat this last minute rush, you’ll find your files are pushed to the back of the queue. If your clients go elsewhere, you’ll haemorrhage data value overnight.”
In either case, SpectraLegal Finance recommends using experienced and well-funded Plevin litigation firms – especially members of the SpectraLegal Finance and Alliance of Claims Companies (ACC) Plevin Panel.
This unique Plevin Panel (APP) is only available to ACC members, offering CMCs the benefit of working with professionals who truly understand how Defendants approach Plevin cases, and how to successfully litigate against them.
Simon Evans, CEO at the Alliance of Claims Companies, said:
“The APP offers a solution to CMCs seeking access to legal firms, a solution to legal firms seeking access to affected consumers, and most importantly, a solution for consumers who deserve to be given the best chance of receiving back the money that was taken from them.
Our unique panel with the ACC offers its CMC members choice in litigation support, market strength and unparalleled success in challenging PPI cases in court, backed by unique market intelligence and our specialist funding for Plevin litigation.
“Our message is simple: move quickly and wisely to support your clients, act in their best interest and monetise your files by securing legal representation before everyone else does.
“Having worked closely with Plevin litigation firms, and funded Plevin cases for well over two years and working with the firms and ACC members through our Plevin Panel, we know what a strong legal team looks like. We’re always happy to introduce CMCs to law firms – whether you’re renewing your FCA licence or not.”
If you’d like to discuss funding your Plevin litigation cases with us or for more information on the APP and panel law firms, please contact Matthew Gwynne today or visit our Plevin Litigation Funding page.