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Alan Lakey wins court case against PPI claims chaser

Highclere Financial Services has been awarded £340 through the small claims court after contesting a payment protection insurance misselling claim from a claims management firm.

In a case heard on 9 October at Accrington Crown Court, claims firm Aims Reclaim was forced to pay Highclere partner Alan Lakey £100 for wasting his time and a further £240.20 in legal costs.

Aims Reclaim wrote to Highclere in April alleging the firm had missold a client PPI. It stated seven reasons why the policy was missold, including ‘your sales person did not tell our client the policy was optional’.

Lakey says he has never arranged PPI and that the client in question says they did not make a claim against him to Aims Reclaim.

He invoiced the firm for £100 for wasting his time and when the firm refused, commenced legal action.

The judge found in his favour. Lakey says the judge ruled that Aims Reclaim owed him a duty of care in establishing whether a PPI policy existed before alleging it was missold.

Lakey says: “The judge’s decision confirms claims firms cannot recklessly level accusations about events that did not take place. Further, they cannot make allegations the client has not made or was not even aware of.”

Aims Reclaim declined to comment.

Philip J Milton & Company managing director Philip Milton says: “Claims firms which fish for business without having evidence to substantiate their claims are acting in an unacceptable way. It is admirable that Highclere has taken this to court, but it should really be down to the Ministry of Justice to ensure claims firms are acting within its guidelines.”

In November, Steve Foreman, of GraingerCo Financial Services invoiced a claims firm for wasting his time with an unfounded PPI complaint. He received a cheque for £120.

A freedom of information request submitted by Money Marketing found that, as at July, the Financial Ombudsman Service had referred 13 claims firms to the MoJ for “unreasonable behaviour”. 

The MoJ closed down 209 claims firms between April and November last year. 

The MoJ’s website states that Aims Legal, of which Aims Reclaim is a trading name, is authorised with special conditions.

Since August 2012, it has been operating under the following conditions: it is prohibited from taking payment from consumers in advance of the provision of a claims management service; it must keep for six months and provide to the regulator on request copies of call recordings with clients or prospective clients; and it must ensure that any business acting on its behalf or providing services for it complies with these conditions.

A spokesman for the MoJ says: “Where we have concerns about a claims management company’s activities we can impose additional obligations or restrictions on their authorisation to safeguard the interests of current clients and the wider public.

“Varying the conditions of a CMC’s authorisation is a serious matter and is a decision taken after careful consideration of all the evidence and the consequences of such actions for clients.”

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Comments

There are 20 comments at the moment, we would love to hear your opinion too.

  1. I’ll be the first to say congratulations Alan as it is about time that claims management firms were taught a lesson.

    I’ve always said that if a claim is bogus then an adviser has the right to reclaim costs through the small claims court and you have just proven that this particular route does work. Obviously this comes with the health warning that you have to treat all clients fairly and it doesn’t exclude the client from a complaint process. However saying that this was obviously a fishing expedition.

  2. An excellent outcome for all of us.

  3. Good for you Alan. I wonder why the police didn’t follow this up – obviously fraud.

  4. 10/10 Mr Lakey. Very well done indeed.

  5. Congratulations Alan, good man for standing up against these plonkers, I am now putting an extra sentence on the bottom of letters to claims companies saying it is a criminal offence to make a false claim and will be reported to the Authority’s. please ask your claimant to write to me laying out why he /she believes they have been miss sold. Amazingly the last two claimants have emailed me to say they are no longer pursuing a claim.

  6. I’m also delighted to congratulate Alan on his victory against this particular company who (in my view) serve neither their customers or the industry well. I will however add two caveats;

    1) Please don’t judge all CMC’s by the standards of the worst
    2) Alan – can you please ensure that you make the MOJ aware of this – this is not the first time that this company will have been brought to their attention, indeed it already has a number of conditions attached to its authorisation

    I would also extend point 2 to everybody else reading – if you have a problem with a CMC, let the MOJ know – whilst most of us (including professional CMC’s) would prefer stronger action from them they are increasing their investigation activity and slowly managing to weed out the worst within the industry. (And yes, before anyone else says it there is definitely further to go)

  7. E L Wisty (an only twin) 22nd October 2013 at 4:27 pm

    Most excellent news – serves the bug***s right!

  8. Well done Alan ~ and you had to travel several hundreds of miles to attend the hearing.

    I trust you’ve reported these scumbags to the MoJ?

    As for CMC Manager asking us not to judge all CMC’s by the standards of the worst ~ that’s how the FSA judges us and regulates us accordingly!

  9. Yes, well done Alan. I agree with Harry Katz though.

    This is “Fraud by false representation” and should be reported as such by FOS, the court themselves and, frankly, by Alan Lakey. £340 is a pin-prick; much better if a few of these crooks got their collars felt.

    It would only take a couple of criminal convictions to stop the false claim culture in its tracks.

  10. Excellent news Alan, well done!
    I have recently received 2 letters from CMC’s for separate clients, neither or whom I have ever heard off. A covering letter from them relates to another adviser of the same name, originally based some 200 miles away, who according to the FCA register is no longer authorised therefore I also believe they are simply phishing in the hope that I am that same adviser. Maybe this is the route to go down rather than simply advising them that I am the not the adviser in question?

  11. Well done ,but such a pity our regulator does nothing to defend the industry from these cowboys ,which would be a useful and practical job for client and IFA alike.Who exactly are they concerned with not sure I can ever work it out?

  12. Well done Alan. Might be worth seeing if you can now go for a civil action for defamation, just a shame that it has taken this for them to be brought to task (not that it will probably stop them!). Peter Hamilton’s article this week certainly made me think that maybe the time is right to pool our experiences (and resources) as a sector, maybe via somebody like him, if he is willing! I suspect that one or two CMC’s would be in real danger of a class suit

  13. It is a pity this was a County Court (not a Crown Court as the article states) and therefore does not set a legal precedent.

    One thing I do think needs to be made clear to your clients is that if they engage the services of an ambulance chaser you will deem them to have agreed the claims made and to be jointly and severally liable if they are proven false.

    If they waste your time with false allegations, I fail to see why it is at odds with Principle 6 to seek recompense from them for it. On the other hand, passing the costs of dealing with that allegation to innocent clients unnecessarily seems inconsistent with Principle 8.

  14. Well done Alan. From personal experience I know the time cost of fighting this case for yoij would have been a lot more than the £100, but sometimes you have to take a stand on principle.

    I have had a section in my Client Agreements which explains I will do just what you have done in cases of what I believe to be fraud whether attempted against my firm or any other for about 6 years.

    I am awaiitn a formal response from the FCAs. General Council Division with regard the insertion if mention of tkmebars and longstops in my client agreement 4 years ago when I decided to stand by my principles. It has taken them 4years to ask me to send them another copy (as they refused to read it 4 years ago!). They have 2 days to response before they breach the FOI request their letter triggered.

  15. Good for you Alan.

  16. My very great friend in Rome 23rd October 2013 at 8:42 am

    Perhaps more of a skidmark than a landmark victory, but well done anyway, Alan.

  17. We're all doomed!!! 23rd October 2013 at 9:30 am

    Whilst I sympathise with Paul Hartford, our Regulator, the FCA, is not empowered to do anything about CMCs – the MOJ are these guys regulator, NOT the FSA.

    The fact that the MoJ closed down 209 claims firms between April and November last year, and has also applied special conditions to many other CMCs, these clowns included, would suggest that the regulator (of CMCs) is doing quite a lot about this issue.

  18. While this is great news for the IFA community i can’t help thinking it’s the equivalent of scoring a consolation goal while being thrashed by your local rivals. £340 just isn’t enough to make the dodgy CMC’s stop and think.

    I think Alan’s stand against the false claim should be celebrated but as other commentators have alluded to it’s a long drawn out process that a lot of small companies wont be able to follow through. More should be done to stop the fraudulent claim arriving in the first place.

    Apologies for the slightly negative comments on what is fundamentally a good news story.

    Well done Alan.

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