Lawyers rush to capitalise on big boom in 'no win, no fee' cases

Litigation is no longer a pursuit of only the monied classes. This is the age of "no win, no fee", and a growing and sophisticated complaints industry now accounts for a market in personal injury claims worth an estimated £5bn.

Litigation is no longer a pursuit of only the monied classes. This is the age of "no win, no fee", and a growing and sophisticated complaints industry now accounts for a market in personal injury claims worth an estimated £5bn.

In the past two years, compensation claims companies have doubled their business by using television advertising to draw people to the new high street "claims farms". Now the Law Society is to join the battle by relaunching the profession's own claims referral business, Accident Line, with a high-profile television campaign. For all these services, the pitch is the same - "win or lose, it will cost you nothing". If you win, your legal costs are met by the other party. If you lose, your lawyer pays.

Solicitors and barristers have rebranded themselves human rights lawyers and set up special human rights businesses to capitalise on the new work. American lawyers view Britain as rich pickings for compensation.

This summer the US attorney Jeffrey M Herman checked out of the Ritz Hotel in London with the names of 100 British women, all victims of faulty soya breast implants. Mr Herman, who specialises in group actions, estimates the combined claim to be worth $100m (£70m) if they succeed against the American manufacturers in the Californian courts. He spent only three days in London to recruit his clients.

Mr Herman, who takes a 40 per cent cut from each case, denies he is ambulance-chasing or cashing in on the misery of thousands of British women. "These women all have horrific stories to tell," he said. "There's an awful lot of anger and hurt out there. This is the sort of case I love - where there are real victims and I can use the law to do some good."

More worrying is the emergence of a new breed of unscrupulous claims assessors attracted by the potentially huge profits to be made.

An investigation by a committee set up by the Lord Chancellor's Department has found evidence of claims assessors taking huge cuts from the damages or under-settling claims (to avoid a court appearance) so that the victim is left with only a small proportion of the compensation.

Evidence has also emerged of members of the emergency services passing on information about victims of road traffic accidents. But most of thecomplaints made to the committee, chaired by Brian Blackwell, concerned harassment and shoddy service. One claims company repeatedly phoned a victim of an accident to get her to make a claim. Another charged £60 for drafting a letter and £30 for faxing it.

The Lord Chancellor, Lord Irvine of Lairg, is now preparing to clamp down on unscrupulous claims assessors and the bigger companies who do not provide a fair service. A spokesman said: "We want consumers to enter into agreements with their eyes open. The Lord Chancellor is considering what further action should be taken at this time."