The Co-operative calls for crack down on dubious claims to kickstart wider personal injury reform

July 12, 2011

Amongst the broad range of initiatives, The Co-operative is calling for far tougher penalties to be introduced for firms who are profiteering now and illegally at the expense of others.

The Group which has a significant presence within the UK insurance market through The Co-operative Insurance as well as a growing Legal Services business wants the legal and regulatory framework to be tightened and become far more transparent

The Co-operative therefore wants to see far greater fines and banning orders for those firms:

• Who encourage claimants to “falsify claims” and claim for injuries and losses that they have not suffered.
• Who are cold-calling potential claimants via a host of methods including email, text and phone.


In addition The Co-operative believes that claims costs and premiums would be reduced if:

• A consumer-led review group was established with a clear mandate to reduce claims costs and insurance premiums, by factoring in lessons learnt from other countries
• Consideration was given to all motor policies having Legal Expense Insurance cover included as standard. A move which would reduce the need for “after the event” legal expenses cover
• All firms involved in any stage of the claims process were forced to publish their own invoice costs, against agreed standard commercial rates
• It was made illegal for any claims books to be sold onto any third party to farm without a policyholder’s explicit consent
• Consideration was given to banning referral fees in the longer-term, if short-term progress isn’t made in reducing claims costs


With regards to referral fees The Co-operative’s position is that:

• Co-operative Insurance does not take referral fees from external solicitors, accident or Claims management companies or credit hire operators
• Co-operative Insurance and Co-operative Legal Services do not sell claims data to external third parties
Commenting on this issue, Neville Richardson, Chief Executive for The Co-operative Financial Services said:
“We are living in a society where genuine customers are paying the price of higher insurance costs created by a dysfunctional system, which allows un-scrupulous claims firms to operate, without the fear of penalty.

“As one of the UK’s most trusted consumer brands with a long – established insurance and growing legal services business, we will actively look to help shape structural reform within the personal injury sector in order to benefit consumers overall.

“The Co-operative Group believes, however, that a clear statement of intent would be given in the short-term, if a far tougher crack-down occurred right now on those firms currently acting outside the boundaries of the law.”


Notes to Editors:

The Co-operative Group is the UK’s largest mutual business, owned not by private shareholders but by almost six million consumers.  It is the UK’s fifth biggest food retailer, the leading convenience store operator and a major financial services provider, operating both The Co-operative Bank and The Co-operative Insurance. Among its other businesses are the number one funeral services provider and Britain’s largest farming operation. As well as having clear financial and operational objectives, the Group has also set out its social and sustainability goals in its groundbreaking Ethical Plan, which specifies almost 50 commitments in these areas.

The Group operates over 5,000 retail trading outlets, employs more than 110,000 people and has an annual turnover of £13.7bn.  Further information is available at

Dave Smith
The Co-operative Group Press Office
Tel: 0161 827 5614
Mobile: 07702 152771

Nuala Ryan
The Co-operative Insurance Press Office
Tel: 0161 903 3808
Mobile: 07702 505625