The Government has inspected more than 900 claims management companies (CMC) since the introduction of the referral fee ban, with 500 of them leaving the personal injury market.
The Ministry of Justice has also revealed that the Claims Management Regulation Unit revoked 200 CMC licences last year, while the number of personal injury CMCs has fallen from a peak of 2,553 in December 2011 to around 1,400 in January 2014.
The Government described the licence removals as part of wider action to clamp down on bad practice, “including bombarding the public with misleading advertisements and cold calling”.
“We have made it very clear that it is our absolute priority to protect customers and help organisations and businesses that are on the receiving end of high volumes of speculative claims which can clog up the system,” said Kevin Rousell, head of the Claims Management Regulation Unit.
“We are making certain that firms are following the rules at a time of major change for the claims management industry.
“We do not tolerate bad practice and are continuing our work to drive malpractice out of the industry.”