Not all Claim Products are Equal

Grass Roots was shocked to hear that at least one claims management company was advising clients to cease repayments and potentially putting these clients at extreme risk.

Grass Roots recently discovered that a certain claims management company was advising clients to cease repayments solely on the basis of their own internal audit report.

Upon giving this advice, this claims management company would receive its 'back end' fee, in addition to the significant upfront fee that the client had already paid. What does this potentially mean for the clients involved?

The Positive Outlook

The best case scenario is that the lender will take no action, agreeing with the claims management company's own internal (non independent) audit. The client will have paid an upfront fee and now needs to find the funds to pay this particular firm's 'back end' fee, a fee that we understand is due in full and cannot be paid via instalments.

The Worst Case Scenario

A far 'scarier' potential outcome is that the lender contests the claims management company's audit and threatens court action against the client. With three key parts of the Grass Roots Defended Claim product missing (i.e. there are no solicitors, no ATE insurance already in place, no Indemnity Guarantee Insurance), the client could end up losing significant amounts of money as:

Without ATE the client risks a potentially huge legal bill

Had the client used Grass Roots' Defended Claim service then After the Event Insurance (ATE) would already have been purchased. This means that, should the lenders win in court, the client is indemnified for the lender's costs.

Without ATE in place the client is taking a huge risk going to court. Should the lender win, it is likely that the court would order the lender's costs to be paid by the client, an amount likely to be measured in thousands, or even tens of thousands of pounds.

Without Indemnity Guarantee Insurance the client may lose the fee paid

Without (first stage) Indemnity Guarantee Insurance (again purchased as standard when making a Defended Claim with Grass Roots), the client would be relying on the generosity of the claims management company to refund the upfront fee.

Again this is no risk to the client of Grass Roots, as the Indemnity Guarantee Insurance, purchased on the client's behalf as standard, covers the Agreed Solicitor Fee (the fee paid to the solicitor to progress a Defended Claim) in full, should a defence be ultimately unsuccessful.

Without Indemnity Guarantee Insurance, arrears and charges are due

When the client stopped paying their loan/credit card (on the advice of the claims management company) arrears will have started to mount, along with charges and interest for missed payments. Again these could total thousands of pounds that the client now has to pay.

Had the client proceeded with a Defended Claim with Grass Roots then they would have had the option to purchase 'top up' Indemnity Guarantee Insurance. This extra insurance could have not only covered charges and interest but also the arrears on the account. With Grass Roots the client could have actually have benefited financially over the months where they had been advised to cease repayments, even though ultimately the agreement was deemed enforceable.

The Grass Roots Defended Claim service has been created in partnership with solicitors and insurers on an exclusive basis. Remember, not all claims management services are equal.

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Grass Roots

Not all Claim Products are Equal

The Positive Outlook

The Worst Case Scenario

Grass Roots (Financial) Limited