It is basically a truism to state that at present practically the entire market related to pursuing compensation claims has been taken over by so-called compensation claim bureaus. Where just a few, over ten years ago there was room for individual law firms of solicitors or legal counsels, now companies founded by former claims adjusters or simply people associated with the insurance industry rule.

Essentially, I wanted to write a post here about the client-compensation claim bureau relationship, especially in the context of what the press reports about not entirely proper relations on the client-contractor line.

However, I think this will be the subject of the next post, because while reviewing yesterday’s press clippings I came across a Rzeczpospolita report about an interesting case being conducted by law enforcement authorities in Łódź, which concerns precisely such a paralegal firm.

The Łódź prosecutor’s office was visited by a group of clients who had the misfortune of being injured in a car accident or other misfortune causing liability, most often of an insurer. These victims came across an offer, although probably closer to the truth is the statement that the offer found them, from a Łódź company dealing with pursuing compensation claims.

This bureau, without charging fees upfront, agreed on a percentage-based fee from the sum obtained, often as much as 30%, which was to be deducted from the compensation or damages received into the company’s account. As it turned out, such a substantial fee was not enough for the company owner to satisfy his needs.

Suddenly, clients learned that the compensation had not yet arrived from the insurance company, that there were some technical problems with the payment of damages. After obtaining information from the insurer, it turned out that there were indeed technical problems, but they were rather related to the elementary honesty of the company owner.

As a result of the investigation, it turned out that the bureau’s operator had misappropriated money from damages and compensation from nearly a thousand injured parties for a total amount exceeding 4 million zlotys. Some victims lost only a few hundred zlotys, but there was no shortage of people who diminished their wallets by several tens of thousands of zlotys. In one case, it reached almost a quarter of a million zlotys.

It is obvious that this is undoubtedly an isolated incident and certainly from its occurrence one cannot draw the conclusion that if the injured parties had used the help of a legal counsel or solicitor, they would not have encountered a black sheep in the flock of that profession. However, in the case of using the services of professional representatives such as the aforementioned solicitor or legal counsel, the injured party has one safety valve – they are required to purchase mandatory professional liability insurance. Such regulations do not apply to paralegal firms. Consequently, at least they would have a chance to recover the compensation due to them from the insurer for the accident from the insurer for the damage caused by the solicitor or legal counsel. The only question is, whose help is worth using when pursuing such a claim?