In reality, CPD can mean far more than just a means to an end. As many conventional revenue streams dry up, it's increasingly important for professionals to be aware of alternative, and potential lucrative, sectors. It's time to throw away the “tick box” mentality and start to sift through the array of CPD training courses in a more strategic approach—25% participation could result in business development and ultimately survival.

One area that has emerged in the last 12 months is the payment protection insurance (PPI) claims sector. It's exploded, as customers become “clued up” about their consumer rights and it's starting to pay real dividends for the UK's legal profession. The emergence of this sector has opened a previously untouched door for solicitors and conveyancers alike.

Let's put it into context. Each year, more than 7.5 million PPI policies are purchased in this country—worth over £5.5bn. (Datamonitor estimates that total premiums in 2005 were £5.7bn.) In 2008, the number of complaints received by the Financial Ombudsman Service (FOS) rocketed, indicating a changing landscape in the financial irregularity claims sector. The number of complaints regarding PPI increased dramatically to more than 25,000 compared to 1,832 in the previous financial year. The FOS is so concerned that it has referred these figures to the Financial Services Authority (FSA), demanding that this issue be investigated.

In January 2008, the Competition Commission also published recommendations following a 23-month investigation into the sale of PPI. It heavily criticised the lack of competition in the sector and the questionable sales practices of financial institutions. By 2010, banks and lenders will not be able to sell the product to consumers alongside credit agreements, or for seven days afterwards, with a complete ban on the sale of single premium policies.

It's little wonder that regulators are raising an eyebrow in concern, and solicitors are raising another with intrigue. PPI—which provides an income to maintain a borrower's debt repayments in the event of an accident or sickness—is worth all its weight in gold to financial institutions selling the product. The 12 largest distributors of PPI made profits in excess of the cost of capital of £1.4bn in 2006, on their combined gross written premium (GWP) of £3.5bn. This represented a return on equity (RoE) of 490%, with typical commission rates at 50–80% for personal loan and credit card PPI. When you consider that between 11 and 28% of GWP is paid out in claims, compared to claims rates that can be more than five times as high in household and motor insurance, then it certainly is worth its weight in gold.

The sale of this insurance has come under increased scrutiny from all four regulatory corners—the FSA, the FOS, the Office of Fair Trading (OFT) and the Competition Commission. There really isn't anywhere for financial institutions to hide and it's time solicitors began to reap the rich rewards that are beginning to flow from this sector.

So how can solicitors succeed in this very lucrative market? Tens of thousands of customers are seeking compensation from lenders and financial service providers, accused of mis-selling policies covering loans, pensions and mortgages. With providers' claims ratio being so low, consumers desperately need a professional and litigious steer to help them succeed in the pursuit of a claim. PPI can be mis-sold in over 100 different ways and financial mis-selling claims can be made on policies dating back up to six years. This means the process of making a claim is often lengthy and complex. The legal profession, therefore, is ideally placed to pick up the baton, increase the number of successful claims, and with it create brand new revenue streams for its business.

Increasing numbers of solicitors and conveyancers are opting to diversify their portfolios, as other markets continue to suffer due to economic pressures and tighter regulations. Despite the number of PPI claims growing significantly, the sector is still very much at an embryonic stage. While it offers plenty of opportunity for the legal profession, the only way to succeed is to have a firm knowledge of the sector; be able to identify key points in a financial misselling claim; and understand what makes a strong case.

Currently, solicitors are approaching the sector in an extremely tentative manner, because they don't have sufficient knowledge of financial services to confidently take on PPI mis-selling claims. It's only through experience and tailored training that professionals will build up this expertise and subsequently enhance their business. Increasingly, solicitors and claims management companies are collaborating to ensure a high level of successful claims. It's important, therefore, that solicitors utilise the advice on offer as power is knowledge.

For a consumer, pursuing a claim through the FOS can be a time consuming process. Solicitors differ as they can offer the claimant a more comprehensive approach. They will have an increased number of legal angles when approaching a claim; they will have more litigation techniques in their armoury than the FOS; and with the correct training, they will have a thorough understanding of the Consumer Credit Act 2006 (CCA 2006).

Admittedly, solicitors will be treading new ground, but the transition will be a straightforward one. Specialist training providers are there to offer expertise and “hand holding”, without being intrusive. Training can provide essential information on: financial services regulation; conditional fee arrangements; unenforceability of agreements; how to comply with the CCA 2006; relevant case law; and knowledge on how to secure an early settlement. With CPD points also on offer through training schemes, such as those run by Ultimate Law, gaining the right knowledge and expertise in PPI claims handling has a wealth of rewards for solicitors.

Of the 7.5 milion PPI policies sold each year, over half of all customers are unaware that they have a PPI policy and in many cases, these policies have been mis-sold. There really is no better time for legal professionals to strengthen their armoury and get to grips with what will be a highly lucrative sector for a profession under pressure.

For further information about the Ultimate Law training course, please contact 0844 579 1717 or visit www.ultimatelawltd.com