THE number of `no win, no fee' accident claims firms operating is set to fall sharply when the Compensation Bill is introduced later this year, a report has predicted.

Market analyst Datamonitor expects the number of accident intermediaries, which put people who have been injured in touch with a solicitor, to fall from around 400 to just 100 to 150 when the new regulation comes in.

It said the main reason for this was that firms would have to be regulated once the bill came in, and the cost and administration involved in becoming authorised was likely to lead to many firms exiting the market.

The group added that they were likely to come under increased pressure when the Legal Services Bill was introduced in 2007 as this was likely to lead to increased competition in the provision of personal injury services.