Hundreds of patients treated by a cosmetic surgeon who has been struck off the medical register have discovered they are not able to claim compensation because he did not have insurance.

Their plight exposes a loophole in the regulations allowing doctors to practise. Although all doctors are told by the General Medical Council they must have insurance cover, nobody checks that they have or disciplines them if they do not.

Fayez Mahfouz had a thriving laser surgery clinic in Harley Street until December last year. The London Cosmetic Laser Centre was advertised in magazines and had a website listing Dr Mahfouz's many credentials.

He was a fellow of both the American Society for Laser Medicine and Surgery and the European Academy of Cosmetic Surgery, and was a member of another eight associations and societies involved with laser treatment.

But on December 22, a GMC tribunal told Dr Mahfouz his name would be erased from the medical register after a variety of charges against him relating to four patients were proved. They included failing to carry out laser procedures with sufficient care and skill, failing to provide appropriate after-care, and making inappropriate claims about the likely results.

But when the patients' lawyers tried to claim compensation, they discovered that the doctor was not insured.

Harold Berwin of McFaddens, who is representing some of the patients, said it was astonishing that doctors could get away without having insurance. "Whilst it is good medical practice to be insured, according to the GMC, there doesn't appear to be any system in place to check," he said. "If even 5% of doctors are uninsured this is extremely worrying."

NHS hospital doctors are indemnified, and so are GPs directly employed by the NHS, but the many GPs under contract and doctors in the private sector are responsible for having adequate cover. Solicitors, Mr Berwin said, have to provide details of their insurance to the Law Society before they are allowed to practice.

A former patient of Dr Mahfouz, who wanted to get rid of the circles under her eyes, said she had had no reason to question his ability. "He came with the right endorsements. He'd been quoted in national newspaper articles. There were a couple of things I asked him about and he appeared to be extremely honest about what he could not do," she said.

But she was unhappy with a preparatory cream he had given her which, she said, made her skin peel and go red. She terminated the agreement before having laser treatment and asked for her money back. She said a cheque arrived, but it bounced.

The patient is now seeking compensation and says she has been contacted by about 100 others who want redress from Dr Mahfouz. Some say they were not warned that their treatment would be painful, others suffered skin peeling and discolouration, and one claimed she had a burnt face.

"I'm absolutely determined to see the right thing done," said the patient, who did not want to be named. "It is a significant amount of money."

A course of treatment cost between £2,000 and £10,000, she said.

The solicitors' firm that represented Dr Mahfouz at the GMC hearing, Mayer, Brown, Rowe and Maw, declined to comment.

The government said it intended to make insurance compulsory, and the GMC said it would take steps to ensure that doctors had cover. It is proposing to make insurance cover a condition of the planned three-yearly check on doctors' fitness to practise.