Claims management company

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In

litigation, or claims under regulation schemes or voluntary arrangements.[1]

History

The abolition of

after the event insurance policies. It was estimated that there were about 1,000 such companies in the UK in 2003.[2] However, there was still evidence that many meritorious claims were discouraged by the difficulties and costs of litigation.[3] These concerns, especially around the operation of conditional fee agreements, led to regulation of the market by Part 2 of the Compensation Act 2006.[4][5] The activities regulated are those common to the market and which had caused concern:[6]

  • Advertising for cases;
  • Advising a claimant in respect of claims;
  • Certain large-scale referral activities;
  • Investigating the circumstances, merits or foundation of a claim, with a view to litigation;
  • Representing a
    claimant
    to any body, in writing or orally;

— in respect of claims:

Regulation

In

Claims Management Services Regulator.[8][9]
It is a
summary conviction, by a fine of up to level 5 on the standard scale or 51 weeks' imprisonment. If convicted on indictment in the Crown Court, offenders can be sentenced to an unlimited fine or two years' imprisonment.[10][11] Where a corporate crime is committed, the offender can only be fined and not imprisoned. The claims regulator also covers the processing and evaluation of complaints against claims management companies.[12]

Solicitors, barristers, advocates and some other lawyers are exempt, as are:[13]

Incidental referrals to lawyers are also exempt[13] as are services in respect of counterclaims, or claims for contribution or indemnity.[14]

Claims Management Services Regulator

The Claims Management Services Regulator was created by section 11 of the Compensation Act 2006.[15] The post of Regulator was held by the Secretary of State for Justice to authorise and regulate claims management companies and:[16]

  • Set and monitor standards of competence and professional conduct;
  • Promote good practice, in particular as to the provision of information about charges and other matters to users;
  • Promote practices likely to facilitate competition;
  • Ensure that arrangements are made for the protection of users, including complaints handling.

The rules and procedure for authorisation are defined in the Compensation (Claims Management Services) Regulations 2006.

criminal prosecution.[18] It is a crime to obstruct the Regulator, punishable on summary conviction by a fine of up to level 5 on the standard scale.[19]

A person may

Court of Appeal.[20]

When section 161 of the Legal Services Act 2007 comes into force, claims management services and the Regulator will fall under the supervision of the Office for Legal Complaints and its ombudsman scheme. It has been suggested that the first complaints will not be handled until 2010.[21]

Claims Management Services Tribunal

The Claims Management Services Tribunal was created by section 12 of the Compensation Act 2006 to hear:[20]

  • appeals from persons against a decision of the Regulator about authorisation; and
  • after section 13(2) of the 2006 Act comes into force, references from the Claims Management Services Regulator in respect of complaints or questions about the professional conduct of a claims management company.

In January 2010 the Tribunal was abolished and its functions transferred to the First-tier Tribunal.

Transfer of Regulation to the FCA

On 1 April 2019, regulation of claims management companies was transferred to the Financial Conduct Authority. Claims management companies previously regulated by the Claims Management Services Regulator, and that wished to continue trading, had to register for temporary permission by 31 March 2019.[22]

References

  1. ^ Compensation Act 2006, s.4(2)
  2. ^ Robert Watts (11 June 2003). "This disaster was no Accident". The Daily Telegraph. Archived from the original on 4 August 2003. Retrieved 21 March 2008.
  3. ^ Better Regulation Task Force (2004) pp. 11-17
  4. ^ Department for Constitutional Affairs (2004)
  5. ^ Office of Public Sector Information (2006)
  6. ^ Compensation (Regulated Claims Management Services) Order 2006, SI 2006/3319
  7. ^ Compensation (Specification of Benefits) Order 2006, SI 2006/3321
  8. ^ Compensation Act 2006, s.4(1)
  9. ^ Compensation Act 2006 (Commencement No. 3) Order 2007, SI 2007/922
  10. ^ Compensation Act 2006, s.7
  11. ^ Compensation Act 2006, s.11
  12. ^ Claims Management Companies Q&A, [1]
  13. ^ a b Compensation (Exemptions) Order 2007, SI 2007/209
  14. ^ Compensation (Exemptions) (Amendment) (No.1) Order 2007, SI 2007/1090
  15. ^ "Compensation Act 2006". Legislation.gov.uk. Retrieved 2 March 2014.
  16. ^ Compensation Act 2006, s.11
  17. ^ SI 2006/3322
  18. ^ Compensation Act 2006, s.8
  19. ^ Compensation Act 2006, s.10
  20. ^ a b Compensation Act 2006, s.13
  21. ^ Gibb, F. (8 November 2007). "Who will police the lawyers now? Only a non-lawyer need apply ..." The Times. London. Retrieved 4 March 2008.
  22. ^ "Claims management companies: Our regulation". 5 December 2018.

Bibliography

External links

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