Martin Partington: Spotlight on the Justice System

Keeping the English Legal System under review

Regulation of Claims Management Companies: The Financial Guidance and Claims Bill 2017

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In March 2016, the Government announced that it planned to change the ways in which the regulation of Claims Management Companies is organised.

At present, this work is undertaken by a special unit within the Ministry of Justice. What is planned is that this work should be transferred to the Fincancial Conduct Authority – which has broad regulatory oversight of the financial services sector.

In the Financial Guidance and Claims Bill, which was published in June 2017, legislative proposals have been set out which – when the Bill is enacted – will achieve this objective. Clauses in the Bill will make amendments to the Financial Services and Market Act 2000 to enable the Financial Conduct Authority to regulate claims management company activity as a ‘regulated activity’ under the Act.

In addition, clauses in the Bill provide for the transfer of complaints-handling responsibility from the Legal Ombudsman to the Financial Ombudsman Service. This will allow the Financial Ombudsman Service to take over jurisdiction to investigate and determine consumer complaints about the service provided by the claims management companies.

The Financial Conduct Authority will also be given power to impose a cap on the fees that claims management companies can charge for their services.

These seem to me sensible reforms which should offer better protection to consumers who use Claims Management Companies and to protect companies against malpractice by those companies.

The Bill has started its progress through Parliament. I anticipated the measures will be enacted sometime in 2018, with implementation shortly thereafter.

The Bill can be viewed at https://publications.parliament.uk/pa/bills/lbill/2017-2019/0001/18001en03.htm

Recent annual reports on the work of the Claims Management Regulator can be found at https://www.gov.uk/government/collections/claims-management-regulator-annual-reports

 

 

 

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Written by lwtmp

August 26, 2017 at 11:07 am

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