regulation of claims management companies and
individuals under the Compensation Act
2006
The Compensation Act 2006 introduces welcome new provisions for
the regulation of claims management services in respect of personal
injury, industrial injury disablement benefits and criminal
injuries compensation to name but a few. Key parts of the Act in
this area came into force at the beginning of December but it is
yet to come fully into effect.
The Act is intended to deal with concerns over increasing
numbers of “claims farmers”. It covers many businesses and
individuals providing claims management services who will soon find
themselves bound by new regulations. They will be subject to a new
regulatory framework under which providers should be authorised.
The Act’s teeth in this respect lie in the new powers given to the
Regulator (The Secretary of State for Constitutional Affairs) to
investigate and ultimately prosecute unauthorised activities and
providers.
Claims management service providers in regulated areas must
apply to be authorised to provide their services. If they fail to,
they risk potential fines or even imprisonment. A relatively small
proportion of providers will be exempt.
Providers should apply for authorisation before February 2007.
From April 2007, it is envisaged that regulation will come into
effect together with the offence of operating without a
licence.
Of the new Act, Mark Boleat, the first Head of Claims Management
Regulation said:
“The Compensation Act 2006 provides a sensible and proportionate
regulatory structure” and “I aim to bring an end to aggressive
marketeering, particularly approaches in persons on the street
encouraging the making of claims. Regulation will clean up the
market and remove the rogue traders”.
For further information please contact Alison McClure in the Personal
Injury team on 023 8085 7345 or email alison.mcclure@bllaw.co.uk
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