Claims Management services

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Personal Injury law resources

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Claims Management regulation

The regulatory regime is being established under the Compensation Act 2006. Part 1 of the Act deals specifically with the issue of negligence and damages in respect of mesothelioma, and is not directly relevant to the regulation of claims management services.

Part 2 of the Act covers claims management services. The main features of this are –

• A person may not provide claims management services unless he is authorised or exempt.
• The Secretary of State may designate a person to be regulator, may establish a regulator or may be the regulator himself.
• The Regulator has powers to enforce the legislation.
• A Claims Management Services Tribunal will be established to hear appeals in respect of decisions by the Regulator on authorisation.

The detail is covered in regulations.

The Compensation (Claims Management Services) Regulations 2006 cover –

• Arrangements for waiving the requirement for authorisation.
• Arrangements in respect of grant of authorisation.
• Arrangements for setting fees.
• Provision for the Regulator to require authorised persons to have professional indemnity insurance.
• Provision for the Regulator to make rules for the professional conduct of authorised persons.
• Arrangements for complaints handling.
• Provision for the Regulator to audit or investigate businesses.

These have been published in draft form, but have not formally been made.

The Compensation (Regulated Claims Management Services) Order 2006 (the “scope order”) covers the services and kinds of claim that are covered. Broadly speaking, a wide range of services is covered including seeking out potential claimants, advising claimants, making representations and carrying out investigations. The sectors that will be covered initially are –

• Personal injury, including work-related injury, disease or disability.
• Criminal injuries compensation.
• Employment matters.
• Housing disrepair.
• Financial products and services.
• Industrial injury disablement benefits.

The Compensation (Exemptions) Order 2007 sets out the activities and businesses that are exempt from the requirement to seek authorisation. These include –

• Insurance companies, brokers and IFAs in respect of business that is regulated under the Financial Services and Markets Act.
• Solicitors, barristers and legal executives.
• Independent trade unions dealing with their members, subject to compliance with a code of practice.
• Charities and advice agencies.
• Small scale introducers where this is incidental to their main business, and the person to whom they introduce business takes responsibility for their activities.

The Compensation (Specification of Benefits) Order 2006 provides that claim for any of the following benefits shall be treated as a claim for the purposes of Part 2 of the Compensation Act 2006: -

Industrial injuries benefit, within the meaning given by section 94 of the Social Security Contributions and Benefits Act 1992[2];

• Any supplement or additional allowance, or increase of benefit or allowance, to which a recipient of such a benefit may be entitled under that or any other Act;
• A benefit under a scheme referred to in paragraph 2 or 4 of Schedule 8 to that Act;
• A benefit under the Pneumoconiosis etc. (Workers' Compensation) Act 1979[3].

An Explanatory Memorandum provides guidance to the: -

• The Compensation (Regulated Claims Management Services) Order 2006
• The Compensation (Specification of Benefits) Order 2006
• The Compensation (Claims Management Services) Regulations 2006

The Claims Management Services Tribunal Rules 2007 set out arrangements for dealing with appeals against decisions of the Regulator.

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