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MOJ Investigates Claims Management Firms

Jeremy has been instructed to advise a Claims Management firm being investigated by the Ministry of Justice.

Jeremy has been instructed to advise a Claims Management firm being investigated by the Ministry of Justice in respect of alleged breaches of the Compensation (Claims Management Services) Regulations 2006  and the Conduct of Authorised Persons Rules 2013(2). Jeremy is instructed by Michael Shroot of Woodcocks Solicitors.

New rules, with which all businesses authorised to provide regulated claims management services must comply, came into force on 1 April 2013. The Conduct of Authorised Persons Rules 2013 replace the Conduct of Authorised Persons Rules 2007.

The Rules are made by the Claims Management Regulator, who is responsible for regulating businesses that handle certain types of claims for compensation in relation to personal injury, financial products/services (such as mis-sold payment protection insurance), employment matters, criminal injuries, industrial injuries disablement benefit and housing disrepair. They are set out in two parts:

  • general rules - general principles for the conduct of the business and its compliance with applicable laws and regulations

  • New rules, with which all businesses authorised to provide regulated claims management services must comply, came into force on 1 April 2013. The Conduct of Authorised Persons Rules 2013 replace the Conduct of Authorised Persons Rules 2007.

The Rules are made by the Claims Management Regulator, who is responsible for regulating businesses that handle certain types of claims for compensation in relation to personal injury, financial products/services (such as mis-sold payment protection insurance), employment matters, criminal injuries, industrial injuries disablement benefit and housing disrepair. They are set out in two parts:general rules—general principles for the conduct of the business and its compliance with applicable laws and regulations

client specific rules—including requirements in relation to advertising, marketing and soliciting business; taking on business;
and representing a client

Principles

1. A business shall conduct itself with honesty and integrity.

2. A business shall conduct itself responsibly.

3. A business shall be directed by people with the necessary competence.

4. A business shall ensure that any staff or other people working on its behalf have the necessary training and competence to
perform their duties.

5. A business shall observe all laws and regulations relevant to its business. 

1. A business shall

a) Act fairly and reasonably in dealings with all clients

b) Ensure that any service offered is one that meets the needs of the client and satisfies the requirements of these Rules.

c) Ensure that all information given to the client is clear, transparent, fair and not misleading.

d) Avoid conflicts of interest.

e) Where advice is given, advise the client unambiguously of ombudsman schemes or other official means of obtaining redress.

f) Where advice is given, advise the client to pursue cases only if it is in the interests of the client to do so.

g) Preserve the confidentiality of the claimant unless disclosure is required or permitted by law or by the claimant. 


"Some personal injury firms are ‘in a state of panic’ over a government review of their dealings with claims management companies (CMCs), according to compliance experts.

The Ministry of Justice’s claims management regulator has ordered around 150 CMCs to provide detailed information on their finances and relationships with law firms. The order has been interpreted as reflecting concern at senior levels that the ban on referral fees, which came into force in April, is being flouted."

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