Claims Management Regulation
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Management Regulation – ‘Consent’ and ‘Due Diligence’
The current regulator for call centres offering a service for consumers to claim compensation for PPI, mis-selling of financial products, and other issues such as housing disrepair and holiday claims, is the CMRU (The Claims Management Regulation Unit), which is a unit of the Ministry of Justice.
Claims Management Regulation Cases at St Pauls Chambers
It is often unclear when consent is necessary as a matter of law, so it is the view of St Pauls Chambers that this is to be a fertile ground for litigation as the new law begins to bite.
Jeremy Barnett has represented a number of companies who have faced allegations of misconduct and breaches of the Conduct of Authorised Persons Rules. In many cases, fines approaching £1m have been levied, but these have often been substantially reduced following the issue of detailed representations and appeals before the First Tier Tribunal.
Many investigations that St Pauls Chambers have dealt with in this area involve detailed allegations of breaches of the rules relating to the Telephone Preference Service (TPS), breaches of the SRA Code of Conduct (as many firms work closely with solicitors who specialise in personal injury work), in particular the ban on Referral Fees, breaches of the Privacy and Electronic Communications Directive, and alleged breaches of the Data Protection Act, which are also subject to scrutiny by the ICO.
With our experience and expertise, the team at St Pauls Chambers are well equipped to advice and represent on any claims management cases.
New Claims Management Regulations
Although the CMRU claimed great success in a number of high profile cases, in August 2017 it was announced that the function is to be moved from the MOJ to the Financial Conduct Authority, who promised a new ‘proper and tough’ CMC regulatory regime in due course. This change is intended to implement the findings of the 2017 Brady Review, aimed at clamping down on perceived malpractice in the CMC industry. The new proposals fall short of introducing a ban on cold-calling and cold-texting.
Issue of Consent in Claims Management Regulation
An important issue that often arises is the issue of Consent. Many CMCs purchase lists of callers who have opted in to receiving calls from brokers, who in turn purchase these names from other brokers. It is therefore often difficult for a CMC who faces an audit inspection to demonstrate that they have received the consent of the consumer to be contacted, as that consent was recorded by others.
The issue of Consent has moved into focus with the new General Data Protection Regulation (GDPR). The Information Commissioner’s Office (ICO) defines consent as follows:
Consent means offering individuals real choice and control. Genuine consent should put individuals in charge, build customer trust and engagement, and enhance your reputation.
In March 2017, the ICO issued draft guidance on the new meaning of Consent, where it is attempting to establish the principle that consent requires evidence of a positive opt-in.
The difficulty is that Consent is not an absolute definable concept. People can give their consent to being contacted in relation to general matters, but dispute can arise as to the extent of that consent; was it informed, has it been withdrawn or amended, or was it limited in scope in any way? For example, only given to certain specified or named individuals or companies.
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