DCA Publishes New Claims Management Regulations

by Robin Pilgrim, LawAndTax-News.com, London

05 December 2006

Tougher regulation of claims management companies in the UK came a step closer last week, as the Department for Constitutional Affairs published new rules that will apply to persons authorised to provide claims management services under the Compensation Act 2006.

This follows the publication the previous week of the secondary legislation needed to deliver regulation.

DCA Minister, Baroness Ashton explained that:

"It was important that we moved quickly following the passage of the Compensation Act to bring in regulation and tackle malpractice across the claims industry and bring in better safeguards for consumers. We have now delivered the secondary legislation, the conduct rules and the main regulatory infrastructure necessary to achieve this."

"I am grateful to those who responded to the consultation exercises conducted over the summer. There remains significant and widespread support for introducing regulation and our proposals to doing so, in particular how we should assess applicant's suitability to be authorised, proposals for complaints handling, conduct rules and enforcement measures."

The Compensation Act 2006 gained Royal Assent on 25 July 2006. It provides for the regulation of businesses and individuals that provide claims management services and creates the outline regulatory framework to authorise providers who would be required to comply with regulatory rules.

It also includes power for the regulator to investigate unauthorised activities and to prosecute those who try to evade regulation.

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