Compensation Act 2006

7/29/2019 Compensation Act 2006

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Consultation

Part 2 of the Compensation Act 2006

Exempt ions fr om t heRequirement for Aut hor isat i on

Response of Browne Jacobson LLP12 October 2006


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Contents

Introduction ............. ............. ............. .............. ............. ............. ........ 2

Br ow n e Jac ob so n LLP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2In t er est i n t h e Co nsu lt a t i on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Th e Re sp on se . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Summary ............. ............. ............. ............. .............. ............. ............ 4

Response to Consultation Questions .... .... ..... .... ..... .... .... ..... .... ..... .... .... ..... 5

Quest ion 1 Lega l Pro fessionals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Quest ion 2 Those Regulat ed under t he Financial Servi ces and Market s Act 2000 .. 5Th ir d Par t y Cap t u re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Quest ion 3 Char i t ies and Not f or Pro f i t Organisat ions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Quest ion 4 T rade Un ions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Quest ion 5 Spec i f i c Exempt ions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Mot o r In su re rs Bu re au . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7The Medical Prot ect ion Society and The Independent Complaints Reviewer . . . . . 8

Quest ion 6 Othe r Exempt ions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Those not providing cla ims management services in respect of i ndiv iduals. . . . . . . 8Claims Management Services in respect of Counterclaims, Part 20 claims andCo nt r i b ut i o n Pr oc ee di ngs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Ex pe rt Wi t n esse s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Appendices

Appendix 1 - Part 2 of t he Compensati on Act 2006

Appendix 2 Consult at ion in r espect of Exempt ions (CP(L)22/ 06)

Appendix 3 Draft Compensation (Exemptions) Order 2006

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Introduction

Browne Jacobson LLP

Browne Jacobson is a leading f irm of solicitors in the Midlands, having off ices in

Nott ingham, Birmingham and London. Among its cl ients the f irm counts a number ofnational insurers, the Motor Insurers Bureau and the NHSLA. The f irm deals with asubstantial volume of l i t igation on behalf of these cl ients in al l areas, includingpersonal injury and employment claims.

Contact det ails: James Arrowsmit hVict ori a Square HouseVictoria SquareBirminghamB2 4BU

Tel: 0121 237 3981

Email: j ar row smit h@brow nej acob son. co m

Interest in the Consultation

The activit ies of Browne Jacobson and many of i ts cl ients have the potential to fal lwithin the ambit of Part 2 of the Compensation Act 2006 and associated secondarylegis lat ion. I t is the Order to which th is consul tat ion relates which wi l l prevent, forexample, solicitors and insurers from requiring authorisation in order to carry out theirday to day activit ies.

Other of Browne Jacobson's cl ients also have the potential to be affected by thislegislat ion and we m ake submissions in r espect of t heir posit i on below.

Browne Jacobson submitted a response to the Department of Constitutional Affairs'previ ous consult at ion CP(L)12/ 06 in respect of t he Scope Order, Regulat ions and Rules.That r esponse may be f ound at:h t t p : / / www .brownejacobson.com/ l ib rary/ documents / Compensat ion Bi l l Consu l ta t ionre sponse FINAL.p df

The Response

This response is based upon the experiences of lawyers at Browne Jacobson and uponfeedback f rom a number of t he f i rm 's c l ients.

Within the response, the fol lowing references wil l be used:

The Act wil l r efer t o t he Compensat ion Act 2006The Exemptions Order t o t he draft Compensati on (Exempt ions) Order 2006The Scope Order to the proposed Compensation (Regulated Claims ManagementServices) Order 2006The Regulations t o t he pr oposed Compensat ion (Claim s Management Servi ces)Regulations 2006The Rules wi ll r efer t o the pr oposed Conduct Rules for author ised persons

The Regime wil l refer t o the al l of the above, t aken toget her

2
mailto:[email protected]://www.brownejacobson.com/library/documents/Compensation%20Bill%20Consultation%20response%20FINAL.pdfhttp://www.brownejacobson.com/library/documents/Compensation%20Bill%20Consultation%20response%20FINAL.pdfhttp://www.brownejacobson.com/library/documents/Compensation%20Bill%20Consultation%20response%20FINAL.pdfhttp://www.brownejacobson.com/library/documents/Compensation%20Bill%20Consultation%20response%20FINAL.pdfmailto:[email protected]


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Copies of t he consult ati on to w hich t his response relat es t oget her wi t h t he Act andexemptions order wil l be found as appendices to this document. The other documentsl isted above are available on the Depart ment of Const it ut ional Affair s' website or asappendi ces t o Brow ne Jacobson's earl ier consult at ion r esponse which can b e accessedthrough the l ink above.

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Summary

We understand the object ive of the regime to be the protect ion of vulnerableconsumers of claims management services, wit hout t he imposit i on of disproport ionat eburdens upon providers. We support the approach of init ial ly targeting the areas ofgreatest concern, which has been adopted in respect of the scope order. This is a newregulatory regime and i t is important that the net is not cast so broadly at the outsett hat areas where t here is l i t t le need of regulat ion are caught.

The definit ion of claims management services within the Act and scope order is anextremely br oad one and i t is t he exempt ions order which wi l l l imi t t he regime's ambitt o t he appropr iate f ie lds. Broad exemptions are t herefore required.

In addi t ion to our comments below in respect of the detai l of the draf t order, wepropose the fol lowing exemptions:

Providers of claims management services in respect of claims where the

claimant or potent ia l c la imant is not an indiv idual

Providers of cl aims management services in respect of count erclaim s and claimst o a contr ibut ion or indemnit y under Part 20 of t he CPR.

Insurers engaged in t hird part y captur e

Expert witnesses when they provide input to strategic and procedural decisionst aken by t he part ies t o a c la im

The MIB

We also make submissions regarding the appropriate mechanisms for monitoring the'condit ional exempt ion' in respect of i ndependent t rade unions set out at paragraph 7 oft he draf t exemptions order

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Response to Consul tation Quest ions

Question 1 Legal Professionals

We agree that legal practitioners should be subject to an exemption.

We consider that references in paragraphs 4(1)(a) and (b) to "in a way permitted bythe professional rules to which he is subject" should be removed.

We propose the removal of the above words as we believe that they blur theboundaries of t he regime. They suggest t hat legal prof essionals not abiding by rel evantprofessional rules may become subject to the regime. If legal practit ioners are notacting in accordance with professional rules then their own regulators ought to berel ied upon to intervene. This wi l l be ensured by the regulatory bodies l ikely to beest abli shed as a result of t he Legal Servi ces Bil l.

Quest ion 2 Those Regulated under the Financial Services and Market sAct 2000

We agree t hat t hose regulated by t he FSMA ought to be subj ect to an exempt ion t othis regime. We consider the current draft of paragraph 4 to be suitable for thispurpose.

Third Party Capture

We repeat the submission in our response to Consultation CP(L)12/06 that "thirdpart y capture" ought also to be subject t o an exempt ion.

We believe that this should extend to third party capture by any potentialdefendant.

We note that responses to the previous consultation wil l be taken into account indealing with this issue. In our response to that consultation, we emphasised twoarguments against the requirement of authorisation in order for insurers and similardefendants to engage in th ird part capture. We should l ike to take th is opportuni ty tobuild upon t hese and to add some fur t her point s more specif ic t o thi s consult ati on.

As we have previously indicated there appears to be l i t t le evidence to suggest thatpotential defendants do not act responsibly when engaging in third party captureactivit ies. We understand that at this stage the regime is intended to focus upon theareas in which consumer protection is most required. We do not believe this to be oneof them.

Further, we bel ieve that t he pot ent ia l defendant and potent i a l c la imant s int erest s areoft en c losely al igned when t hird part y capture t akes place. The aim of t he defendant isto ensure rapid and effective intervention, often through early medical assessment andrehabil i t at i on. This benefit s t he defendant as cost s of l egal pr oceedings can be avoidedand, i f a claim is made, i t wil l reduce damages for suffering, incapacity and loss of the

claimant. Where defendants or, in the case of insurers, their cl ients have an ongoingrelat ionship with the potent ia l c la imant then ear ly intervent ion wi l l assist in

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maintaining th is. Of course, ear ly intervent ion, rehabi l i tat ion and the preservat ion ofexist ing relat ionships are also advant ageous t o t he potent ial claim ant.

Defendant s seeking to expl ore t his approach are making st renuous eff ort s at present t oencourage its acceptance by claimants and their representatives. Again, this is anincent ive t o t hem t o act responsibly in pursuing th ird party capt ure.

We see third party capture as an approach to l i t igation which is very much in l ine withthe object ive of deal ing with c la ims ef fect ively and proport ionately and therefore inl ine with the objectives of the Civi l Procedure Rules. It is, however, an emerging f ieldand one which is being pioneered by a few defendants, in part icular insurers. Arequirement of author isat ion in order to undertake such act iv i t ies may hamperdevelopment in t h is area, t o t he detr im ent of c la imants and defendant s.

In the c ircumst ances, we submit t hat t he cr i t er ia for exempt ion set out at paragraphs 7and 10 of t he consul t at ion document are met :

Many defendants engaging in third party capture wil l already be subject to

regulati on, f or example t hrough the FSA. In respect of other defendants, the requirement for author isat ion in order to

enter into this developing area would be unduly burdensome and would hamperdevelopment of t he rehabi l i t at ive approach t o c la ims management.

There is no evidence of poor practice in this area and, given the alignment ofc la imant and defendant interests, there is l imi ted r isk of poor pract icedeveloping.

The interests of the consumer of legal services wil l therefore be best served bypermit t ing an exemption in respect of t h i rd party capture by al l defendants

Quest ion 3 Chari t ies and Not for Prof it Organisati ons

We agree that paragraph 7 offers an appropriate definition of not for profit bodies,wit hout allowing the exempt ion to be abused.

We would suggest that a separate paragraph might allow an exemption forregistered chari t ies.

While paragraph 7 is l ikely to cover registered charit ies, i t necessari ly sets out arelatively complicated test based upon a number of factors. A separate exemption byreference to a charitys registration with the Charit ies Commission wil l more clearlyest ablish their posit ion. We consider t hat t his would be valuable in ensuring that

char i t ies do not f ind themselves subject to i l l founded complaints etc under theregime.

Question 4 Trade Unions

We consider the definitions used in paragraph 9 to be appropriate.

We are concerned at the exemption of trade unions from the requirement forauthorisation. We recognise the value of an effective code of practice and wouldsuggest that t he following scheme might be adopted:

An initial exemption as set out in paragraph 7, made subject to compliancewit h a code of practi ce.

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A code of practice be set out which is generally consistent with the Rulespromulgated by the regulator. Alternatively, a code of practice might referdirectly t o the rules.

Retention of the regulators powers under Part 7 and 8 of the regulations inrespect of independent unions in order to ensure compliance with the codeof practice is maintained. We anticipate that the code itself might set outthe precise monitor ing regime to be followed.

A specific mechanism by which the exemption may cease to apply to a tradeunions. We would suggest that the regulator should be able to recommendwithdrawal of the exemption to the Secretary of State who may then do soby Order.

We recognise that the majority of trade unions provide valuable services to theirmembers and act in a responsible fashion. However, there is no regulator with controlof their claims management services and there is evidence of malpractice by a fewtrade unions. Perhaps the most notable recent case is that of the Union of DemocraticMinewor kers (UDM). We t herefor e wel come t he inclusion of a condit ion in t his

exemption

The UDM case demonstrates that malpractice may only be uncovered after a number ofyears. We therefore consider that a system of monitoring should be introduced. Weconsider that the regulator under this regime should also monitor unions in order toensure consistency.

We would suggest that the precise monitoring regime might be set out in the code ofpract ice. However, we consider that for the purpose of the scheme being ef fect ive i tshould be made clear that the exemption under paragraph 7 does not extend to theinvest igative power s granted t o t he regulator under Part s 8 and 9 of t he regulations.

To ensure consistency, we would propose that the rules to which unions are subjectedunder the code of practice should generally correspond with those issued by theregulator.

We ant i c ipate t hat t he most appropr iate means of r evoking the exemption in r espect ofa part icular union wi l l be t hrough a fur t her Order of t he Secretary of St ate. However,we would suggest that this be set out specif ically within the exemptions order, and thatt he regulator should be able to recom mend t hat such orders be made.

We consider that the above regime allows for appropriate consumer protection withoutimposing upon unions t he burden of a requirem ent f or authori sati on.

Quest ion 5 Specif ic Exempt ions

Motor Insurers Bureau

We consider that t he Motor Insurers Bureau (MIB) ought to be subj ect to a specif icexemption.

We understand that MIB have already made submissions outlining the measures theyt ake t o ensure high service standards in exercising claims management funct ions. They

seek to comply with FSA standards, notwithstanding they are not required to be FSAauthorised under the Financial Services and Markets Act 2000. We consider MIBs

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standards to be high and are conscious that MIB seek to maintain a position as a centreof excellence in claims handling. We consider that they offer a standard of servicewhich may well exceed that of many authorised persons upon this regime coming intoe f fec t .

In addi t ion to their sel f regulat ion, MIB are subject to the Agreements with the

Secretary of State for Transport under which they operate and to the scrut iny of theDepartment for Transport. MIBs insurer members also monitor standards, includingt hrough regular audi t , and general ly expect t hese t o be at least equal t o t heir own. Ofcourse, MIB's mem bers are subj ect t o FSA regulat ion.

MIB also has a clear policy of transparency. They use their website in part icular as ameans of making their policies, accounts and annual reports publicly available whichpermit s for publ ic scrut iny of t heir act iv i t ies.

We therefore submit that that MIB are subject to adequate control wi thout theaddit ional requirement of author isat ion and that there is no consumer protect ion

relat ed need to requi re t hat MIB be authori sed.

The Medical Protection Societ y and The Independent Complaint s Reviewer

We have no submission t o make in r espect of the proposals to exempt these bodies.

Quest ion 6 Other Exempt ions

Those not providing claims management services in respect of individuals.

We propose an exemption in the following terms:

Sect ion 4(1) of t he Act does not prevent t he provision of a r egulat ed clai msmanagement servi ce where that servi ce is provided in r espect of a claim orpotenti al claim in which t he claimant is not an indivi dual.

As indicated in the introduct ion to the consul tat ion document the aim of the regime isconsumer protection. A wide definit ion of claims management services has beenestablished and exemptions are now required in order to narrow the application of theregime to those it is intended to protect. We endorse the approach taken in the scopeorder of f ocussing upon t he most problem ati c areas at t he outset .

We understand the pr imary aim of the regime to be the protect ion of members of thegeneral public against unscrupulous claims management businesses. However, manypersons who provide claims management services work solely with businesses; forexample, loss adjusters and others offering general advisory services to businesses. Weare not aware of any evidence that shows a signif icant need for addit ional protection int his area.

The imposit ion of a requirement for authorisation in this f ield appears l ikely to increasethe costs to many businesses of obtaining advice. It wil l also hinder competit ion amongthose providing such advice. In part icular, the burden of authorisation wil l have a muchmore detr imental ef fect upon smal l providers than larger ones. We submit that thesedisadvantages are not l ikely to be offset by any signif icant improvement in consumer

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protection through a requirement for authorisation of those providing services in thisarea.

In the circumstances, we propose an exemption and we consider that the draft aboveought t o be secure against abuse by comm ercial cl aims management companies who dotarget indiv iduals. In part icular , the focus of the test upon the status of the c la imant

wil l prevent service providers acting through intermediaries in order to avoid the needfor author isat ion.

Claims Management Services in respect of Counterclaims, Part 20 claims andContribution Proceedings.

We propose the following exemption:

Sect ion 4(1) of t he Act does not prevent t he provision of a r egulat ed clai msmanagement servi ce in respect of :

a) Count erclaimsb) Claims f or a contr ibut ionc) Clai ms f or an indemnit y

Brought in accordance wit h Par t 20 of t he Civi l Procedure Rules

The Act provides a definit ion of 'claims management services' which excludes servicespurely connected with the defence of a c la im. We consider th is appropr iate.Defendants are far less l ikely than potential claimants to be subject to inappropriatepractices by service providers. In part icular, when a claim arises a defendant has thebenef i t of being fr ee to select a legal service provider wi t hout undue inf luence.

However, i t is appropriate for service providers acting on behalf of defendants to

advise in respect of a defendant's abil i ty to bring a counterclaim or to claim for acont r ibut ion or indemnity. Such advice appears t o have t he potent i a l t o fa l l w i t h in t heambit of t he regime.

We submit that the giving of such advice does not introduce any addit ional r isk to aconsumer. Indeed, i t wil l be in a consumer's interests that his adviser has noreservations in giving advice. We therefore consider that an addit ional exemption isrequir ed t o cover these circumst ances.

Expert Witnesses

We propose an exemption in the following terms:Sect ion 4(1) of t he Act does not prevent t he provision of a r egulat ed clai msmanagement servi ce where that servi ce is provided by an expert wit ness in t heproceedings t o which those servi ces relat e and ei t her :

a) The wi t ness is regulat ed as a member of :i ) The General Medical Council ; orii ) The Nursing and Midwif ery Council ; ori i i ) The General Social Care Council ; oriv) The inst i t ute of Chart ered Accountants; orv) The Royal Inst it ut ion of Chart ered Surveyors; or

vi ) The Engineer ing Council of t he UK; orvi i) Any other body speci f ied by t he regulat or

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or

b) The wit ness provides clai ms management servi ces solely wi t hin t he ambitof his field of expert ise in the lit igat ion.

We note the exclusion of those giving or preparing to give evidence from the regime byvirtue of paragraph 4(3)(b) of the Act. However, expert witnesses are often involved inaspects of the claim other than simply preparing and giving evidence. For example,they wi l l of ten advise part ies upon fur ther invest igat ions, the procurement of otherexpert evidence and the appropr iate t imet able for a c la im. They can theref ore becomeheavily involved in the management of a claim and this would appear to place themwithin the regime.

We do not consider that experts carrying out this role ought to require authorisation.Their role relates to case management and so has l imited impact upon a claimant. Wedo not believe that there is a need for authorisation in order to ensure consumer

protect ion.

We bel ieve t hat a r equirement f or author isat ion w ould be unduly burdensome t o manyexperts and would discourage them for providing advice which is often valuable inprogressing a claim in t he most expedit ious manner possible. In the circumstances, w epropose an exempt ion.

Many experts, in part icular in medical f ie lds, wi l l a l ready be subject to their ownregulators and we w ould suggest t hat t hese expert s may be autom ati cally excluded. Wehave identif ied regulators in the most signif icant f ields in the draft above. Of course,this may be subject to expansion. We have also proposed provision for the regulator toadd to the l ist as appropriate.

Some experts wil l not be subject to professional bodies. In respect of these, wepropose a general exemption which allows for the provision of advice l imited to theexperts f ield of expertise in the claim. We consider that this is broad enough to al lowfor the expert s knowledge to be drawn upon without opening up a potent ia l loopholein t he regime.

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Appendix 1

Part 2 of the Compensat ion Act 2006


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Compensation Act 20062006 Chapter 29 cont inued

4 Provision of regulated claims management servi ces

(1) A person may not provide regulated claims management services unless:

(a) he is an authorised person,(b) he is an exempt person, (c) the requirement for authorisation has been waived in relation to him inaccordance with regulations under section 9, or(d) he is an individual acting otherwise than in the course of a business.

(2) In this Part:

(a) "authorised person" means a person authorised by the Regulator undersection 5(1)(a),(b) "claims management services" means advice or ot her services in relat ionto the making of a claim, (c) "claim" means a claim for compensation, rest it ution, repayment or anyother remedy or relief in respect of loss or damage or in respect of anobligat ion, whether t he claim is made or could be made:

(i) by way of legal proceedings, (ii )in accordance wit h a scheme of regulat ion (whether voluntary orcompulsory), or

(i ii ) i n pursuance of a voluntary undertaking,(d) "exempt person" has the meaning given by section 6(5), and(e) services are regulated if they are:

(i) of a kind prescribed by order of the Secretary of State, or(ii)provided in cases or circumstances of a kind prescribed by order ofthe Secretary of State.

(3) For the purposes of this section:

(a) a reference to the provision of services includes, in part icular, areference to:

(i) the provision of financial services or assistance, (ii) the provision of services by way of or in relation to legalrepresentation,(iii) referring or introducing one person to another, and(iv) making inquiries, and

(b) a person does not provide claims management services by reason only ofgiving, or preparing to give, evidence (whether or not expert evidence).


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(4) For t he purposes of subsection (1)(d) an individual acts in t he course of abusiness if, in part icular:

(a) he acts in the course of an employment, or(b) he otherwise receives or hopes to receive money or money's wort h as aresult of his action.

(5) The Secretary of State may by order provide that a claim for a specifiedbenefit shall be treated as a claim for the purposes of this Part.

(6) The Secretary of State may specify a benefi t under subsecti on (5) only if itappears to him t o be a Unit ed Kingdom social securi ty benefi t designed toprovide compensat ion for indust ri al injury.

5 The Regulator

(1) The Secretary of State may by order designate a person ("the Regulator"):

(a) to authorise persons to provide regulated claims management services, (b) to regulate the conduct of authorised persons, and(c) to exercise such other functions as are conferred on the Regulator by orunder this Part.

(2) The Secretary of State may designate a person only if satisfied that theperson:

(a) is competent to perform the functions of the Regulator,

(b) will make arrangements to avoid any conflict of interest between theperson's funct ions as Regulator and any other f unctions, and(c) will promote the interests of persons using regulated claims managementservices (including, in particular, by:

(i) setting and monitoring standards of competence and professionalconduct for persons providing regulated claims management services,

(ii) promoting good practice by persons providing regulated claimsmanagement services, in part icular in relat ion to the provision ofinformation about charges and other matters to persons using or

considering using the services, (ii i) promot ing pract ices likely t o facilit ate compet it ion betweendifferent providers of regulated claims management services, and(iv) ensuring that arrangements are made for the protect ion ofpersons using regulated claims management services (includingarrangements for the handling of complaints about the conduct ofauthorised persons)).

(3) If the Secretary of State t hinks that no exist ing person (whether an individual


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or a body corporate or unincorporate) is suitable for designation undersubsection (1), he may by order establish a person for the purpose of beingdesignated.

(4) The Regulator shall:

(a) comply wit h any directions given to him by t he Secretary of State; (b) have regard t o any guidance given to him by the Secretary of State; (c) have regard to any code of practi ce issued to him by the Secretary of

State;(d) t ry t o meet any targets set for him by the Secretary of State; (e) provide the Secretary of State wi th any report or informat ion requested

(but this paragraph does not require or permit disclosure of informat ionin contravention of any other enactment).

(5) The Secretary of State shall lay before Parliament any code of pr act ice issuedby him to the Regulator.

(6) The Secretary of State may pay grants to the Regulator (which may be onterms or condit ions, including terms and condit ions as to repayment wit h orwithout interest).

(7) A reference in this Part to the Regulator includes a reference to a personacti ng on behalf of t he Regulator or wi th his authorit y.

(8) The Secretary of State may by order revoke a person's designat ion undersubsection (1).

(9) While no person is designated under subsection (1) the Secretary of Stateshall exercise functions of the Regulator.

(10) The Secretary of State may by order t ransfer (whether for a period of t imespecif ied in t he order or otherwise) a funct ion of t he Regulator to the Secretaryof State.

6 Exemptions

(1) The Secretary of State may by order provide that section 4(1) shall notprevent the provision of regulated claims management servi ces by a person whois a member of a specif ied body.

(2) The Secretary of State may by order provide that section 4(1) shall notprevent the provision of regulated claims management services:

(a) by a specified person or class of person, (b) in specif ied circumstances, or(c) by a specif ied person or class of person in specif ied circumstances.


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(3) Provision by virtue of subsection (1) or (2) may be expressed to have effectsubject to compliance with specif ied condit ions.

(4) Section 4(1) shall not prevent the provision of regulated claims managementservices by a person who is established or appointed by virtue of an enactment.

(5) For the purposes of this Part a person is "exempt" if, or in so far as, section4(1) does not, by virt ue of this section, prevent him f rom providing regulatedclaims management services.

7 Enforcement: offence

(1) A person commits an offence if he contr avenes secti on 4(1).

(2) A person who is guil ty of an offence under subsection (1) shall be l iable:

(a) on conviction on indictment:

(i) to imprisonment for a term not exceeding two years, (ii) t o a fine, or(iii) t o both, or

(b) on summary conviction:

(i) t o imprisonment for a term not exceeding 51 weeks, (i i) to a fine not exceeding level 5 on the standard scale, or(iii) t o both.

(3) Until the commencement of section 281(4) and (5) of the Criminal JusticeAct 2003 (c. 44) (51 week maximum term of sentences) t he reference insubsection (3)(b)(i) above to 51 weeks shall have effect as if it were a referenceto six months.

8 Enforcement: the Regulator

(1) The Regulator may apply t o the court for an inj unction rest raining a personfrom providing regulated claims management services if he is not:

(a) an authorised person, (b) an exempt person, or(c) t he subject of a waiver in accordance wit h regulat ions under section 9.

(2) In subsection (1) "the court" means the High Court or a county court.

(3) The Regulator may:

(a) invest igate whether an offence has been commit ted under t his Part ; (b) inst it ute criminal proceedings in respect of an offence under t his Part .


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(4) For the purpose of investigating whether an offence has been committedunder this Part the Regulator may require t he provision of i nformat ion ordocuments.

(5) On an application by the Regulator a judge of the High Court, Circuit judge orj ustice of the peace may issue a warr ant author ising the Regulator to ent er andsearch premises on which a person conducts or i s alleged to conduct r egulatedclaims management business, for the purposes of investigating whether anoffence has been committed under this Part.

(6) The Regulator may take copies of written or electronic records found on asearch by vir tue of subsecti on (5) for a purpose specif ied in subsection (3)(a) or(b).

(7) In subsections (4) to (6) a reference to the Regulator includes a reference toa person authorised by him i n wr it ing.

(8) The Secretary of State shall make regulations:

(a) specif ying matt ers of which a judge or j ust ice of the peace must besatisfied, or to which he must have regard, before issuing a warrant undersubsection (5), and(b) regulating the exercise of a power under or by virtue of subsection (4) or(5) (whether by rest rict ing the circumstances in which a power may beexercised, by specif ying condit ions to be complied with in t he exercise of apower, or otherwise).

9 Regulations

(1) The Secret ary of State shall make regulat ions about:

(a) authorisations under section 5(1), (b) the functions of the Regulator.

(2) The Schedule specifies particular provision that may be made by theregulations.

(3) Transit ional provision of regulations under t his section may, in part icular,make provision about t he extent to which funct ions under this Part or under t heregulations may be exercised in respect of matters arising before thecommencement of a provision made by or by virtue of this Part.

10 Obstructing the Regulator

(1) A person commits an offence if without reasonable excuse he obstructs the

Regulator in the exercise of a power:


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(a) under section 8(4) to (6), or(b) by virt ue of paragraph 14 of the Schedule.

(2) A person who is guil ty of an offence under subsecti on (1) shall be liable on

summary conviction to a fine not exceeding level 5 on the standard scale.

11 Pretending to be authorised, &c.

(1) A person commits an offence if he falsely holds himself out as being:

(a) an authorised person, (b) an exempt person, or(c) t he subject of a waiver in accordance wit h regulat ions under section 9.

(2) A person commits an offence if:

(a) he offers to provide regulated claims management services, and(b) provision by him of those services would constitute an offence under thisPart.

(3) For t he purposes of subsection (2) a person offers to provide services if he:

(a) makes an offer to a particular person or class of person, (b) makes arrangements for an advertisement in which he offers to provide

services, or(c) makes arrangements for an advertisement in which he is described orpresented as competent to provide services.

(4) A person who is guilty of an offence under subsection (1) or (2) shall beliable:

(a) on conviction on indictment:

(i) to imprisonment for a term not exceeding two years, (ii) t o a fine, or(iii) t o both, or

(b) on summary conviction:

(i) t o imprisonment for a term not exceeding 51 weeks, (i i) to a fine not exceeding level 5 on the standard scale, or(iii) t o both.

(5) Where a person commits an offence under this section by causing material tobe displayed or made accessible, he shall be t reated as commit t ing the off enceon each day during any part of which the material is displayed or made

accessible.


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(6) Until the commencement of section 281(4) and (5) of the Criminal JusticeAct 2003 (c. 44) (51 week maximum term of sentences) t he reference insubsection (4)(b)(i) above to 51 weeks shall have effect as if it were a referenceto six months.

12 The Claims Management Services Tribunal

(1) There shall be a tribunal to be known as the Claims Management ServicesTribunal.

(2) The Tribunal shall be constituted as follows:

(a) members of the Financial Services and Markets Tribunal shall also bemembers of t he Claims Management Services Tribunal, (b) the President of the Financial Services and Markets Tribunal shall also actas President of the Claims Management Services Tribunal, (c) the Deputy President of the Financial Services and Markets Tribunal shallalso act as Deputy President of the Claims Management Services Tribunal,and(d) the panel of chairmen of the Financial Services and Markets Tribunalshall also be the panel of chairmen of the Claims Management ServicesTribunal.

(3) An appeal or reference to the Tribunal shall be heard by a member of thepanel of chairmen:

(a) selected in accordance with arrangements made by the President, and(b) sitting alone or, in accordance with those arrangements, with one or twomembers of the lay panel;

and a chairman who sit s with one other member shall have a cast ing vote.

(4) The Lord Chancellor may make rules about the proceedings of t he Tribunal;and the rules:

(a) shall include provision about timing of references and appeals, (b) shall include provision for the suspension of decisions of the Regulatorwhile an appeal could be brought or is pending, (c) shall include provision about the making of int erim orders,(d) shall enable the Tribunal to suspend or further suspend (wholly or partly)the effect of a decision of the Regulator, (e) shall permit the Regulator to apply for the termination of the suspensionof a decision of his, (f) may include provision about evidence, (g) may include provision about any other matter of a kind for which rulesunder section 132 of the Financial Services and Markets Act 2000 (c. 8) (theFinancial Services and Market s Tribunal) may make provision, (h) may include t ransit ional, consequential or incidental provision,

(i) may make provision generally or only for specified cases or


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circumstances, (j ) may make dif ferent provision for dif ferent cases or circumstances, (k) shall be made by statutory inst rument , and(l ) shall be subject to annulment in pursuance of a resolut ion of either House

of Parliament. (5) The following provisions of Schedule 13 t o the Financial Servi ces and Market sAct 2000 shall have effect, wit h any necessary modificat ions, in relation t o theClaims Management Services Tribunal:

(a) paragraph 5 (remuneration and allowances), (b) paragraph 6 (staff ), (c) paragraph 7(3) and (4) (composition), (d) paragraph 8 (sittings), (e) paragraph 10 (practice directions), (f) paragraph 11 (evidence), and(g) paragraph 12(1) to (3) (decisions).

(6) In Part 1 of Schedule 1 to the Tribunals and Inquiries Act 1992 (c. 53)(tribunals under supervision of Council) insert at the appropriate place:

"Claims managementservices The Claims Management Services Tribunalestablished by the Compensation Act 2006."

13 Appeals and references to Tribunal

(1) A person may appeal to the Claims Management Services Tribunal if theRegulator:

(a) refuses the person's application for authorisat ion, (b) grants the person authorisation on terms or subject to condit ions, (c) imposes condit ions on the person's authorisation, (d) suspends the person's authorisation, or (e) cancels the person's authorisation.

(2) The Regulator may refer to the Tribunal (wi th or wi thout f indings of fact orrecommendations):

(a) a complaint about the professional conduct of an authorised person, or (b) the question whether an authorised person has complied with a rule ofprofessional conduct.

(3) On a reference or appeal under this section the Tribunal:


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(a) may take any decision on an applicat ion for authorisation that theRegulator could have taken; (b) may impose or remove condit ions on a person's authorisat ion; (c) may suspend a person's authorisation;(d) may cancel a person's authorisat ion; (e) may remit a matter to the Regulator; (f) may not award costs.

(4) An authorised person may appeal to the Court of Appeal against a decision ofthe Tribunal.

14 Interpretation

In this Part:

"action" includes omission,"authorised person" has the meaning given by section 4,"claim" has the meaning given by sect ion 4, "claims management services" has the meaning given by sect ion 4,"exempt person" has the meaning given by sect ion 6(5), "regulated claims management services" shall be construed in accordancewith section 4(2)(e), "specif ied", in relat ion to an order or regulat ions, means specified in t he

order or regulations, and

"the Regulator" means (subject to sect ion 5(7)) the person designated undersect ion 5(1) or, where no person is designated or in so far as is necessaryhaving regard t o any order under sect ion 5(10), the Secretary of State.

15 Orders and regulat ions

(1) An order or regulations under this Part:

(a) may make provision that applies generally or only in specified cases orcircumstances, (b) may make dif ferent provision for dif ferent cases or circumstances, and(c) may include t ransit ional, incidental or consequential provision.

(2) An order or regulations under this Part shall be made by statutoryinstrument.

(3) An order under section 4(2)(e):

(a) may not be made unless the Secretary of State has consulted:

(i) the Office of Fair Trading, and(ii) such other persons as he thinks appropriate, and

(b) may not be made unless a draft has been laid before and approved by


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resolution of each House of Parliament. (4) An order under section 4(5) may not be made unless a draft has been laidbefore, and approved by resolution of, each House of Parliament.

(5) An order under section 5 may not be made unless a draft has been laidbefore, and approved by resolution of, each House of Parliament.

(6) An order under section 5(3) may include provision:

(a) for the appointment of members; (b) for funding;(c) for dissolut ion (which may include provision enabling the Secretary ofState to make provision for t he t ransfer of property, r ights and liabil it ies).

(7) The first order made under section 6 may not be made unless a draft hasbeen laid before, and approved by resolution of, each House of Parliament.

(8) An order under section 6 which has the effect of removing or rest ri cting anexempt ion f rom sect ion 4(1) may not be made unless a draft has been laidbefore, and approved by resolution of, each House of Parliament.

(9) Any other order under section 6 shall be subject to annulment in pursuanceof a resolution of either House of Parliament.

(10) Regulations under section 8 or 9 may not be made unless a draft has beenlaid before, and approved by resolution of, each House of Parliament.


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Appendix 2

Consultation in Respect of Exemptions (CP(L)22/06)


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Compensation Act 2006

Regulation of Claims Management Services

Consultation on exemptions fromthe requirement for authorisation

September 2006

CP(L) 22/06

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CP(L) 22/06

COMPENSATION ACT 2006Consultation on exemptions from the requirement for

authorisation

Introduction1. The Compensation Act 2006 received Royal Assent on 25 July. The Act is in two

parts: part 1 covers the law of negligence and part 2 covers the regulation ofclaims management services. A copy of the Act and papers issued during theParliamentary passage can be found on the DCA website at:(http://www.dca.gov.uk/legist/compensation.htm).

2. DCA issued a consultation paper on 6 July 2006 (CP(L) 12/06: Compensation Bill(Claims Management Services)). This sought views on key aspects of theproposed regulation of claims management services. It included:

the draft Scope Order1 to be made under section 4(2)(e) of theCompensation Act which will define the activities and sectors covered by thelegislation;

the draft regulations that will be made under section 9 and the Schedulewhich cover the requirements for authorisation and other related matters.

The paper also sought views on the conduct rules the regulator will prescribeunder paragraph 8 of the schedule to the Act. A copy of the paper is on the DCAwebsite at: http://www.dca.gov.uk/consult/claimsmang/cp1206.htm

3. A further consultation paper on the application form for seeking authorisation andfee scales was issued on 4 August 2006 (CP(L) 18/06).

The Regulator4. The Secretary of State for the Department for Constitutional Affairs will be the

Regulator initially; and a Head of Regulation with a small DCA unit will providesupport. An external monitoring and compliance unit will undertake the keyadministrative tasks. DCA is in the process of identifying a trading standards unitto fulfil this role.

Timetable5. The timetable for establishing the regulation is as follows:

FromNovember 2006 Applications for authorisation invited

February 2007 Deadline for submitting initial applications April 2007 Offence of providing, or offering to provide regulated

claims management services commences

1 The Scope Order will define the regulated activities and the sectors that will be subject toregulation. Anticipate that the sectors to be included in the Scope Order will be: Personal Injury,Mis-selling of Financial Products, Employment, Housing Disrepair, Criminal InjuriesCompensation, Industrial Injuries Disablement Benefit.

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Exemptions6. Section 6 of the Compensation Act 2006 gives the Secretary of State the power to

exempt by order persons or classes of person from the requirement forauthorisation. Those who are exempt may provide regulated claims management

services without the need for authorisation by the Regulator.

7. The primary aim of the regulation is protect consumers by regulating the conduct ofthose who provide claims management services for commercial gain but who arecurrently unregulated. The power to exempt can therefore be used to ensure thatthose who provide regulated claims management services within the relatively widedefinition in section 4 can be excluded where the Secretary of State considersregulation would be excessively burdensome, or where he considers a person orclass of person is already subject to adequate regulatory control.

8. Individuals who offer regulated claims management services otherwise than in thecourse of a business are specifically excluded from the prohibition in section 4(1)

and are therefore outside the scope of regulation. So individuals will not requireauthorisation or exemption if they offer advice voluntarily, for example by providingadvice to friends, or by working in a voluntary capacity for an advice centre.Organisations established or appointed by virtue of an enactment (such asstatutory ombudsmen) are exempted by s. 6(4) of the Act.

9. The Secretary of States power to exempt under section 6(2) may be used to: exempt a specified person or class of person provide that there is no requirement for authorisation in specified

circumstances (for example in relation to a particular type of claim) provide that there is no requirement for authorisation by a specified person

or class or person in specified circumstances

10. Before exempting a person or class of person, the Secretary of State needs to besatisfied that appropriate standards are in place to ensure adequate consumerprotection, and that the exempt person or class of person is likely to provide astandard of service similar to that provided by authorised persons. Relevantconsiderations include internal mechanisms in place for quality control andhandling consumer complaints, although the level of scrutiny required in each casemust be related to the reputation of the organisation in question and whether anyconcern had been expressed about the services provided.

11. A draft exemption order is attached to this paper at Annex A. The remainder of this

paper seeks views on the proposed exemptions for particular persons or classes ofperson, and specifically whether these are covered adequately by the draftexemption order.

Legal Professionals12. It is the Secretary of States intention to exempt solicitors, barristers and legal

executives from the requirement for authorisation, insofar as they provide regulatedclaims management services as part of their professional practice. The Secretaryof State is satisfied that these bodies have in place appropriate rules ofprofessional conduct regulating the behaviour of their members. All three areauthorised bodies for the purposes of the Courts and Legal Services Act 1990and the Secretary of State approves their rules in relation to rights of audience and

rights to conduct litigation (in consultation with an independent advisory body theOffice of Fair Trading and four designated judges). The exemption of these legal

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professionals will avoid the need the need for duplication in regulation, andtherefore avoid imposing unnecessary regulatory burdens.

13. The exemption will only apply to the extent that an individual is already regulated inthe provision of claims management services by their professional body. If a legalprofessional offered regulated claims management services which were outsidethe regulatory ambit of their professional body (for example if they were providedas part of a separate business, or if they were simply a student member of theprofessional body) the exemption would not apply and they would need to seekauthorisation from the Regulator.

14. In addition, the Secretary of State intends to exempt registered foreign and EUlawyers providing regulated services on the basis that they are required to complywith similar regulatory standards to legal professionals in England and Wales.

15. The exemption of legal professionals is covered by paragraph 4 of the draftexemption order.

Q1.Do you consider that the exemption for legal professionals is expressedappropriately in the draft exemption order?

Businesses regulated by the Financial Services Authority16. The Secretary of State also intends to exempt those who are already regulated by

the Financial Services Authority (FSA), to the extent that they are already regulatedin the provision of claims management services by the FSA. This would coverinsurers who provide services in relation to claims by their own policy holders. Itmay be the case that some businesses will need to be regulated by both the FSAand by the Claims Management Regulator for the different activities they carry onas part of their business.

17. The question of whether third party capture by liability insurers should be regulatedis addressed in our earlier consultation paper on the draft scope order(CP(L)12/06), which sought views on the position of liability insurers who seek tocapture a person injured by their policy holder and provide a package of servicesincluding rehabilitation before settlement of the claim. As this activity involves athird party rather than the insurers policy holder, it is not fully regulated by theFSA. However, the FSAs rules do state that in its dealings with a third party aninsurer should have regard to Principle 1 (Integrity), Principle 2 (skill, care anddiligence) and Principle 5 (Market conduct) and should not deal with the claim inany way less favourably than it would have done had the claim been proceededagainst its customer. Consideration of responses to our earlier consultation on this

topic will inform a decision about whether third party capture should be excludedfrom the scope of regulation.

Q2. Do you consider that the exemption for those regulated by the FSA isexpressed appropriately in the draft exemption order?

Businesses licensed under the Consumer Credit Act18. Providing loan facilities (or making arrangements to provide such facilities) for the

purposes of pursuing a claim will be a regulated activity, as will referring claimantsto loan providers. Those lending money or arranging credit for others are alreadyrequired to be licensed under the Consumer Credit Act 1974 by the ConsumerCredit Licensing Bureau. The Secretary of State therefore intends to exempt thoselicensed under the Consumer Credit Act to the extent that they are alreadyregulated. This means, for example, that a bank or other financial institution which

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provides loans but does not offer any other regulated claims management servicewill not require authorisation.

Charities and not-for-profit advice agencies19. The government does not wish to impose unnecessary burdens on the not-for-

profit and charitable advice sector, and recognises the extremely valuable workthat is done by this sector to provide access to justice. It is therefore proposed toexempt charitable and not-for-profit bodies from the requirement for authorisation.

20. Concern has been expressed that commercial claims management companiescould exploit an exemption for not-for-profit bodies as a loophole in the regulation,perhaps by using such an organisation as a vehicle for carrying on commercialactivities while unregulated. It is important that the definition in the exemption orderis broad enough to capture genuine not-for-profit advice agencies (many of whichare not registered charities), while not opening a loophole. The definition in thedraft exemption order is consistent with the one developed for the draft LegalServices Bill.

Q3. Does the definition of not-for-profit bodies in paragraph 7 of the exemptionorder successfully capture legitimate not-for-profit organisations, and excludesituations where individuals might wish to exploit such an organisation forcommercial gain?

Independent Trade Unions21. Following extensive debate in Parliament during the passage of the Compensation

Act, the government has committed to exempt from the requirement for regulationTrade Unions certified as independent by the Certification Officer, where theyprovide the claims management services to their members or members families.

Trade Unions generally provide good quality claims management services to theirmembers, and an exemption will allow them to continue without the additionburden of regulation. However, there is some concern about the activities of a verysmall number of unions. Individual trade unions which consistently fall below thestandards outlined in the code could be excluded from a general exemption andrequired to seek authorisation if they wished to continue providing regulatedservices.

22. There was widespread support in Parliament for the exemption to be limited to theprovision of services to full members and retired members. It is important that thedefinition of member is appropriate so as to avoid exempting Trade Unions in thecircumstances that they sign-up a member purely for the purposes of pursuing a

claim.

Q4. Are the definitions of full member and retired member in paragraph8(2) of the draft exemption order appropriate?

23. This exemption will be subject to the condition that Trade Unions comply with acode of practice prescribed by the Secretary of State, which is being developed inconjunction with the Trades Unions Congress. The code of practice will outline thekey principles which Trade Unions should follow when providing regulated claimsmanagement services to their members including openness and transparencyabout the handling of their claim and a proper mechanism for complaints andredress when things go wrong. The code will be issued for consultation shortly.

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24. Only unions which fall within the definition of s.1 of the Trade Union and LabourRelations (Consolidation) Act 1992 can be listed, so the exemption could not besuccessfully exploited as a loop hole by commercial claims managementcompanies.

Other organisations25. The Secretary of State has received requests for specific exemption from the

following organisations:

The Medical Protection Society, which is a not-for-profit mutual organisation,offering support to health professionals with the legal and ethical problems thatarise from their professional practice. This includes offering legal advice inrespect of clinical negligence claims.

The Independent Complaints Reviewer, who provides an independentcomplaints review service for a number of public bodies including the LandRegistry, the Charity Commission and the Housing Corporation.

The Motor Insurers Bureau, which was established in 1946 as a privatecompany limited by guarantee for the purpose of entering into Agreements

with the Government to compensate the victims of negligent uninsured anduntraced motorists. Every insurer underwriting compulsory motor insurance isobliged, by virtue of the Road Traffic Act 1988, to be a member of MIB and tocontribute to its funding.

Q5. Is it appropriate to exempt these additional organisations from therequirement for authorisation?

Other candidates for exemption26. It may be that other classes of person should be exempted. It is envisaged that the

activity of referring claimants details will only be regulated by order under s.4(2)(e)where such referrals are carried out for money or moneys worth. However, there

may be cases of other organisations providing regulated services, which it is notappropriate to regulate. For example, employers may offer claims managementservices to their employees in some cases, and health care professionals mayprovide informal advice to patients about the options for pursuing a claim. This islegitimate activity which may fall within the definition in section 4. In addition, it ispossible that Student Unions provide advice to their members which falls within thedefinition.

Q6. Are there any additional persons or classes of person which should beincluded in the exemption?

Comments27. Comments on this consultation should be received by Friday 13 October 2006.

Comments can be sent by post or e-mail to:

3

Claims Management and Private Funding PolicyLegal Services Regulation and Redress DivisionDepartment for Constitutional Affairs

rd Floor, Selborne House54-60 Victoria StreetLondon SW1E 6QWE-mail: [email protected]

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Appendix 3

Draft Compensat ion (Exempt ions) Order 2006


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Draft Order laid before Parliament under section 15 (7) of the Compensation Act 2006, for

approval by resolution of each House of Parliament.

D R A F T S T A T U T O R Y I N S T R U M E N T S

2006 No. [ ]

CONSUMER PROTECTION, ENGLAND AND WALES

The Compensation (Exemptions) Order 2006

Made - - - - ***

Coming into force - - ***

This Order is made in exercise of the powers conferred by section 6 of the Compensation Act2006(a).

A draft of this Order has been laid before Parliament in accordance with section 15(7) of that Actand approved by a resolution of each House of Parliament.

Accordingly, the Secretary of State makes the following Order:

Citation

1. This Order may be cited as the Compensation (Exemptions) Order 2006.

Commencement

2. This Order comes into force on [date].

Definitionthe Act

3. In this Order, the Act means the Compensation Act 2006.

Legal practitioners

4.(1) Section 4(1) of the Act does not prevent the provision of a regulated claims managementservice in the circumstances that the service is provided by

(a) a legal practitioner acting in the normal course of practice in a way permitted by theprofessional rules to which he is subject;

(b) a firm, organisation or body corporate providing the service through a legal practitioneracting in the normal course of practice in a way permitted by the professional rules towhich he is subject; or

(a) 2006 c.


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(c) an individual providing the service at the direction, and under the supervision, of a legalpractitioner acting in the normal course of practice, in a way permitted by the professional

rules to which he is subject, who is

(i) his employer or fellow employee; or

(ii) a director of a company, or a member of a limited liability partnership (being acompany or partnership referred to in subparagraph (b)) that is his employer.

(2) In paragraph (1), legal practitioner means

(a) a solicitor, barrister or advocate of any part of the United Kingdom;(b) a Fellow of the Institute of Legal Executives;(c) a European lawyer, as defined in the European Communities (Services of Lawyers) Order

1978(a);

(d) a registered foreign lawyer, within the meaning given by section 89(9) of the Courts andLegal Services Act 1990; or

(e) any other member of a legal profession, of a jurisdiction other than England and Wales,that is recognised by the Law Society or the General Council of the Bar as a regulatedlegal profession.

Persons providing services that are regulated activities under the Financial Services and

Markets Act 2000

5.(1) Section 4(1) of the Act does not prevent the provision of a regulated claims managementservice by a person if

(a) the service is a regulated activity for the purposes of the Financial Services and MarketsAct 2000; and

(b) the person(i) is an authorised person and is authorised to provide the service;

(ii) is an appointed representative (within the meaning given by section 39 of theFinancial Services and Markets Act 2000) of an authorised person who is authorised

to provide the service, and does so as the representative of that authorised person; or

(iii) has, in relation to providing the service, the benefit of an exemption order undersection 38 of that Act.

(2) In paragraph (1), authorised person has the meaning given by section 31(2) of the

Financial Services and Markets Act 2000.

Certain consumer credit providers

6. Section 4(1) of the Act does not prevent the provision of a regulated claims managementservice by a person licensed under the Consumer Credit Act 1974(b) to carry on a consumer credit

business if the provision of the service is authorised by that licence.

Charities and not-for-profit advice agencies

7.(1) Section 4(1) of the Act does not prevent the provision of a regulated claims managementservice by a not for profit bodythat is, a body that, by or under its constitution

(a) is required to apply the whole of its net income after payment of outgoings for charitableor public purposes; and

(b) is prohibited from distributing, directly or indirectly, any part of its net income by way ofprofits, or its assets, among any of its members.

(a) S.I. 1978/1910, as amended by the European Communities (Services of Lawyers) (Amendment) Order 2004 (SI 2004/1117).(b) 1974 c. 39.

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and discrimination; claims for housing disrepair; and claims relating to the mis-selling of certainfinancial products.

This Order exempts legal practitioners (barristers, solicitors, advocates, legal executives andforeign lawyers) who are already regulated by their respective professional bodies from the

obligation to be authorised. It also exempts various other persons that are either already regulated

in other ways, or do not provide regulated claims management services for profit.

Compensation Act 2006

Documents

Transcript of Compensation Act 2006