Guidance

CMR bulletin 24

Published 9 December 2014

This guidance was withdrawn on 1 April 2019

This page has been withdrawn because it’s out of date. Responsibility for the regulation of Claims Management Companies has been taken over by the Financial Conduct Authority.

This bulletin includes information and advice on reforms to the CMR regime, the fees to be paid by claims management companies (CMCs) in 2015/16, and details about the Copy Advice service provided by the Advertising Standards Agency.

1. Regulatory reforms

As you will be aware from the announcements made throughout the year, we are taking forward a series of new measures designed to strengthen and extend the effectiveness and reach of the CMR regime.

1.1 Important changes to surrendering authorisation – December 2014

Following public consultation, the circumstances under which CMCs can surrender their authorisation has changed. From 9 December 2014 CMCs must obtain written consent from the Regulator to surrender their authorisation if:

• the Regulator has given the business notice that it is being investigated under Regulation 35
• the business has been given a notice to provide further information or documents under Regulation 36 in relation to an investigation
• the business has been notified that a warrant issued under Regulation 40 has been raised against it
• the alleged non-compliant activity that led to the investigation, notice or warrant, took place on or after 9 December 2014

For further information on the new surrender provisions, please read our guidance.

1.2 Financial penalties scheme – December 2014

On 29 December 2014, the new financial penalties scheme will come into force, following public consultation and parliamentary approval. CMCs will face financial penalties of up to 20 per cent of their annual turnover if they are found to have breached the conditions of authorisation, including breaking the Conduct of Authorised Persons Rules 2014.

We will shortly be publishing guidance on how the new scheme will work. Once available, please ensure that you familiarise yourself with this guidance.

1.3 Legal Ombudsman complaints handling scheme – January 2015

From 28 January 2015 the Legal Ombudsman will begin to consider complaints about authorised CMCs, subject to parliamentary approval. There will be new guidance in mid December to help your business prepare for the new scheme.

We have recently consulted on the requirement for CMCs, as part of the scheme, to co-operate with the Legal Ombudsman and provide clients with certain information. The consultation response will be published shortly.

We also consulted on the fees the Legal Ombudsman intends to charge CMCs to recover the costs associated with dealing with complaints. Details of the fees framework are set out in the consultation response. For further information on how we intend to collect these fees, please see section 2.3 below.

2. Fees paid by CMCs

2.1 CMR fees consultation 2015/16

We have published a consultation paper on proposed fees paid by claims management businesses for the regulation year, 1 April 2015 to 31 March 2016.

Views are invited on proposals to:

• increase the application fee from £1,400 to £2,000
• increase the annual regulation fee pay scales for CMCs with turnovers under £88,889
• increase the fees based on percentage of turnover levied on CMCs with turnovers over £88,889
• either remove the fees caps for annual regulation and the financial products and services uplift; or alternatively retain the fees cap but increase it to £100,000
• maintain the existing financial products and services uplift at 0.145%

Details can be found in the consultation paper. Please send us your comments by 18 December 2014, using the response form contained in the consultation paper or email claimsmanagementregulation@justice.gsi.gov.uk. We will publish our response to the consultation in early 2015.

2.2 CMR annual fees collection 2015/16

In early February 2015, we will be requesting information in order to issue annual fee invoices to all CMCs. We will contact you to inform you when and how you can access the online form which you must complete.

We will ask for your claims management related turnover for the 12 months to 30 November 2014. You should be ready to provide accurate information on this when we contact you in February. If this information is not easily available, we advise that you begin the work now to have this information ready by the beginning of February.

If you have made any changes to your business which you have not updated us about (for example your contact person or address) please inform us as a matter of urgency by email at authorisations@claimsregulation.gov.uk

2.3 Legal Ombudsman Scheme fees collection 2015/16

The fees for the Legal Ombudsman scheme will be collected at the same time as the CMR annual fees collection in early February 2015. Your business will only be required to provide information once and this will then be used to calculate your annual fee for the Legal Ombudsman Scheme.

Further information, including some frequently asked questions (FAQs), will be provided in January 2015.

3. Advertising Standards Authority (ASA) Bespoke Copy Advice

All claims management advertising must comply with the Conduct of Authorised Persons Rules 2014. Client specific rules 2 to 8 specifically relate to advertising, marketing and soliciting business.

Those rules state that all advertising, marketing and other soliciting of business must comply with the CAP Code (for non-broadcast advertising or marketing) or the BCAP Code (for broadcast advertising or marketing). These codes are enforced by the ASA who can take steps to remove or have amended any adverts that breach the codes. Breaches of the CAP and BCAP codes are therefore also breaches of the CMR conduct rules.

The ASA pro-actively check media adverts and consider complaints about advertising. They take action where the codes are breached and details of decisions are published on the ASA website. We investigate CMCs who have breached the codes and the outcome could be to vary, suspend or cancel authorisation. We will shortly also be able to issue financial penalties for these breaches. It is therefore important that you are familiar with these codes where they apply to you and comply with them.

3.1 Help and advice

The Committee of Advertising Practice are responsible for the codes which the ASA administer and provide a bespoke copy advice service via the CAP website. They provide free advice on adverts usually within 24 hours but also provide express advice (within 4 hours) for a fee. As well as providing advice on adverts, they also maintain an advice database and help notes and training on the rules is available.