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This publication is available at https://www.gov.uk/government/publications/cmr-bulletin-33/cmr-bulletin-33
The CMR business bulletins aim to highlight current developments and provide an update on issues that are of interest or affect claims management services.
This edition includes information and advice on General Data Protection Regulation Rules, claims for cavity wall insulation, the Financial Guidance and Claims Bill, and regulation fees for 2018/19.
1. Compliance Update
1.1 General Data Protection Regulations
The General Data Protection Regulations (GDPR) will apply in the UK from 25 May 2018. It is likely that you will be affected by these changes if you process any data and therefore it is advised that you should start preparing for this. In particular, you should review the data you currently hold, document where it came from, and who you share it with. You must also ensure that you have a lawful basis for processing data in line with the GDPR, and keep a record of this. Any consent obtained from clients must also meet the GDPR standard and you will need to ‘refresh’ your existing consents now if they are insufficient.
The Information Commissioner’s Office (ICO) has issued guidance outlining ‘12 steps to take now’ in order to prepare. The DMA is also offering webinars on the practical implications of the GDPR to its members.
1.2 Payment of client fees by instalments
If you are offering clients the option of paying fees by instalments you may require authorisation from the Financial Conduct Authority (FCA) in respect of regulated consumer credit activities. Please review the FCA guidance: instalment credit firms and authorisation to check if you may be offering instalment credit agreements that are not exempt from FCA regulation.
1.3 Claims for cavity wall insulation
Although most claims activity in relation to cavity wall insulation (CWI) falls outside of the regulator’s scope, you may require authorisation if you provide claims management services in relation CWI for claims that contain aspects which fall under a regulated sector such as:
- Housing disrepair: A CWI claim may be considered as a housing disrepair claim if it is being brought by a tenant against their landlord, as the person responsible for the repairs.
- Personal injury: Any business wishing to seek out, investigate, provide advice, represent, or refer a claim in relation to a personal injury claim arising from CWI, would require authorisation unless a valid exemption applies. Authorised businesses should also be mindful of the Legal Aid, Sentencing and Punishment of Offenders Act 2013 which prohibits payment of referral fees for personal injury claims.
- Financial products and services: If the basis of the claim is in relation to the mis-selling of a finance agreement, which is linked to the sale of the CWI. Services in relation to CWI claims may not require authorisation if a claim is brought solely in relation to property damage.
2. Other CMR news and updates
2.1 Financial Guidance and Claims Bill
On 21 November at Third Reading in the House of Lords, amendments were passed for an interim cap to the fees CMCs and legal service providers can charge for PPI claims, and an extension of regulation to Scotland. These amendments received strong cross-party support. The Bill has completed its passage through the House of Lords and was introduced in the House of Commons for consideration on 22 November. The progress of the Bill can be followed on the Parliament website where you can sign up for email alerts.
CMR consultation response: cutting the costs for consumers – financial claims
On 15 November, the CMR published its consultation response to ‘Cutting the costs for consumers – financial claims’ and announced the intention to implement a number of rule changes, including banning upfront fees and itemised billing for cancellation fees by 1 April 2018 via the Conduct of Authorised Persons Rules.
A special bulletin was published on 23 November to provide advice to CMCs on next steps following recent announcements in relation to the fees CMCs can charge for financial products and services claims.
2.2 Regulation fees paid by CMCs: 2018 - 2019
On 20 October, a consultation paper was published on the regulation fees to be paid by CMCs for 2018-19. We are proposing that fee levels should remain unchanged. The consultation closed on 16 November. The responses are now being analysed and the consultation response is expected to be published in January 2018.
2.3 Legal Ombudsman professional learning courses
In the New Year, the Legal Ombudsman will be running a new course focused on accident management complaints. The course, ‘Accident Management Complaints: providing a positive customer journey’, will run on 3 April 2018 at 1:00pm in Birmingham. To book a place or for more information on other available courses, please visit the Legal Ombudsman website.
2.4 Research into CMC users by the Legal Ombudsman
On 15 November, the Legal Ombudsman published a profile of claims management consumers to help the industry provide a better service to its consumers and reduce complaints. The YouGov study profiled 2,800 consumers in Great Britain who had used a CMC in the past two years, looking at their media consumption habits, internet activity, income, where they live, and their hobbies.
2.5 Solicitors Regulation Authority thematic review of the personal injury sector
The Solicitors Regulation Authority (SRA) published a thematic review of the quality of legal services in the personal injury sector on 15 December. This will assist the SRA in increasing their understanding of the personal injury sector, and the concerns expressed.
2.6 Call for Evidence: Holiday sickness claims
On 9 July 2017, the Government announced measures to tackle the apparent increase in package holiday sickness claims. As part of these measures, a call for evidence was published to help inform decisions in respect of package holiday personal injury claims. The consultation ran from 13 October to 11 November. The Government is considering the way forward.
2.7 Recent enforcement action
Read our latest report summarising the action taken against CMCs in breach of the rules during the last quarter.