24 May 2007
The new offices of a unique unit that assists the Ministry of Justice in its work to regulate claims management businesses were officially opened by Justice Minister Bridget Prentice today.
Claims management regulation has been fully in force since 23 April, when it became an offence to offer claims management services without the authorisation of the Secretary of State for Justice, Lord Falconer.
The unit, which has been processing applications for authorisation since November 2006, is contracted by the Ministry of Justice to provide a monitoring and compliance role that is central to Government efforts to protect consumers by clamping down on ambulance chasers and cowboy claims management companies.
The unit is run by Staffordshire County Council Trading Standards, the first time a local council trading standards service has assisted central government to provide a national regulation service.
The work of the unit will help the Ministry of Justice in its aims to:
- end high pressure selling;
- stop unauthorised marketing activity in hospitals;
- reduce misleading advertising;
- make contracts clearer and more transparent; and
- ensure that consumers are offered clear complaints procedures.
Opening the unit's new offices at 57-60 High Street, Burton-on-Trent, Bridget Prentice said:
I'm delighted to welcome the Unit to its new home.
This is the first time a local authority trading standards service has helped central government to regulate consumer services across the country. Almost 1000 businesses have been authorised so far, which demonstrates just how efficient the unit has been.
I'm confident the new safeguards for consumers that the staff here provide will help to ensure rising standards across the entire claims management industry.
Consumers and legal professionals will be able to check if a company is authorised by using the search facility for authorised persons provided on the dedicated website at http://www.claimsregulation.gov.uk/. or by calling the general enquiry number on 0845 450 6858.
Notes to Editors
1. Following the formal tender exercise in September 2006, Staffordshire County Council's Trading Standards Unit was selected to run the Monitoring and Compliance Unit for the regulation of claims management services on a three-year contract.
2. The Compensation Act 2006 received Royal Assent on 25 July 2006. Part 2 of the Act establishes a statutory framework for the regulation of claims management services. It is now prohibited to provide the regulated services unless authorised or exempt. The Regulator has powers under the Act to take action against persons suspected of providing regulated services without authorisation (if found guilty the maximum penalty is 2 years imprisonment or a fine or both), and against authorised persons suspected of breaching the rules or unprofessional conduct. A finding of professional misconduct could lead the Regulator to vary, suspend or cancel a person's authorisation.
3. Once authorised, businesses have to comply with strict rules of conduct including:
- a prohibition on cold calling in person;
- a prohibition on high pressure selling;
- transparent contracts;
- disclosure of referral fees, and
- complaints procedure.
4. The regulation will initially apply to claims in respect of -
- Personal injury
- Criminal injuries compensation
- Employment
- Housing disrepair
- Financial products and services
- Industrial injury disablement benefits
5. Under the current arrangements, the Secretary of State for Justice is formally the Regulator. A Head of Regulation has day to day responsibility for the operation of the regulation and takes decisions on behalf of the Secretary of State. Mark Boleat has been appointed to this position until August 2007. Staffordshire County Council Trading Standards Unit is providing the MoJ's Monitoring and Compliance function under contract. The Unit manages the authorisation process and also carries out the monitoring and compliance work.
6. The claims management regulation website provides guidance and comprehensive information on the authorisation process and other aspects of the regulation and the baseline study 
is available on this website.
7. Any further media enquiries on this news release should be directed to Zoë Campbell at the Ministry of Justice press office on 020 7210 8695.
ENDS