As of 23 April 2007, measures introduced under the Compensation Act 2006 establish a regulatory framework for claims management services. Such services can only now be provided by those authorised to do so or those exempt from authorisation. These changes will not affect solicitors, whose professional standards will continue to be regulated by the Law Society.

 

The new laws were introduced to prevent unscrupulous claims companies from using sharp practices – for example aggressive advertising and the use of hard-sell tactics such as canvassing passers-by in the street.

 

Once authorised, businesses will have to follow strict rules of conduct. If an authorised person fails to comply with the rules, the Regulator has the power to take disciplinary action against them. A finding of professional misconduct could lead the Regulator to vary, suspend or cancel a person's authorisation. For anyone found guilty of providing regulated services without authorisation, the maximum penalty is 2 years imprisonment or a fine or both.