When earlier this year Kevin Rousell, Head of the Ministry of Justice’s Claims Management Regulation Unit announced that the CMC industry would be undergoing “radical changes over the next 12 months”, many may have been forgiven for having reasonably low expectations of what lay ahead.
However, this month has seen the CMR Unit issue a number of publications which sends out a clear message that the tide is turning for those CMCs unwilling to toe the regulator’s line as the Ministry of Justice appears to be set on improving standards, particularly in relation to CMCs targeting the financial services sector.
Firstly, there was the publication of the CMR Unit’s Annual Report, which made it clear that tackling poor quality conduct was top of the agenda. This was then followed by the CMR Unit’s Consultation Paper, proposing changes to the Conduct of Authorised Persons Rules 2007 (“the Rules”). Now, only days later, plans have been announced for the Legal Ombudsman to take responsibility for complaints made about CMCs, freeing up valuable resource within the CMR Unit enabling them to focus on tackling those CMCs who fail to comply with their obligations under the Rules.
As a result of the changes, set to take place in April 2013, the Legal Ombudsman will be able to order CMCs who provide a poor service to pay compensation or another form of redress. Questions are already being asked about precisely how the Legal Ombudsman will enforce its compensation awards against CMCs and only time will tell as to the level of impact that this development will have in practice. However, whatever the outcome, it seems clear that the CMR Unit is drawing on all its available resources to help strengthen its battle against the increasing challenges presented by poor quality claims management firms.