On 17 December 2018, the FCA published a policy statement, PS18/23, which sets out the conduct, rules and fees it will apply to claims management companies (CMCs) from April 2019. The policy statement confirms the approach the FCA will take to regulation following its June 2018 consultation paper, CP18/15 and its August 2018 consultation paper, CP18/23.
The FCA says that the vast majority of the 87 responses to CP18/15 supported its proposals. In general, it has implemented the consultation proposals, but has made some changes based on the feedback. These include:
- clarifying the requirements for lead generators when using the term "no win, no fee";
- reducing the amount of information CMCs need to set out on the services they will provide in the one-page summary document;
- making some changes to its pre-contractual and ongoing disclosure requirements;
- making some changes to its reporting requirements;
- introducing a lower minimum periodic fee of £500 for smaller firms with turnover up to £50,000 instead of the single minimum fee it had proposed of £1,000 for firms with turnover up to £100,000.
The final rules are set out in the following instruments:
- the Claims Management Instrument 2018, FCA 2018/56 and FOS 2018/6, which comes into force on 1 April 2019 except for part 1 of annex A, which comes into force on 1 January 2019;
- the Fees (Claims Management Companies) Instrument 2018, FCA 2018/59 and FOS 2018/8, which comes into force on 1 January 2019.