July 23, 2013

CMCs Come Under Fire Again as MOJ Order them to Show They Comply with Law

This post was written by: Aston Bond Law Firm

Claims management companies are coming under fire yet again as The Claims Management Regulation Unit visits over 400 CMC’s across England and Wales to find that almost one-third may not be complying with the recent fee ban introduced back in April of this year.

Out of the 450+ that were visited by The Claims Management Regulation Unit almost one-third have been issued with notices to provide further details on how their business operates; some have also been served with enforcement notices regarding irregularities or breaches throughout their websites.

The recently introduced fee ban makes it illegal for any companies to operate with a referral fee within their CMC; this new law came into practice from the 1st April 2013. Many CMC’s and businesses within the sector were highly concerned about the pressure this would put on companies operating within this sector and the effect has now become obvious with the number of CMC’s registered to handle personal injury claims falling by over 700 between March of 2012 and June of 2013.

However, more CMC’s are continuing to be registered with the Law Society Gazette reporting of over 600 being authorised in 2012/13; showing an increase from 591 the prior year. Although an increase has been seen it is certain that the sector is seeing growing regulations and at the same time being placed under further financial pressure.

The full report, which was published today, can be read here.

Ashton Hudson, Online Marketing Executive