Date: 22 September 2006

COMPENSATION ACT RECEIVED ROYAL ASSENT 25 JULY 2006 - Part 3

Welcome to our final instalment of information relating to the Compensation Act 2006. This relates to the activities of claims management firms and is quite brief because much of the detail will emerge later as discussed below.

Claims Management Services

The above provisions are all contained in part 1 of the Act. Part 2, claims management services, sets out the framework for a regulatory system to include the appointment of a regulator and the preparation of regulations to ensure that persons carrying out claims management services do so in a fair and proper manner.

The provisions in the accompanying schedule are quite detailed but in essence, there will be a system of authorisation of persons, control by a regulator, a code of conduct and a system of compensation where there has been a breach. There is also to be a system of enforcement involving criminal sanctions.

Unlike sections 1 to 3 of the Act, the provisions relating to the claims management services are not in force immediately and will be implemented later by means of a statutory instrument. These provisions apply to England and Wales only. 

Derek Adamson