Implementing the Compensation Act 2006: regulation of claims management

The Compensation Act 2006 received Royal Assent on 25 July 2006. Following concerns about the growth of an industry of so-called “claims farmers”, Part 2 of the Act deals with the regulation of businesses and individuals providing claims management services, and creates the regulatory framework to authorise providers who will be required to comply with regulatory rules. It also includes power for the Regulator to investigate unauthorised activities and to prosecute those who try to evade regulation. In the early stages, the regulations will cover claims in respect of personal injury, including work-related injury, disease or disability, criminal injuries compensation, employment matters, housing disrepair, miss-selling of financial products and industrial injury disablement benefits.

The main provisions of the Act are to be supported by rules governing the day to day conduct of “authorised persons” in the field of claims. The main components are: