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Claims firms face 10% fee hike as MoJ sets out stricter rules


Claims management companies are facing a 10 per cent rise in regulatory fees as the Ministry of Justice steps up its scrutiny of the sector.

The MoJ, which regulates claims management firms, last week published proposals for stricter rules for claims firms which aim to crack down on speculative claims and irresponsible practices.

It is also consulting on a fee increase for firms for 2014/15 to reflect the additional resource it is putting into regulating the sector.

Earlier this month, the MoJ announced it had been given the power to fine claims firms for the first time under an amendment to the Financial Services Bill, and that it would be consulting on a new set of rules and fees schedule in due course.

Its consultation paper proposes that claims firms must take all reasonable steps to investigate the existence and merits of a potential claim before presenting it to a third party, and must evidence the basis of claims when making representations to third parties. Representations to third parties must not be fraudulent, false or misleading, it says.

In addition, it is proposing that directors of firms must have a working knowledge of the legislation and rules relating to regulated claims management services.

The MoJ says: “It should seem obvious that a working knowledge of the legislation and rules of claims management services is a basic requirement, however the claims management regulation unit has found instances where this has not been the case.”

The consultation ends on 9 January 2014.

In a separate consultation paper, the MoJ proposes increasing claims firms’ regulatory fees by 10 per cent to a total bill of £4.7m for 2014/15.

It is also proposing increasing the fee cap from £50,000 to £55,000.

In addition, the MoJ is proposing to increase the uplift fee it charges financial products and services claims firms by 15 per cent, to 0.145 per cent of the annual turnover of this sector.

It also suggests raising the uplift fee cap from a current level of £25,000 to £55,000.

The MoJ says it levies an uplift fee on financial products and services firms because this sector requires greater regulatory resource than others. 


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There are 2 comments at the moment, we would love to hear your opinion too.

  1. The consultation can be found at and I urge everybody with an opinion – particularly those who have suffered from invention and fraud – to respond with their views on the changes being considered.

  2. Presumably Alan you will be responding whole heartidly supporting the need for CMC’s to get more information before making a complaint? So you will no longer be stating that CMC’s who make DSAR requests are blatantly fishing?

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