The Ministry of Justice will have the power to fine claims firms up to 20 per cent of their turnover under new powers taking effect at the end of the month.
Last year, the MoJ announced it would be given the power to impose fines on claims firms which use information gathered by unsolicited calls and texts or which provide poor quality services.
It has now published details of these additional enforcement powers, which come into effect on 29 December.
The MoJ will be able to impose maximum fines of £100,000 on firms with turnover of less than £500,000 a year.
For firms with a turnover of more than £500,000, the MoJ will have the power to fine them a maximum of 20 per cent of turnover.
The MoJ says financial penalties will be likely where: rule breaches have continued despite previous warnings; detriment caused to consumers can be monetised; the firm has sufficient means to pay a fine; and suspending or cancelling the firm’s authorisation would be disproportionate.