News releases

Solicitors warned not to deal with unregulated claims referrers, managers

20 April 2007

Solicitors could face disciplinary sanctions if they deal with certain unregulated claims referral companies or claims management companies after next week.

Regulation of claims management services will come into force on Monday, 23 April. The regulation is backed by criminal sanctions. Solicitors should check the status of any claims management company which provides their firm with regulated claims management services (e.g. introducing clients with personal injury claims). Failure to do this could result in disciplinary action or even prosecution.

These new measures have been brought in by the Compensation Act 2006 in order to improve standards in the claims management industry.

"We expect solicitors to take care that they are only using companies which are properly regulated. These are important measures designed to protect the public from claims farmers who have been using unscrupulous tactics and aggressive selling techniques", said Peter Williamson, chairman of the Solicitors Regulation Authority (SRA).

Claims management companies will have to comply with new rules of conduct covering advertising, marketing and soliciting of business. Rules include giving information to clients before they sign a contract and a duty to have a complaints procedure.

"The authorisation process has already been effective in requiring some businesses to change their advertising and contracts. We will be closely monitoring the activities of claims management businesses and will not hesitate to take regulatory action where necessary. We will also pass onto the SRA information about solicitors who take business that has been improperly acquired", said Mark Boleat, head of Claims Management Regulation at the Department for Constitutional Affairs.

Solicitors can check the status of an introducer on a dedicated website: www.claimsregulation.gov.uk.