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This afternoon after PMQ's in HoC - Then after 3pm in HoL
Claims Management Services
Part 2 Claims Management Services
16 Transfer to FCA of regulation of claims management services
(1) 20The Financial Services and Markets Act 2000 is amended as follows.
(2) In section 21 (restrictions on financial promotion)—
(a) in subsection (1)—
(i) the words from “to engage” to the end become paragraph (a),
and
(ii) 25at the end of that paragraph insert “, or
(b) to engage in claims management activity.”,
(b) after subsection (10) insert—
“(10A) “Engaging in claims management activity” means entering into
or offering to enter into an agreement the making or
30performance of which by either party constitutes a controlled
claims management activity.
(10B) An activity is a “controlled claims management activity” if—
(a) it is an activity of a specified kind,
(b) it is, or relates to, claims management services, and
(c) 35it is carried on in England or Wales.”, and
(c) after subsection (12) insert—
“(12A) Paragraph 25 of Schedule 2 applies for the purposes of
subsection (10B) with the references to section 22 in sub-
paragraph (3) of that paragraph being read as references to
40subsection (10B).”
(3) In section 22 (regulated activities)—
Financial Guidance and Claims BillPage 12
(a) after subsection (1A) insert—
“(1B) An activity is also a regulated activity for the purposes of this
Act if it is an activity of a specified kind which—
(a) is carried on by way of business in England or Wales,
5and
(b) is, or relates to, claims management services.”, and
(b) in subsection (3) for “subsection (1) or (1A)” substitute “subsections (1)
to (1B)”.
(4) In section 234C (complaints to the FCA by consumer bodies)—
(a) 10in subsection (1), after “financial services” insert “or of a market in
England and Wales for claims management services”, and
(b) in subsection (5)—
(i) in paragraph (a), at the end insert “(and “market in England and
Wales” is to be construed accordingly)”, and
(ii) 15in paragraph (b), after “financial services” insert “, or of a
market in England and Wales for claims management
services,”.
(5) In section 234I (FCA’s functions under Part 4 of the Enterprise Act 2002)—
(a) in subsection (2)(b), after “services” insert “or to the provision of claims
20management services in England and Wales”, and
(b) in subsection (6)(a), after “financial services” insert “or in England and
Wales of claims management services”.
(6) In section 234J(2) (FCA’s functions under the Competition Act 1998), after
“financial services” insert “or relate to the provision of claims management
25services in England and Wales”.
(7) In section 234M(1) (function of keeping market under review), after “services”
insert “and the market in England and Wales for claims management services”.
(8) In section 417(1) (definitions), at the appropriate place insert—
(9) After section 419 insert—
“419A Claims management services
(1) In this Act “claims management services” means advice or other
35services in relation to the making of a claim.
(2) In subsection (1) “other services” includes—
(a) financial services or assistance,
(b) legal representation,
(c) referring or introducing one person to another, and
(d) 40making inquiries,
but giving, or preparing to give, evidence (whether or not expert
evidence) is not, by itself, a claims management service.
(3) In this section “claim” means a claim for compensation, restitution,
repayment or any other remedy or relief in respect of loss or damage or
Financial Guidance and Claims BillPage 13
in respect of an obligation, whether the claim is made or could be
made—
(a) by way of legal proceedings,
(b) in accordance with a scheme of regulation (whether voluntary
5or compulsory), or
(c) in pursuance of a voluntary undertaking.
(4) The Treasury may by order provide that a claim for a specified benefit
is to be treated as a claim for the purposes of this section.
(5) The Treasury may specify a benefit under subsection (4) only if it
10appears to the Treasury to be a social security benefit, payable under
the law of any part of the United Kingdom, designed to provide
compensation for industrial injury.
419B Carrying on claims management activity in England or Wales
(1) The Treasury may by order make provision as to the circumstances in
15which a person is, or is not, to be treated as carrying on—
(a) a regulated claims management activity, or
(b) an activity of a kind specified in an order under section 21(10B),
in England or Wales.
(2) Subsections (2) to (5) of section 419 apply in relation to an order under
20subsection (1) as they apply in relation to an order under subsection (1)
of that section, but as if the references to regulated activities in
subsection (2) of that section were references to regulated claims
management activities or, as the case may be, to activities of a kind
specified in an order under section 21(10B).”
(10) 25In section 429 (parliamentary control of statutory instruments)—
(a) in subsection (1)(a) (orders subject to affirmative procedure), for “or
419” substitute “, 419 or 419B”,
(b) in subsection (4)—
(i) in paragraph (e), for “or (10)” substitute, “, (10) or (10B)”,
(ii) 30omit the “or” at the end of paragraph (f), and
(iii) after paragraph (g) insert “; or
(h) it adds one or more activities to those that are
controlled claims management activities for the
purposes of section 21.”, and
(c) 35after subsection (7) insert—
“(7A) An order to which, if it is made, subsection (7B) will apply is not
to be made unless a draft of the order has been laid before
Parliament and approved by a resolution of each House.
(7B) This subsection applies to an order under section 419A(4) if—
(a) 40it is the first order to be made, or to contain provisions
made, under that subsection; or
(b) it adds one or more benefits to those that are specified
benefits for the purposes of section 419A.”
(11) In Schedule 2 (regulated activities)—
(a) 45in paragraph 25 (order making power), in sub-paragraph (1)—
(i) in the opening words for “or (1A)” substitute “to (1B)”;
Financial Guidance and Claims BillPage 14
(ii) in paragraph (f) at the end insert “, including provision which
applies (with or without modification) provision in this Act or
other primary or subordinate legislation that relates to
investment activity or financial services to a regulated activity
5that does not relate to investment activity or financial services.”,
and
(b) in paragraph 26 (parliamentary control), in sub-paragraph (1) for “or
(1A)” substitute “to (1B)”.
(12) Schedule 4 contains provision about transfer schemes where an order is made
10under section 22(1B) of the Financial Services and Markets Act 2000 (inserted
by subsection (3)(a)).
(13) Schedule 5 contains transitional provision relating to this section.
17 Power of FCA to make rules restricting charges for claims management
services
(1) 15The Financial Services and Markets Act 2000 is amended as set out in
subsections (2) and (3).
(2) After section 137FBB insert—
“137FC FCA general rules: charges for claims management services
(1) The power of the FCA to make general rules includes power to make
20rules prohibiting authorised persons from—
(a) entering into a specified regulated claims management
agreement that provides for the payment by a person of charges
which, taken with charges payable under an agreement treated
by the rules as being connected with the regulated claims
25management agreement (if any), are specified charges, and
(b) imposing specified charges on a person in connection with the
provision of a service which is, or which is provided in
connection with, a specified regulated claims management
activity.
(2) 30The FCA must make rules by virtue of subsection (1) in relation to all
regulated claims management agreements, and all regulated claims
management activities, which concern claims in relation to financial
products or services.
(3) The rules must be made with a view to securing an appropriate degree
35of protection against excessive charges for the provision of a service
which is, or which is provided in connection with, a regulated claims
management activity.
(4) The rules may specify charges by reference to charges of a specified
class or description, or by reference to charges which exceed, or are
40capable of exceeding, a specified amount.
(5) In relation to an agreement entered into, or charge imposed, in
contravention of the rules, the rules may (amongst other things)—
(a) provide for the agreement, or obligation to pay the charge, to be
unenforceable or unenforceable to a specified extent;
(b) 45provide for the recovery of amounts paid under the agreement
or obligation;
This afternoon after PMQ's in HoC - Then after 3pm in HoL
Claims Management Services
- 16. Transfer to FCA of regulation of claims management services
- 17. Power of FCA to make rules restricting charges for claims management
services
Part 2 Claims Management Services
16 Transfer to FCA of regulation of claims management services
(1) 20The Financial Services and Markets Act 2000 is amended as follows.
(2) In section 21 (restrictions on financial promotion)—
(a) in subsection (1)—
(i) the words from “to engage” to the end become paragraph (a),
and
(ii) 25at the end of that paragraph insert “, or
(b) to engage in claims management activity.”,
(b) after subsection (10) insert—
“(10A) “Engaging in claims management activity” means entering into
or offering to enter into an agreement the making or
30performance of which by either party constitutes a controlled
claims management activity.
(10B) An activity is a “controlled claims management activity” if—
(a) it is an activity of a specified kind,
(b) it is, or relates to, claims management services, and
(c) 35it is carried on in England or Wales.”, and
(c) after subsection (12) insert—
“(12A) Paragraph 25 of Schedule 2 applies for the purposes of
subsection (10B) with the references to section 22 in sub-
paragraph (3) of that paragraph being read as references to
40subsection (10B).”
(3) In section 22 (regulated activities)—
Financial Guidance and Claims BillPage 12
(a) after subsection (1A) insert—
“(1B) An activity is also a regulated activity for the purposes of this
Act if it is an activity of a specified kind which—
(a) is carried on by way of business in England or Wales,
5and
(b) is, or relates to, claims management services.”, and
(b) in subsection (3) for “subsection (1) or (1A)” substitute “subsections (1)
to (1B)”.
(4) In section 234C (complaints to the FCA by consumer bodies)—
(a) 10in subsection (1), after “financial services” insert “or of a market in
England and Wales for claims management services”, and
(b) in subsection (5)—
(i) in paragraph (a), at the end insert “(and “market in England and
Wales” is to be construed accordingly)”, and
(ii) 15in paragraph (b), after “financial services” insert “, or of a
market in England and Wales for claims management
services,”.
(5) In section 234I (FCA’s functions under Part 4 of the Enterprise Act 2002)—
(a) in subsection (2)(b), after “services” insert “or to the provision of claims
20management services in England and Wales”, and
(b) in subsection (6)(a), after “financial services” insert “or in England and
Wales of claims management services”.
(6) In section 234J(2) (FCA’s functions under the Competition Act 1998), after
“financial services” insert “or relate to the provision of claims management
25services in England and Wales”.
(7) In section 234M(1) (function of keeping market under review), after “services”
insert “and the market in England and Wales for claims management services”.
(8) In section 417(1) (definitions), at the appropriate place insert—
- ““regulated claims management activity” means activity of a kind
30specified in an order under section 22(1B) (regulated activities:
claims management services);”.
(9) After section 419 insert—
“419A Claims management services
(1) In this Act “claims management services” means advice or other
35services in relation to the making of a claim.
(2) In subsection (1) “other services” includes—
(a) financial services or assistance,
(b) legal representation,
(c) referring or introducing one person to another, and
(d) 40making inquiries,
but giving, or preparing to give, evidence (whether or not expert
evidence) is not, by itself, a claims management service.
(3) In this section “claim” means a claim for compensation, restitution,
repayment or any other remedy or relief in respect of loss or damage or
Financial Guidance and Claims BillPage 13
in respect of an obligation, whether the claim is made or could be
made—
(a) by way of legal proceedings,
(b) in accordance with a scheme of regulation (whether voluntary
5or compulsory), or
(c) in pursuance of a voluntary undertaking.
(4) The Treasury may by order provide that a claim for a specified benefit
is to be treated as a claim for the purposes of this section.
(5) The Treasury may specify a benefit under subsection (4) only if it
10appears to the Treasury to be a social security benefit, payable under
the law of any part of the United Kingdom, designed to provide
compensation for industrial injury.
419B Carrying on claims management activity in England or Wales
(1) The Treasury may by order make provision as to the circumstances in
15which a person is, or is not, to be treated as carrying on—
(a) a regulated claims management activity, or
(b) an activity of a kind specified in an order under section 21(10B),
in England or Wales.
(2) Subsections (2) to (5) of section 419 apply in relation to an order under
20subsection (1) as they apply in relation to an order under subsection (1)
of that section, but as if the references to regulated activities in
subsection (2) of that section were references to regulated claims
management activities or, as the case may be, to activities of a kind
specified in an order under section 21(10B).”
(10) 25In section 429 (parliamentary control of statutory instruments)—
(a) in subsection (1)(a) (orders subject to affirmative procedure), for “or
419” substitute “, 419 or 419B”,
(b) in subsection (4)—
(i) in paragraph (e), for “or (10)” substitute, “, (10) or (10B)”,
(ii) 30omit the “or” at the end of paragraph (f), and
(iii) after paragraph (g) insert “; or
(h) it adds one or more activities to those that are
controlled claims management activities for the
purposes of section 21.”, and
(c) 35after subsection (7) insert—
“(7A) An order to which, if it is made, subsection (7B) will apply is not
to be made unless a draft of the order has been laid before
Parliament and approved by a resolution of each House.
(7B) This subsection applies to an order under section 419A(4) if—
(a) 40it is the first order to be made, or to contain provisions
made, under that subsection; or
(b) it adds one or more benefits to those that are specified
benefits for the purposes of section 419A.”
(11) In Schedule 2 (regulated activities)—
(a) 45in paragraph 25 (order making power), in sub-paragraph (1)—
(i) in the opening words for “or (1A)” substitute “to (1B)”;
Financial Guidance and Claims BillPage 14
(ii) in paragraph (f) at the end insert “, including provision which
applies (with or without modification) provision in this Act or
other primary or subordinate legislation that relates to
investment activity or financial services to a regulated activity
5that does not relate to investment activity or financial services.”,
and
(b) in paragraph 26 (parliamentary control), in sub-paragraph (1) for “or
(1A)” substitute “to (1B)”.
(12) Schedule 4 contains provision about transfer schemes where an order is made
10under section 22(1B) of the Financial Services and Markets Act 2000 (inserted
by subsection (3)(a)).
(13) Schedule 5 contains transitional provision relating to this section.
17 Power of FCA to make rules restricting charges for claims management
services
(1) 15The Financial Services and Markets Act 2000 is amended as set out in
subsections (2) and (3).
(2) After section 137FBB insert—
“137FC FCA general rules: charges for claims management services
(1) The power of the FCA to make general rules includes power to make
20rules prohibiting authorised persons from—
(a) entering into a specified regulated claims management
agreement that provides for the payment by a person of charges
which, taken with charges payable under an agreement treated
by the rules as being connected with the regulated claims
25management agreement (if any), are specified charges, and
(b) imposing specified charges on a person in connection with the
provision of a service which is, or which is provided in
connection with, a specified regulated claims management
activity.
(2) 30The FCA must make rules by virtue of subsection (1) in relation to all
regulated claims management agreements, and all regulated claims
management activities, which concern claims in relation to financial
products or services.
(3) The rules must be made with a view to securing an appropriate degree
35of protection against excessive charges for the provision of a service
which is, or which is provided in connection with, a regulated claims
management activity.
(4) The rules may specify charges by reference to charges of a specified
class or description, or by reference to charges which exceed, or are
40capable of exceeding, a specified amount.
(5) In relation to an agreement entered into, or charge imposed, in
contravention of the rules, the rules may (amongst other things)—
(a) provide for the agreement, or obligation to pay the charge, to be
unenforceable or unenforceable to a specified extent;
(b) 45provide for the recovery of amounts paid under the agreement
or obligation;
