Compensation Bill [HL]

moved Amendment No. 28:"Page 2, line 4, after second ““services”” insert ““provided to persons resident in England or Wales””" The noble Lord said: This amendment is an attempt to address the problem of services being provided to people in England and Wales by claims management companies operating from outside the United Kingdom. Under the amendment, the Bill would read at page 2, line 4:"““‘claims management services’ means advice or other services provided to persons resident in England and Wales in relation to the making of a claim””." We anticipate that one of the consequences of what the Minister and the Government are doing will be to drive some of the people that we really want regulated into jurisdictions where they feel that they will not be subjected to such a severe regime. That may already be happening, of course, as claims management companies attempt to avoid regulation. I would be very interested to hear from the Minister what is currently happening in the European Union, because Article 60 of the Treaty of Rome provides that services may be provided in another member state on a temporary basis on the same terms as provided in their own member state—the ““country of origin”” principle. It applies to cross-border transactions when there is no move to establish a working base in the other member state. The provider of services will be regulated in those member states where they have ““established”” and not in a state where they simply provide temporary services on a remote basis. The proposed directive on services will cover both legal and fiscal advice in situations where service is provided at a distance via the telephone and/or Internet services. So claims management services would be included. The directive seeks to promote a common standard for all types of service, rather than limited harmonisation. Directives have so far covered areas as diverse as postal services and professional qualifications. The Financial Services and Markets Act 2000 specifically extends jurisdiction to the Isle of Man and the Channel Islands. I would welcome the Minister’s advice on whether that might be possible here. The Bill does not extend to Scotland. Will we see claims farmers simply resorting to hill farming or such like? I flag all this simply to make the point that if a claims management company in another member state is providing services in England and Wales, there is likely to be an obstacle to effective regulation in this country. If we can spot this loophole, I am sure that the claims management companies will already have done so. So the intention behind the amendment is to seek reassurance that the Government have considered the impact that the provision of cross-border services may have. It is essential that the new framework does everything possible to catch all those who seek to sell services to people in this country. I understand that the Claims Standards Council has flagged on its website the problem of companies and individuals already operating from bases in Fuengirola and South Africa and therefore outside the control of the Advertising Standards Authority. So we are dealing with an industry that has a history of avoidance—indeed, evasion—and we cannot tolerate such a glaring loophole if it can possibly be closed. We would be interested to know how the Advertising Standards Authority has responded in the case of those who are extending their activities from Fuengirola and South Africa. As the adverts are being introduced in England and Wales, can it not regulate on that basis? If it cannot, there is a problem that ought to be dealt with. Does the Advertising Standards Authority have a dialogue going on with the Internet service providers? It would be interesting to know what is happening about all this. Do we already have this problem, and, if so, should not the Bill address the standards that will apply to advertising in this industry, wherever those claims management services are based, albeit temporarily, which are targeted at individuals? The Committee will be aware that we receive e-mails from all over the world and we cannot tell where they are coming from. Many purport to come from Nigeria, but I understand that they do not. You cannot track down from where unsolicited e-mails are coming. There is a problem of enforcement as well as of jurisdiction. So I hope that the noble Baroness understands that I do not underestimate the difficulties. She may well say that there is only so much that the Government can do to tackle those who are determined to find a way round the system and have enormous ingenuity to enable them to do so, but I hope that she will understand that I am reluctant to ignore that key point. If we can, I want us to send the right message about the effect of the Bill to ensure that there will be no hiding place. In earlier contributions, I have already given an overall impression of the industry. It strikes me as one that will try to find a way through even before the regulation is in place. I look forward to hearing the Minister’s response and I beg to move.