Compensation Bill [HL]

In response to the issue raised by the noble Viscount, we will seek to provide in the regulations as much clarity as we possibly can in order to enable those who genuinely believe, for whatever reason, that they should be exempt to put forward their case. By designing this provision in the way that we have—I have described it before as a funnel—we hope to capture on the face of the Bill the broadest possible population, if I may describe it as such, and ensure that the exempt regime is much more flexible. That will enable us to exempt those organisations which should be exempted—and I have dealt with the question of those who are already regulated and therefore should not be subjected to double regulation—and those voluntary organisations that we may wish to exempt for other reasons. We want to be as clear as we can be in order to avoid any challenge. I shall think very carefully about what the noble Viscount, Lord Eccles, has said because it is important. The way in which we have set out the legislation on exemptions is intended to capture different sets of circumstances. Take, for example, Clause 4(2)(c)—"““by a specified person or class of person in specified circumstances””—" and its application to the FSA. Obviously we might wish to exempt companies regulated by the FSA, for the reasons I have already given, but only in so far as their activities are regulated by the FSA. The same applies to trade unions. This is about the ability to exempt in appropriate circumstances those organisations or companies which should be exempted, specifically and particularly because of the desire to avoid regulating them twice. I agree that the whole question of the standard of service provided is important. As Members of the Committee know, we want initially to target everything we do on the completely unregulated claims companies which have been exploiting customers and others in the claim process for far too long. We have proposed a framework which we think will do that in the most effective and proportionate way. We intend to focus our new mechanisms on those sectors and those providers where the risk to the consumer is at its highest. The standard of service provided by candidates for exemption will be a key consideration. Obviously the Secretary of State will want to be certain that those providing claims management services outside the regulatory net would provide adequate consumer protection. Under the current provisions, the Secretary of State would not in practice exempt anyone unless he was satisfied that the person would be likely to meet similar standards to those who have been authorised to provide claims management services. The noble Lord’s amendment would make this explicit in the Bill. I am not entirely convinced it is necessary but I acknowledge that it offers the opportunity to provide some additional comfort to those concerned about exemptions. It might also make crystal clear that exemptions could and would be removed if the exempted person failed to continue providing an adequate service. That is an important aspect. I am not sure that we can use the words ““at least the same standards to apply”” as many of those exempted will be providing possibly a different type of service which may not be comparable in all respects. But I accept the principle behind what the noble Lord is seeking to do and, if the noble Lord and the Committee are willing, I shall consider the matter further with parliamentary counsel ahead of the Report stage. I entirely accept the essence of what the noble Lord is seeking but I need to look carefully at how we can achieve it. I hope that that will go quite a long way towards developing the kind of provision the noble Lord seeks—we all recognise that standards are critical in this—and enhance the clause itself. As I have indicated, we are looking at different circumstances for exemptions. We want the regulator to play a role in that but with a clear understanding of who and why we are exempting. If we add into that what the noble Lord has indicated, we will have an additional safeguard, if I can describe it as such, which could be very important. I am grateful to the noble Lord for raising the matter and I will take it away on that basis.