Compensation Bill [HL]

I started to say to the noble Lord, Lord Hunt, that I agree with the spirit of the amendment and that we are looking to see where best to deal with this. The noble Lord rightly said that fees charged for claims management services could impact significantly on the consumer and that that is where some of the worst abuses by claims companies have taken place. He rightly indicated the desire of all Members of the Committee and, indeed, all Members of the House, to tackle this for some of the most vulnerable people, who have been caught. So there is no difference between us on that and, as I explained at Second Reading, charges or fees for providing claims management services must be made clear to the claimant at the outset and be proportionate to the amount of work involved. Consumers should also be advised of any changes in the fees or charges. It will be key to the success of the regulation that consumers are not disadvantaged by the extortionate charges or fees that have been associated with some companies. It will be important that we ensure that fees and charges made for services are fair and reasonable. In Committee I have undertaken to consider Amendment No. 39, tabled by the noble Lord, Lord Goodhart, which would add to the criteria for designating the regulator a requirement that he must be competent to ensure claims management services are provided ““economically and efficiently””. We are considering drafting such a requirement with parliamentary counsel, but one of the key principles of regulation is to ensure that charges are proportionate and made clear at the outset. We are also considering putting a clear requirement in the criteria for authorisation about the need for transparency of charges—that is a matter that the noble Lord, Lord Hunt, has raised previously, and with which I completely agree. As the noble Lord said, it is important that where there is a free alternative, clients are made fully aware of that, so they can make choices. We have already discussed in Committee the fact that clients may decide to pay a fee because they are concerned about the level of service. That is entirely up to them, but their decision must be taken with the best possible information. The noble Lord and I agree completely that this is a fundamental part of the necessary work. We are simply looking at where best to put the different elements. The regulator will have to consult on the rules and the code of practice and I can be clear that where a code of practice is being established, the Secretary of State and my noble and learned friend would need to include this much-needed consumer protection. So we are in complete agreement on the principle. Between now and the next stage of the Bill we will be looking at precisely where we will put the different elements, where we can achieve complete agreement on what needs to be covered, and we will discuss that with Members of the Committee. Hopefully, we can reach agreement before the next stage, because there is nothing between us on this.