Compensation Bill [HL]

My Lords, I appreciate the concern expressed by the noble Viscount, Lord Eccles, that we ensure appropriate penalties are imposed for committing the offences. We want to ensure that the penalties are sufficiently stringent to act as a deterrent to those who show a flagrant disregard of the regulatory regime. We should not underestimate the harm that can be done to consumers by disreputable claims farmers. Some of the most vulnerable people in our society are targeted and can be left seriously disadvantaged. They are talked into signing agreements that they do not understand and, in some cases, are encouraged to purchase insurance which is not appropriate for them. I want to reassure the noble Viscount that the penalty of imprisonment is intended only for the most serious cases; for example, where an individual repeatedly and persistently offends. Where that is the case, it is appropriate and proportionate, and is similar to the penalties imposed for contravening a prohibition under similar regulators, such as the Financial Services Authority. I hope that my explanation of the way in which we would use that penalty answers the noble Viscount’s point. We want to keep the opportunity to use it for those who flagrantly and repeatedly abuse the system. I hope that the noble Viscount will feel able to withdraw his amendment on that basis.