UK Parliament / Open data

Compensation Bill [Lords]

Proceeding contribution from Bridget Prentice (Labour) in the House of Commons on Thursday, 8 June 2006. It occurred during Debate on bills on Compensation Bill (HL).
I shall not comment on the individual company that my hon. Friend mentions as I do not know the details, but he is right to point out that it is scandalous, and a scam, when people think that their case is being made on the basis of their understanding of no win, no fee, but discover that because they signed up for an insurance premium they are paying back large amounts over a long period to companies that make large profits as a result. Part 2 provides a proportionate and responsive framework for regulating the industry. Clause 3 defines claims management services and provides an order-making power to target the regulation in specific areas. Companies will need to seek authorisation only if they are providing a regulated claims management service. We intend to provide by order that the regulated services include personal injury, mis-selling of financial products, employment, criminal injury compensation and housing disrepair. The Bill is flexible. It allows new areas to be brought into the regulatory net as problems arise and it will allow areas to be removed from regulation if the problems subside. Clause 4 allows a range of options for delivering regulation. We want an efficient solution that will be effective for the benefit of consumers. We are entering a period of considerable change in the legal services market. Last month I published a draft Legal Services Bill, which will reform the regulatory structure of legal services. I expect the regulation of claims management services eventually to be integrated into that structure. Another uncertainty is the impact of statutory regulation on claims management companies. I have to tell the House—in a sense this reflects the point raised by the hon. Member for Kettering (Mr. Hollobone)—that that is unpredictable. Recent analysis by Datamonitor predicts that the industry might shrink considerably, because once stringent regulatory standards are applied, false claims will, by their nature, disappear. In the short term, we need a flexible solution that can tackle the worst abuses. A longer-term solution can then be found once the landscape is more certain and we can have a more considered look at it.
Type
Proceeding contribution
Reference
447 c426 
Session
2005-06
Chamber / Committee
House of Commons chamber
Back to top