Christina Rees Shadow Minister (Justice):
To ask the Secretary of State for Justice, if she will assess the potential merits of banning claims management companies.
Oliver Heald The Minister of State, Ministry of Justice:
The government recently consulted on measures to reform the whiplash claims process, and sought feedback on whether any specific measures should be put in place in relation to claims management companies (CMCs) operating in the personal injury sector. This important consultation closed on 6 January 2017. The Government has undertaken to publish its response to the consultation by 7 April.
The government commissioned a fundamental review of the regulation of CMCs which reported in 2016. Carol Brady considered the regulation and role of CMCs and concluded that a tougher regulatory regime should be established. The government has committed to strengthening regulation further by transferring responsibility to the Financial Conduct Authority with powers to require all CMCs to be re-authorised and to hold managers of CMCs directly accountable for the actions of their businesses.