In mid-September 2017, the Claims Management Regulator at the Ministry of Justice (MoJ), announced that it had cancelled the authorisation of Huddersfield-based claims management company (CMCs) UK 4 Legal Limited, as well as that of Salford-based CDW Bureau Limited. Both companies handled claims relating to financial services, with UK 4 Legal also taking on personal injury work.

As with many CMCs who have seen their permissions cancelled as a result of compliance breaches, the MoJ found a number of issues with UK 4 Legal’s marketing practices. However, the Regulator also identified concerns with the competence of both senior management and other staff at the company.

Similar issues were identified at CDW Bureau, together with some additional issues over how the company was handling complaints.

Both companies breached the following sections of the MoJ’s Conduct of Authorised Persons Rules 2014:

  • General Rule 2d – the requirement to maintain appropriate records and audit trails
  • General Rule 2e – ensuring that all referrals, leads or data from third parties have been obtained in accordance with the requirements of the legislation and the MoJ’s Rules
  • General Rule 3 – which stipulates that companies must be directed by senior management who are competent and who understand the applicable legislation and rules they must abide by
  • General Rule 4 – which requires staff working for the firm to have the necessary training and competence

UK 4 Legal also breached Client Specific Rule 9, which explains that it is the responsibility of the authorised CMC to ensure that any publicity issued on its behalf by a third party complies with the relevant rules.

CDW Bureau Limited also breached the following sections of the Conduct of Authorised Persons Rules 2014:

  • General Rule 2c – which requires that claims referred to any recognised Ombudsman, or other dispute resolution scheme, must comply with those organisations’ procedures, must be specifically tailored to the individual circumstances of a claim, and must take account of relevant past decisions made by that dispute resolution service
  • General Rule 2f – which asks companies to have procedures in place to identify vulnerable customers, and to ensure that they are appropriately protected
  • General Rule 8 – the requirement to operate a complaints scheme that meets the MoJ’s Rules in this area
  • General Rule 11 – the requirement to comply with the monitoring and enforcement arrangements of the Regulator
  • Client Specific Rule 1 – the generic requirement to act fairly and reasonably in dealings with all clients
  • Client Specific Rule 2- a stipulation that services offered to clients must meet their needs, and satisfy the requirements of the Rules
  • Client Specific Rule 6d – which prevents CMCs from stating or implying that the company has been specifically approved by the government, or is connected with a government agency or regulator
  • Client Specific Rule 19 – the requirement to provide prompt advice to a client about any requirements concerning their claim, such as the need to provide additional information

Finally, CDW Bureau was found to have breached Complaints Handling Rule 18 of the MoJ’s Complaints Handling Rules 2015. This requires CMCs to maintain records of all complaints received, and to make these available to the Regulator on request.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.