About the Claims Standards Council

Aim

To represent its members to the Regulator, government, the legal sector, the insurance industry, banking sector and consumer group and ensure a balanced view of the sector is fully promoted.

History

The Claims Standards Council was established in 2004 in an attempt to unite the industry and allow voluntary regulation of the claims management industry.

This followed two reports that highlighted the many issues concerning the method of operation of some claims management companies. In 2004 a Report by Citizens Advice, No win, no fee, no chance - CAB evidence on the challenges facing access to injury compensation, described some of the problems.

In September 2004, the Better Regulation Task Force (BRTF) published a report Better routes for redress. This highlighted many of the concerns about the methods of some of these companies and made recommendations on how to control these activities and how access to redress might be improved. On 10 November 2004, the Government Response was published.

On claims management companies, BRTF had recommended that the Claims Standards Federation should apply to the Office of Fair Trading [OFT] for approval of its code of practice in which it set out how claims management companies should operate, and that the Federation should work towards the approval of its code by the OFT by September 2005. The government accepted that the successor body to the Claims Standards Federation, the Claims Standards Council (CSC), "appears to provide the opportunity to make significant progress now towards better regulation and to ensure consumer interests are safeguarded".

In March 2005, as support for the CSC self-regulatory proposals were ignored by the claims management industry, the CSC recommended to the government that statutory regulation was the only option.

In a speech on 22 March 2005, the Lord Chancellor expressed disappointment that, despite signs of broad support for the CSC, only a small proportion of claims management companies had joined. He went on to say that "claims management companies have failed to demonstrate anything like the commitment that I would hoped to have seen by now”. He announced that the government would legislate to bring the claims management sector within the regulatory net through legislation on reforming the market for legal services. He envisaged a front-line regulator with oversight by the proposed Legal Services Board. That front-line regulator could be the CSC. He said he would welcome proposals from the CSC on how it intended to develop its current role and what it could do to help deliver the watertight regulatory regime that was required.

On 3 November 2005, the government published the Compensation Bill. The Final Regulatory Impact Assessment provides a comprehensive analysis of the marketplace and the regulatory options.

The government commissioned Mark Boleat to consider whether the Claims Standards Council could be in a position to be the front line regulator. His Report and the Council's Response to it led Ministers to decide that the Council could not be the Regulator.

In July 2006 the Compensation Act became law and the Department for Constitutional Affairs was formally announced as operating the regulator. Mark Boleat was appointed to head up the regulator in co-operation with a team from DCA and Trading Standards.

The CSC has been encouraged to become the recognized trade body for the sector and appointed an executive to sit on the Government's Regulatory Consultative Group whose terms of reference include:

• Advising the DCA on the authorisation, conditions, monitoring and enforcement arrangements and all other aspects of the regulatory regime being established under the Compensation Act 2006
• Advising on the operation of the regulatory regime under the Compensation Act 2006
• Advising on the impact on the claims management services market of the operation of the regulatory regime
• Advising on the operation of the contract with the Monitoring Compliance Unit

The Claims Standards Council gives its members a way to ensure their interests are best represented to the regulator, the government, the legal sector and the insurance industry, by providing a forum for discussion and information that will assist them in their business.