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Direct Access and Referral Barrister.
at St Pauls Chambers, Leeds & Gough Square Chambers, London

Personal Injury CMC boss receives short custodial sentence

The Director of Direct Assist, one of the country’s leading claims management companies, pleaded guilty to fraudulent removal of approximately £50,000 following the insolvency of the company, and failing to cooperate with the Liquidator, at Bolton Crown Court on Wednesday 21st November 2018.

The prosecution brought by the Insolvency Service, originally charged Mr Bullough with a number of offences including failure to prepare and submit company records. At trial the Defendant pleaded guilty to two offences which took the matter into a lower sentencing category which was considered by the Judge, HH Judge Stead.

Although the Judge imposed a short custodial sentence of 21 months for the offences, he declined to suspend the operation of the sentence. 

For more details, see the Bury Advertiser report 15th November below

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MOJ Clamp down on Claims Management Firms with help from SRA

On 12th September, we reported on an investigation by the Ministry of Justice in respect of alleged breaches of the Compensation      (Claims Management Services) Regultions 2006 and the Conduct of Authorised Persons Rules 9 (2013).

The MOJ has now published details of all of their investigations under these new 2013 rules. Further guidance published in October shows that the MOJ is working together with the SRA in this sector.

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CMC fined √Ǭ£850k for ‘nuisance calls’

The Claims Managament Regulator, part of the MOJ, today announced a record fine of £850,000 in respect of The National Advice Clinic, based in Lancashire, which also trades as the Industrial Hearing Clinic or the Central Compensation Office, who made nearly 6 million calls between October 2014 and April 2015 about noise induced hearing loss claims.√جª¬ø

The fines were imposed following representations made by Jeremy Barnett, instructed by Andrew Swan, Head of Regulation and Financial Crime at Short Richardson & Forth LLP, Newcastle. The Company are considering whether or not to appeal to the fines to the First Tier Tribuanal.

The fines follow the introduction of new powers which were set out in blog article 25th September 2015.

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FCA new approach to Claims Management Regulation.

FCA new approach to Claims Management Regulation.

In April 2019 the FCA became the new regulator of Claims Management businesses [CMCs]. At the same time the Financial Ombudsman Service became responsible for resolving customer disputes about CMSs. In June 2018 the FCA issued a consultation paper (CP 18/15) which proposed a new Claims Management: Conduct of Business Sourcebook [CMCOB] and to apply relevant parts of the existing FCA Handbook.

This is a complex area of law as it involves matters that touch upon SRA regulation (in respect of ABS and Referral Fee rules), FCA principles, Data Protection and GDPR matters (in particular consent) and also the previous Claims Management Conduct of Authorised Persons rules 2018.

The government are clearly determined to take steps to regulate a sector that has been portrayed by the press as being out of control following the failure of the old Regulator the CMRU to deal with concerns. The new CMCOB will bring in a number of new powers that will no doubt be tested by investigations and precedent tribunal decisions.

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