The Lord Chancellor will shoulder the burden of regulating the compensation management sector until...

The Lord Chancellor will shoulder the burden of regulating the compensation management sector until a regulatory body can be appointed, it was revealed at the launch of the Compensation Bill.

Secretary of State for Constitutional Affairs and Lord Chancellor, Lord Falconer, said the Bill was designed to control the emergence of cowboy claims companies and give consumers greater confidence that they are not being “ripped off”.

The proposed legislation outlines the penalties for any unauthorised person offering claims management services not already regulated by bodies such as the Financial Services Authority and the Law Society.

Lord Falconer stated that it could be 12 months before a regulator is installed.

The Bill also places an onus on courts to consider the wider social value of an activity when dealing with negligence claims, building on existing High Court practices.

Falconer said: “It is time to put the brakes on the cowboy claims companies which take advantage of the public. Responsible firms are suffering from the reputations of the mavericks that give good claims management companies a bad name.”

Parliamentary Under Secretary of State Baroness Ashton said the Bill was one part of a range of measures the government was taking to address the perception of the compensation culture.

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