Mark Boleat says the Compensation Act has not only drastically reduced claims farming and unauthorised marketing in UK hospitals, it has made crash scams a riskier business, too

The implementation of the Compensation Act has dealt a severe blow to cold calling and claims farming in hospitals.

According to Mark Boleat, head of regulations at the Ministry of Justice (MoJ), the act has reduced unauthorised marketing activities in hospitals by between 80% and 90%.

He also says the issue of accident management companies and contrived accidents have become a priority for the claims regulator.

Two businesses have already been refused authorisation due to suspected involvement in ‘cash for crash’ scams, and a number of “significant targets” are under investigation.

“We have a strategy for dealing with contrived accidents, involving close cooperation with other enforcement agencies and the insurance industry.”

Boleat adds that malpractice by companies handling claims against the Criminal Injuries Compensation Authority have been substantially reduced and that misleading claims of ‘no win, no fee’ have “largely been eliminated”.

“Rules that are not enforced call into question the credibility of regulation

Mark Boleat, MoJ

He also points to the successful enforcement of electronic commerce and Companies Act regulations, which stipulate that business websites have physical addresses and disclose their authorisation numbers.

“If you look at a claims management company website, you will see lots of asterisks with qualifications,” Boleat says. “We are probably ahead of most British industry and commerce in that respect.”

But, he notes, it is too early to declare victory, pointing out that being authorised and causing illegal activity are not the same thing.

“Rules that are not enforced are worse than no rules,” he says. “They simply give those companies engaged in malpractice a halo of respectability and call into question the credibility of regulation.

“People are not going to walk the streets hammering on doors for business – unless they can sell it.”

Legislation requiring claims management companies gain authorisation to operate came into effect in April and around 1,300 businesses have sought authorisation from the MoJ since November.