Claims Standards Council proposes restrictions for claims farmers

Claims management firms will not be allowed to 'cold call' prospective claimants under new proposals from the Claims Standards Council (CSC).

The proposals set out a code of conduct for firms dealing with the public, as well as a 'commercial code' setting out rules for companies within the personal injury claims market.

Industry sources said the CSC would present the proposals to the Department for Constitutional Affairs this week, and it had already submitted the rules to the Office of Fair Trading for approval.

Under the proposed rules, CSC members will be banned from dealing with cases arising from door-to-door selling, unsolicited phone calls, or from cases found through staff stopping members of the public in the street.

Other proposals include the introduction of an internet-based 'FastTrak' system, for cases where compensation is likely to be less that £15,000, no after-the-event policy has been sold for the claim, and the insurer has agreed to "resolve liability issues at an early stage".

Membership fees, financial requirements, competency and training standards, complaints handling procedures, and the structure of the CSC are detailed in the code.

The CSC has also set out discipline and enforcement procedures for members, but procedures for monitoring and investigating have yet to be finalised.

Brian Raincock, Law Assist chairman and a CSC director, said the rules were the CSC's response to the recommendations of the Better Regulation Taskforce, setting a benchmark for industry conduct.

He described the proposals as a "starting point" for the development of the final rules, with the end of the year being a possible target for their finalisation.

Raincock said the enforcement of the rules needed further development. "The policing of the rules is one of the most difficult areas to set out. We need to set out how they are going to be enforced."