Lord Hunt says the appointment of Mark Boleat as claims regulator is a triumph, but beware the detail of his remit

The end is nigh for the claims farmers' free-for-all. From early next year, claims management companies (CMCs) will all have to be authorised, and there will be significant compliance requirements for them once they have been. Any unauthorised person offering claims management services will be committing an offence and will be liable to up to two years' imprisonment.

Throughout the passage of the Compensation Bill (now Act), Baroness Ashton - the sponsoring minister from the Department of Constitutional Affairs - emphasised her aspiration to have the new regulatory regime up and running by the autumn. That always seemed ambitious, and the new system will be phased in between now and April.

A head of regulation has, however, already been appointed - Mark Boleat, the former director general of the ABI who produced an influential report on the sector last year. No one could be better qualified.

Draft regulations for CMCs are also being finalised, after a public consultation. I still have a few concerns about these.

In future, every regulated CMC will be required to have its own complaints procedure, with a process of appealing to the regulator serving as a safety net. I was slightly perturbed, however, to learn the regulator may not have powers to order compensation to a claimant.

What about cases where clear mistakes have been made: will consumers have to resort to law again for recompense?

It also seems there will be no immediate requirement for CMCs to have professional indemnity (PI) insurance or bonding, something for which I called during the passage of the Bill. Bonding is straightforward and PI insurance would surely be readily available. I fail to see how else we can ensure full consumer protection.

There is also a debate around whether the regulations should exclude third-party capture by liability insurance companies. Sometimes, when a claimant has been injured by a policyholder, the insurer may contact the claimant directly to offer services such as rehabilitation. There is a suggestion that this might be regarded as a form of claims management service, although this was never the sort of behaviour targeted by parliament.

A consumer dealing with an FSA-regulated liability insurer is in a very different position from someone dealing with a claims management company. He or she will not be tied into certain financial products, such as credit agreements and insurance policies. Insurers should be positively encouraged to come forward with offers of treatment and other redress: that was why I moved the "apology" amendment which became s.2 of the Act.

I also believe regulations should enforce a 14-day "cooling-off" period, during which consumers would have the right to consider the bargain they have made and withdraw from it without any financial consequences. This would give everyone the opportunity to seek advice on the contract terms and then revert to the company to confirm whether or not they wish to pursue a claim.

This has been a long campaign, fought by a broad spectrum of supporters, and I am delighted that regulation of CMCs is imminent at last. As so often, however, the devil is in the detail and we must all hope these regulations really cover the waterfront. This must be a brave new dawn, not a damp squib. IT

' Lord Hunt of Wirral is chairman of the financial services division at Beachcroft, and deputy president-elect of the CII