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A change in CMC regulation

Last month the Ministry of Justice published two notable documents: Claims management regulation: Conduct of Authorised Persons Rules 2018 is statutory guidance which sets out the rules for authorised companies offering claims management services. It covers the standards for running a business and dealing with clients and became effective from 1st April 2018. Guidance note on the Conduct of Authorised Persons Rules 2018 gives detailed guidance for CMC’s on complying with the conduct rules. Advice on complying with the Conduct of Authorised Persons Rules 2018 is provided including a ban on charges where it is identified that the client does not have a relationship or relevant policy; a ban on upfront fees for financial products and services claims; and a requirement for reasonable cancellation charges and itemised bills as well as amendment of three specific rules. Amongst other matters, the rules require CMC’s to take all reasonable steps to investigate the existence and merits of each element of a potential claim before presenting it to a third party, and substantiate and evidence the basis of the claim to ensure it is not fraudulent, false or misleading.

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