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The Financial Services and Markets Act 2000 (Claims Management Activity) Order 2018

Type Statutory-Instrument

Publication 2018-11-28

Last updated 2019-04-01

State In force

Department King's Printer of Acts of Parliament

Source legislation.gov.uk

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Made: 28th November 2018

Coming into force in accordance with article 1(2) and (3)

In accordance with section 429(1), (3), (4) (d) and (e), (7A) and (7B)[^f00005] of, and paragraph 26(2) of Schedule 2 to, the 2000 Act, a draft of this Order has been laid before and approved by a resolution of each House of Parliament.

PART 1 — Introductory provisions

Citation, commencement, interpretation and extent

1

(1) This Order may be cited as the Financial Services and Markets Act 2000 (Claims Management Activity) Order 2018.

(2) This Order comes into force on the day after the day on which it is made for the purpose only of—

(a) enabling the Financial Conduct Authority—

(i) to make rules;

(ii) to give guidance;

(iii) to impose requirements or make directions;

(iv) to approve rules;

(v) to make a designating instrument pursuant to article 85;

(vi) to claim legal professional privilege or, in Scotland, confidentiality of communications pursuant to article 87; and

(b) enabling the Financial Ombudsman Service—

(i) to make rules;

(ii) to make standard terms; and

(iii) to claim legal professional privilege or, in Scotland, confidentiality of communications pursuant to article 87.

(3) This Order comes into force on 1st April 2019 for all other purposes.

(4) In this Order “the 2000 Act” means the Financial Services and Markets Act 2000.

(5) Subject to paragraph (6), this Order extends to England and Wales and Scotland.

(6) Articles 90, 93, 95, 96, 101, 102 and 103 extend to England and Wales only.

Carrying on a regulated claims management activity in Great Britain

2

(1) A person is to be treated as carrying on a regulated claims management activity in Great Britain when the activity is carried on—

(a) by a person who is—

(i) an individual who is ordinarily resident in Great Britain; or

(ii) a person, other than an individual, who is constituted under the law of England and Wales or Scotland; or

(b) in respect of a claimant or pursuer, or potential claimant or potential pursuer who is—

(i) an individual who is ordinarily resident in Great Britain; or

(ii) a person, other than an individual, who is constituted under the law of England and Wales or Scotland.

(2) For the purposes of this article—

(a) a person is “ordinarily resident” in Great Britain if that person satisfies the requirements of the Statutory Residence Test as set out in Schedule 45 to the Finance Act 2013[^f00006] either—

(i) at the time of the facts giving rise to the claim or potential claim; or

(ii) at the time when the regulated claims management activity is carried out in respect of that claimant or pursuer or potential claimant or potential pursuer;

(b) the references to the “the UK” in the Statutory Residence Test in Schedule 45 are to be read as if they were expressed as references to “Great Britain”.

PART 2 — Amendments to secondary legislation made under the 2000 Act

The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001

3

The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001[^f00007] is amended as follows.

4

In article 4 (specified activities: general), after paragraph (2A)[^f00008] insert—

(2B) The kinds of activity specified in Part 3B are specified for the purposes of section 22(1B) of the Act (and accordingly any activity of one of those kinds, when carried on by way of business in Great Britain, is a regulated activity).

5

In article 64 (agreeing to carry on specified kinds of activity) for “or Part 3A” substitute “, Part 3A or Part 3B”.

6

In article 72A (information society services), after paragraph (1) insert—

(1A) For the purposes of paragraph (1), “activity” includes regulated claims management activities of a kind specified by articles 89G to 89M.

7

After Part 3A[^f00009] insert—

(89F) (1) A claims management activity is a specified kind of activity when it is an activity specified in any of articles 89G to 89M. (2) For the purposes of this Part— (a) “claimant” includes, in civil proceedings in Scotland, a pursuer; (b) “defendant” includes, in civil proceedings in Scotland, a defender; (c) “personal injury claim” means a claim for personal injury within the meaning of the Civil Procedure Rules 1998[^f00010] in England and Wales and an action for damages for, or arising from, personal injuries within the meaning set out in section 8(7) of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018[^f00011] in Scotland; (d) “financial services or financial product claim” includes a claim made under section 75 of the Consumer Credit Act 1974[^f00012]; (e) “housing disrepair claim” means a claim under section 11 of the Landlord and Tenant Act 1985[^f00013] or section 4 of the Defective Premises Act 1972[^f00014] in England and Wales or an application in respect of the repairing standard under section 22 of the Housing (Scotland) Act 2006[^f00015], or claims in relation to the disrepair of premises under a term of a tenancy agreement or lease or under the common law relating to nuisance or negligence, but does not include claims for statutory nuisance under section 82 of the Environmental Protection Act 1990[^f00016]; (f) “a claim for a specified benefit” means a claim for one of the following benefits— (i) industrial injuries benefit, within the meaning given by section 94 of the Social Security Contributions and Benefits Act 1992[^f00017]; (ii) any supplement or additional allowance, or increase of benefit or allowance to which a recipient of an industrial injuries benefit may be entitled under that Act or any other Act; (iii) a benefit under a scheme referred to in paragraph 2 or 4 of Schedule 8 to that Act; or (iv) a benefit under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979[^f00018]. (g) “criminal injury claim” means a claim under the Criminal Injuries Compensation Scheme established under the Criminal Injuries Compensation Act 1995[^f00019]; (h) “employment related claim” includes a claim in relation to wages and salaries and other employment related payments and claims in relation to wrongful or unfair dismissal, redundancy, discrimination and harassment; (i) “investigating” means carrying out an investigation into, or commissioning the investigation of, the circumstances, merits or foundation of a claim; and (j) “representing” means representation in writing or orally, regardless of the tribunal, body or person before which or to whom the representation is made. (3) A person is to be treated as carrying on a regulated claims management activity in Great Britain when the activity is carried on— (a) by a person who is— (i) an individual who is ordinarily resident in Great Britain; or (ii) a person, other than an individual, who is constituted under the law of England and Wales or Scotland; or (b) in respect of a claimant or potential claimant who is— (i) an individual who is ordinarily resident in Great Britain; or (ii) a person, other than an individual, who is constituted under the law of England and Wales or Scotland. (4) For the purposes of this article— (a) a person is “ordinarily resident” in Great Britain if that person satisfies the requirements of the Statutory Residence Test as set out in Schedule 45 to the Finance Act 2013[^f00020] either— (i) at the time of the facts giving rise to the claim or potential claim; or (ii) at the time when the regulated claims management activity is carried out in respect of that claimant or potential claimant; (b) the references to the “UK” in the Statutory Residence Test in Schedule 45 are to be read as if they were expressed as references to “Great Britain”. (89G) (1) Each of the following is a specified kind of activity when carried on in relation to a claim of a kind specified in paragraph (2)— (a) seeking out persons who may have a claim, unless that activity constitutes the communication of an invitation or inducement to engagement in claims management activity within the meaning of section 21 (restrictions on financial promotion)[^f00021] of the Act; (b) referring details of— (i) a claim or potential claim; or (ii) a claimant or potential claimant to another person (including to a person having the right to conduct litigation); and (c) identifying— (i) a claim or potential claim; or (ii) a claimant or potential claimant. (2) The kinds of claim are— (a) a personal injury claim; (b) a financial services or financial product claim; (c) a housing disrepair claim; (d) a claim for a specified benefit; (e) a criminal injury claim; and (f) an employment related claim. (89H) Each of the following activities is a specified kind of activity when carried on in relation to a personal injury claim— (a) advising a claimant or potential claimant; (b) investigating a claim; and (c) representing a claimant. (89I) Each of the following activities is a specified kind of activity when carried on in relation to a financial services or financial product claim— (a) advising a claimant or potential claimant; (b) investigating a claim; and (c) representing a claimant. (89J) Each of the following activities is a specified kind of activity when carried on in relation to a housing disrepair claim— (a) advising a claimant or potential claimant; (b) investigating a claim; and (c) representing a claimant. (89K) Each of the following activities is a specified kind of activity when carried on in relation to a claim for a specified benefit— (a) advising a claimant or potential claimant; (b) investigating a claim; and (c) representing a claimant. (89L) Each of the following activities is a specified kind of activity when carried on in relation to a criminal injury claim— (a) advising a claimant or potential claimant; (b) investigating a claim; and (c) representing a claimant. (89M) Each of the following activities is a specified kind of activity when carried on in relation to an employment related claim— (a) advising a claimant or potential claimant; (b) investigating a claim; and (c) representing a claimant. (89N) (1) There is excluded from articles 89G to 89M any activity which is carried on in England and Wales by— (a) a legal practitioner; (b) a firm, organisation or body corporate that carries on the claims management activity through a legal practitioner; or (c) an individual who carries on the claims management activity at the direction of, and under the supervision of, a legal practitioner who is— (i) that individual’s employer or fellow employee; or (ii) a director of a company, or a member of a limited liability partnership, that provides the service and is that individual’s employer. (2) For the purposes of paragraph (1) “legal practitioner” means— (a) a solicitor or barrister of any part of England and Wales or Northern Ireland; (b) a Fellow of the Chartered Institute of Legal Executives; (c) a European lawyer, as defined in the European Communities (Services of Lawyers) Order 1978[^f00022] or the European Communities (Lawyer’s Practice) Regulations 2000[^f00023]; (d) a registered foreign lawyer, as defined in section 89(9) of the Courts and Legal Services Act 1990[^f00024]; (e) any other member of a legal profession, of a jurisdiction other than England and Wales, that is recognised by the Law Society of England and Wales or the General Council of the Bar as a regulated legal profession. (3) There is excluded from articles 89G to 89M any activity which is carried on in Scotland by— (a) a legal practitioner; (b) a firm, organisation or body corporate that carries on the claims management activity through or under the supervision of a legal practitioner where that firm, organisation or body corporate is— (i) a firm of solicitors; (ii) an incorporated practice; or (iii) a licensed legal services provider and the activity is a legal service as defined within section 3 of the Legal Services (Scotland) Act 2010[^f00025]. (4) For the purposes of paragraph (3) “legal practitioner” means— (a) a person who is qualified to practise as a solicitor under section 4 of the Solicitors (Scotland) Act 1980[^f00026]; (b) an advocate who is a member of the Faculty of Advocates; (c) a European lawyer as defined in the European Communities (Services of Lawyers) Order 1978 or the European Communities (Lawyer’s Practice) (Scotland) Regulations 2000[^f00027]; or (d) a registered foreign lawyer within the meaning of section 65 of the Solicitors (Scotland) Act 1980. (5) But an activity mentioned in paragraph (1) or (3) is only excluded from articles 89G to 89M if the legal practitioner concerned carries on the claims management activity in the ordinary course of legal practice pursuant to the professional rules to which that legal practitioner is subject. (6) The exclusions in this article are to be read as if they were expressed as exemptions for the purposes of the following provisions of the Financial Guidance and Claims Act 2018— (a) section 32(5)(b) (PPI claims: interim restriction on charges imposed by legal practitioners after transfer of regulation to the FCA); and (b) section 33(11) (legal services regulators’ rules: charges for claims management services). (89O) (1) There is excluded from articles 89G to 89M any activity carried on by a charity or a not-for-profit agency. (2) In this article “charity” means— (a) a charity as defined by section 1(1) of the Charities Act 2011[^f00028] or the Charities and Trustee Investment (Scotland) Act 2005[^f00029]; or (b) a body registered in the Scottish Charity Register. (3) In this article “not-for-profit agency” means a body that by or under its constitution— (a) is required to apply the whole of its net income, and any expendable capital, after payment of outgoings for charitable or public purposes; and (b) is prohibited from distributing, directly or indirectly, any part of its net income by way of profits or its assets among any of its members. (4) But a body is not prevented from being a not-for-profit agency for the purposes of paragraph (3) if its constitution permits— (a) the payment, out of the body’s funds, of reasonable and proper remuneration for goods or services supplied to the body by a member; or (b) in the case of a not-for-profit body that is a charity, the payment to a member to which the member is eligible because that member is a beneficiary of the charity; or (c) the purchase, out of the body’s funds, of indemnity insurance for trustees of the body. (89P) There is excluded from articles 89G to 89M any activity carried on by— (a) any person established or appointed by virtue of an enactment; (b) an Independent Complaints Reviewer; or (c) an Independent Case Examiner in the course of carrying out that individual’s duties. (89Q) There is excluded from articles 89G to 89M any activity carried on by the Motor Insurers’ Bureau in the course of carrying on its functions (being the company limited by guarantee mentioned in section 95(2) (notification of refusal of insurance on grounds of health) of the Road Traffic Act 1988[^f00030]). (89R) There is excluded from articles 89G to 89M any activity carried on by— (a) the Medical Protection Society Limited for its members; (b) the Medical Defence Union Limited for its members; or (c) the Medical and Dental Defence Union of Scotland Limited for its members. (89S) (1) There is excluded from articles 89G to 89M any activity carried on by an independent trade union for – (a) a member (including a retired member or a student member) of an independent trade union; (b) a member of the family of a member referred to in sub-paragraph (a); or (c) a former member of the trade union to whom the trade union may, under its rules, provide claims management services, or a member of the family of such a former member. (2) In paragraph (1), “independent trade union” has the same meaning as in the Trade Union and Labour Relations (Consolidation) Act 1992[^f00031]. (3) For the purposes of paragraph (1) – (a) subject to sub-paragraph (b), whether a person is or has been a member (including a retired member or a student member) of a trade union is to be decided in accordance with the rules of that trade union; (b) “member” of a trade union does not include a person who, under those rules, is a member only for the purpose of pursuing a claim or claims; and (c) whether a person is a member of the family of a member of a trade union is to be decided in accordance with the rules of that trade union. (4) An exemption of a trade union under this article is subject to compliance by the trade union with the condition that the trade union, in carrying on a regulated claims management activity, must act in accordance with the code of practice for the provision of regulated claims management activities by trade unions issued by the Treasury. (89T) (1) There is excluded from articles 89G to 89M any activity carried on by a students’ union for a member of that students’ union or a member of a constituent or affiliated association or body. (2) In this article “students’ union” has the meaning given by section 20 (meaning of “students’ union”) of the Education Act 1994[^f00032]. (89U) There is excluded from articles 89G to 89M any regulated activity of the kind specified in article 21, 25, 39A, 53 or 64 carried on by a person who has permission to carry on that activity in relation to a contract of insurance. (89V) (1) There is excluded from article 89G the activity of referring details of a potential claim or potential claimant to another person if— (a) the person who refers those details (“the introducer”) carries on no other regulated claims management activity; (b) the activity is incidental to the introducer’s main business; (c) the details are only referred to authorised persons, legal practitioners, or a firm, organisation or body corporate that provides the service through legal practitioners; (d) of the claims that the introducer refers to such persons, that introducer is paid, in money or money’s worth, for no more than 25 claims per calendar quarter; and (e) the introducer, in obtaining and referring those details, has complied with the provisions of the Data Protection Act 2018[^f00033], the Privacy and Electronic Communications (EC Directive) Regulations 2003[^f00034], the General Data Protection Regulation (EU) of the European Parliament and of the Council 2016/679[^f00035] and the Consumer Protection from Unfair Trading Regulations 2008[^f00036]. (2) Paragraph (1)(e) does not apply in the case of a referral to a legal practitioner or firm, organisation or body corporate that carries on the activity through legal practitioners. (3) In this article “legal practitioner” has the meaning given by article 89N(2) or (4). (89W) There is excluded from articles 89G to 89M any activity carried on in circumstances where— (a) a claim has been made by a person (“the claimant”) against another person (“the defendant”); and (b) the activity being carried on consists of the provision of a service to the defendant in connection with— (i) the making of a counterclaim against the claimant arising out of the same set of facts as the claim referred to in sub-paragraph (a); or (ii) the making of a claim against a third party (whether for contribution, as a subrogated claim, or otherwise) which is incidental to, or consequent on, the claim referred to in sub-paragraph (a).

The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005

8

The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005[^f00037] is amended as follows.

9

In article 2 (interpretation: general), in the appropriate place, insert—

“controlled claims management activity” has the meaning given in article 4(3);

10

In article 4—

(a) in the heading of the article, after “controlled activities” insert “, controlled claims management activities”;

(b) after paragraph (2) insert—

(3) For the purposes of section 21(10B)[^f00038] of the Act, a controlled claims management activity is an activity carried on in Great Britain of a kind specified in paragraph 11A of Schedule 1.

11

In article 8 (interpretation: solicited and unsolicited real time communications)—

(a) in paragraph (3), in sub-paragraph (b) after “controlled activities or investments” insert “or controlled claims management activities”; and

(b) in paragraph (4), in sub-paragraph (b) after “any investment activity” insert “or any claims management activity”.

12

In paragraph (1) of article 11 (combination of different exemptions) in sub-paragraph (b) for “11” substitute “11A”.

13

In article 12 (communications to overseas recipients)—

(a) in paragraph (1) for “paragraphs (2) and (7)” substitute “paragraphs (2), (7) and (8)”; and

(b) after paragraph (7) insert—

(8) Paragraph (1) does not apply to any communication in respect of a controlled claims management activity.

14

In paragraph (1) of article 13 (communications from customers and potential customers)—

(a) in sub-paragraph (a)—

(i) after “controlled investment” insert “or controlled claims management activity”;

(ii) omit “or”;

(b) at the end of sub-paragraph (b) insert “; or”; and

(c) in order that the customer can be supplied with services in respect of a controlled claims management activity by that supplier.

15

In paragraph (2) of article 14 (follow up non-real time communications and solicited real time communications) in sub-paragraph (d) after “and the same controlled investment” insert “or relates to the same controlled claims management activity”.

16

In paragraph (1A) of article 15 (introductions) after sub-paragraph (c) insert—

(d) paragraph 11A of that Schedule.

17

In article 16 (exempt persons) in paragraph (1) sub-paragraph (c) after “controlled activity” insert “or controlled claims management activity”.

18

In article 17 (generic promotions)—

(a) at the end of sub-paragraph (a) omit “and”;

(b) at the end of sub-paragraph (b) insert “; and”;

(c) does not identify (directly or indirectly) any person as a person who carries on a controlled claims management activity.

19

In article 19 (investment professionals) after paragraph (6) insert —

(7) Paragraph (1) does not apply to any communication in respect of a controlled claims management activity.

20

In article 20 (communications by journalists) in paragraph (3)—

(a) in sub-paragraph (b) after “paragraph (4)” insert “or to a controlled claims management activity”;

(b) in sub-paragraph (c) after “controlled investment” insert “or who carries on or engages in the controlled claims management activity”.

21

In article 27 (application of exemptions in Part 6) after sub-paragraph (b) insert—

(c) a controlled claims management activity.

22

In article 28 (one off non-real time communications and solicited real time communications) in paragraph (3) sub-paragraph (a) after “investment activity” insert “or controlled claims management activity”.

23

In article 28A (one off unsolicited real time communications) after paragraph (3) insert—

(4) Paragraph (1) does not apply to any communication in respect of a controlled claims management activity.

24

In article 30 (overseas communicators: solicited real time communications) after paragraph (2) insert—

(3) Paragraph (1) does not apply to any communication in respect of a controlled claims management activity.

25

In article 31 (overseas communicators: non-real time communications to previously overseas customers) after paragraph (3) insert—

(4) Paragraph (1) does not apply to any communication in respect of a controlled claims management activity.

26

In article 32 (overseas communicators: unsolicited real time communications to previously overseas customers) after paragraph (3) insert—

(4) Paragraph (1) does not apply to any communication in respect of a controlled claims management activity.

27

In article 33 (overseas communicators: unsolicited real time communications to knowledgeable customers) after paragraph (4) insert—

(5) Paragraph (1) does not apply to any communication in respect of a controlled claims management activity.

28

Article 36 (nationals of EEA States other than United Kingdom) is renumbered as paragraph (1) of that article and after the renumbered paragraph (1) insert—

(2) Paragraph (1) does not apply to any communication in respect of a controlled claims management activity.

29

In article 39 (joint enterprises) in paragraph (2) after “controlled activity” insert “or controlled claims management activity”.

30

In article 47 (persons in the business of disseminating information) in paragraph (2)(a) after “controlled activities” insert “or controlled claims management activities”.

31

In article 49 (high net worth companies, unincorporated associations etc) after paragraph (7) insert—

(8) Paragraph (1) does not apply to any communication in respect of a controlled claims management activity.

32

In article 55A (non-real time communication by members of professions)—

(a) in paragraph (2) after “investment and consumer credit-related” insert “and claims management-related”;

(b) in paragraph (3) after “investment and consumer credit-related” insert “and claims management-related”.

33

In article 59 (annual accounts and directors’ report) in paragraph (3) in sub-paragraph (a) for “11” substitute “11A”.

34

In article 61 (sale of goods and supply of services) in paragraph (1) in the definition of “supplier”—

(a) after “controlled activities” insert “or controlled claims management activities”;

(b) for “and 10BB” substitute “, 10BB and 11A”.

35

In article 73 (advice centres) in paragraph (2)—

(a) at the end of sub-paragraph (e) omit “or”;

(b) at the end of sub-paragraph (f) insert—

; or (g) a controlled claims management activity.

36

After article 73 (advice centres) insert—

(73A) The exemptions in this Part apply to any communication which relates to a controlled claims management activity of a kind specified in paragraph 11A of Schedule 1. (73B) (1) The financial promotion restriction does not apply to any communication which relates to a controlled claims management activity when that communication is made in England and Wales by— (a) a legal practitioner; (b) a firm, organisation or body corporate that carries on the controlled claims management activity through a legal practitioner; or (c) an individual who carries on the controlled claims management activity at the direction of, and under the supervision of, a legal practitioner who is— (i) that individual’s employer or fellow employee; or (ii) a director of a company, or a member of a limited liability partnership, that provides the service and is that individual’s employer. (2) In paragraph (1) “legal practitioner” means— (a) a solicitor or barrister of any part of England and Wales or Northern Ireland; (b) a Fellow of the Chartered Institute of Legal Executives; (c) a European lawyer, as defined in the European Communities (Services of Lawyers) Order 1978[^f00039] or the European Communities (Lawyer’s Practice) Regulations 2000[^f00040]; (d) a registered foreign lawyer, as defined in section 89(9) of the Courts and Legal Services Act 1990[^f00041]; (e) any other member of a legal profession, of a jurisdiction other than England and Wales, that is recognised by the Law Society of England and Wales or the General Council of the Bar as a regulated legal profession. (3) The financial promotion restriction does not apply to a communication which relates to a controlled claims management activity when that communication is made in Scotland by— (a) a legal practitioner; (b) a firm, organisation or body corporate that carries on the controlled claims management activity through or under the supervision of a legal practitioner where that firm, organisation or body corporate is— (i) a firm of solicitors; (ii) an incorporated practice; or (iii) a licensed legal services provider and the activity is a legal service as defined within section 3 of the Legal Services (Scotland) Act 2010[^f00042]. (4) In paragraph (3) “legal practitioner” means— (a) a person who is qualified to practise as a solicitor under section 4 of the Solicitors (Scotland) Act 1980[^f00043]; (b) an advocate who is a member of the Faculty of Advocates; (c) a European lawyer as defined in the European Communities (Services of Lawyers) Order 1978 or the European Communities (Lawyer’s Practice) (Scotland) Regulations 2000[^f00044]; or (d) a registered foreign lawyer within the meaning of section 65 of the Solicitors (Scotland) Act 1980. (5) A communication mentioned in paragraph (1) or (3) is only excluded from the financial promotion restriction if the legal practitioner concerned carries on the controlled claims management activity in the ordinary course of legal practice pursuant to the professional rules to which that legal practitioner is subject. (73C) (1) The financial promotion restriction does not apply to any communication which relates to a controlled claims management activity when that communication is made by a charity or not-for-profit agency. (2) In this article “charity” means— (a) a charity as defined by section 1(1) of the Charities Act 2011[^f00045] or the Charities and Trustee Investment (Scotland) Act 2005[^f00046]; or (b) a body registered in the Scottish Charity Register. (3) In this article “not-for-profit agency” means a body that by or under its constitution– (a) is required to apply the whole of its net income, and any expendable capital, after payment of outgoings for charitable or public purposes; and (b) is prohibited from distributing, directly or indirectly, any part of its net income by way of profits or its assets among any of its members. (4) But a body is not prevented from being a not-for-profit agency for the purposes of paragraph (3) if its constitution permits— (a) the payment, out of the body’s funds, of reasonable and proper remuneration for goods or services supplied to the body by a member; or (b) in the case of a not-for-profit body that is a charity, the payment to a member to which the member is eligible because that member is a beneficiary of the charity; or (c) the purchase, out of the body’s funds, of indemnity insurance for trustees of the body. (73D) The financial promotion restriction does not apply to any communication which relates to a controlled claims management activity when that communication is made by— (a) any person established or appointed by virtue of an enactment; (b) an Independent Complaints Reviewer; or (c) an Independent Case Examiner when the communication is made in the course of carrying out that individual’s duties. (73E) The financial promotion restriction does not apply to any communication which relates to a controlled claims management activity when that communication is made by the Motor Insurers’ Bureau in the course of carrying its functions (being the company limited by guarantee mentioned in section 95(2) (notification of refusal of insurance on grounds of health) of the Road Traffic Act 1988[^f00047]). (73F) The financial promotion restriction does not apply to any communication which relates to a controlled claims management activity when that communication is made by— (a) the Medical Protection Society Limited for its members; (b) the Medical Defence Union Limited for its members; or (c) the Medical and Dental Defence Union of Scotland Limited for its members. (73G) (1) The financial promotion restriction does not apply to any communication which relates to a controlled claims management activity when that communication is made by an independent trade union for — (a) a member (including a retired member or a student member) of an independent trade union; (b) a member of the family of a member referred to in sub-paragraph (a); or (c) a former member of the trade union to whom the trade union may, under its rules, provide claims management services, or a member of the family of such a former member. (2) In paragraph (1) “independent trade union” has the same meaning as in the Trade Union and Labour Relations (Consolidation) Act 1992[^f00048]. (3) For the purposes of paragraph (1)— (a) subject to sub-paragraph (b), whether a person is or has been a member (including a retired member or a student member) of a trade union is to be decided in accordance with the rules of that trade union; (b) “member” of a trade union does not include a person who, under those rules, is a member only for the purpose of pursuing a claim or claims; and (c) whether a person is a member of the family of a member of a trade union is to be decided in accordance with the rules of that trade union. (4) An exemption of a trade union under this article is subject to compliance by the trade union with the condition that the trade union, in making a communication which relates to a controlled claims management activity, must act in accordance with the code of practice for the provision of regulated claims management activities by trade unions issued by the Treasury. (73H) (1) The financial promotion restriction does not apply to any communication which relates to a controlled claims management activity when that communication is made by a students’ union for a member of that students’ union or a member of a constituent or affiliated association or body. (2) In this article “students’ union” has the meaning given by section 20 (meaning of “students’ union”) of the Education Act 1994[^f00049]. (73I) The financial promotion restriction does not apply to any communication which relates to a controlled claims management activity when that communication is made by a person who has permission to carry out a regulated activity of the kind specified in article 21, 25, 39A, 53 or 64 of the Regulated Activities Order in relation to a contract of insurance. (73J) (1) The financial promotion restriction does not apply to any communication which relates to the controlled claims management activity falling within paragraph 11A(2) of Schedule 1 of referring the details of a potential claim or potential claimant to another person if – (a) the person who refers those details (“the introducer”) carries on no other regulated claims management service; (b) the activity is incidental to the introducer’s main business; (c) the details are only referred to authorised persons, legal practitioners, or a firm, organisation or body corporate that provides the service through legal practitioners; (d) of the claims that the introducer refers to such persons, that introducer is paid, in money or money’s worth, for no more than 25 claims per calendar quarter; and (e) the introducer, in obtaining and referring those details has complied with the provisions of the Data Protection Act 2018[^f00050], the Privacy and Electronic Communications (EC Directive) Regulations 2003[^f00051], the General Data Protection Regulation (EU) of the European Parliament and of the Council 2016/679[^f00052] and the Consumer Protection from Unfair Trading Regulations 2008[^f00053]. (2) Paragraph 1(e) does not apply in the case of a referral to a legal practitioner or firm, organisation or body corporate that carries on the activity through legal practitioners. (3) In this article “legal practitioner” has the meaning given by article 73B(2) or (4).

37

After article 73J (inserted by article 36) insert—

38

After paragraph 11 of Schedule 1 (controlled activities) insert—

(11A) (1) A claims management activity carried out in Great Britain is a controlled claims management activity. (2) For the purposes of this paragraph, a claims management activity is one of the following activities: (a) seeking out persons who may have a claim, referring details of a claim or potential claim or a claimant or potential claimant to another person (including a person having the right to conduct litigation), or identifying a claim or potential claim or a claimant or potential claimant in respect of— (i) a personal injury claim; (ii) a financial services or financial product claim; (iii) a housing disrepair claim; (iv) a claim for a specified benefit; (v) a criminal injury claim; or (vi) an employment related claim. (b) advising a claimant or potential claimant, investigating a claim or representing a claimant in respect of a personal injury claim; (c) advising a claimant or potential claimant, investigating a claim or representing a claimant in respect of a financial services or financial product claim; (d) advising a claimant or potential claimant, investigating a claim or representing a claimant in respect of a housing disrepair claim; (e) advising a claimant or potential claimant, investigating a claim or representing a claimant in respect of a claim for a specified benefit; (f) advising a claimant or potential claimant, investigating a claim or representing a claimant in respect of a criminal injury claim; or (g) advising a claimant or potential claimant, investigating a claim or representing a claimant in respect of an employment related claim. (3) In this paragraph— (a) “claimant” includes, in civil proceedings in Scotland, a pursuer; (b) “defendant” includes, in civil proceedings in Scotland, a defender; (c) “personal injury claim” means a claim for personal injury within the meaning of the Civil Procedure Rules 1998[^f00054] in England and Wales and an action for damages for, or arising from, personal injuries within the meaning set out in section 8(7) of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018[^f00055] in Scotland; (d) “financial services or financial product claim” includes a claim made under section 75 of the Consumer Credit Act 1974[^f00056]; (e) “housing disrepair claim” means a claim under section 11 of the Landlord and Tenant Act 1985[^f00057] or section 4 of the Defective Premises Act 1972[^f00058] in England and Wales or an application in respect of the repairing standard under section 22 of the Housing (Scotland) Act 2006[^f00059], or claims in relation to the disrepair of premises under a term of a tenancy agreement or lease or under the common law relating to nuisance or negligence but does not include claims for statutory nuisance under section 82 of the Environmental Protection Act 1990[^f00060]; (f) “a claim for a specified benefit” means a claim for one of the following benefits— (i) industrial injuries benefit, within the meaning given by section 94 of the Social Security Contributions and Benefits Act 1992[^f00061]; (ii) any supplement or additional allowance, or increase of benefit or allowance to which a recipient of an industrial injuries benefit may be entitled under that Act or any other Act; (iii) a benefit under a scheme referred to in paragraph 2 or 4 of Schedule 8 to that Act; or (iv) a benefit under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979[^f00062]. (g) “criminal injury claim” means a claim under the Criminal Injuries Compensation Scheme established under the Criminal Injuries Compensation Act 1995[^f00063]; (h) “employment related claim” includes a claim in relation to wages and salaries and other employment related payments and claims in relation to wrongful or unfair dismissal, redundancy, discrimination and harassment; (i) “investigating” means carrying out an investigation into, or commissioning the investigation of, the circumstances, merits or foundation of a claim; and (j) “representing” means representation in writing or orally, regardless of the tribunal, body or person before which or to whom the representation is made. (4) In this paragraph, a person is to be treated as carrying on a controlled claims management activity in Great Britain when the activity is carried on— (a) by a person who is— (i) an individual who is ordinarily resident in Great Britain; or (ii) a person, other than an individual, who is constituted under the law of England and Wales or Scotland; or (b) in respect of a claimant or potential claimant who is— (i) an individual who is ordinarily resident in Great Britain; or (ii) a person, other than an individual, who is constituted under the law of England and Wales or Scotland. (5) For the purposes of sub-paragraph (4) a person is “ordinarily resident” in Great Britain if that person satisfies the requirements of the Statutory Residence Test as set out in Schedule 45 to the Finance Act 2013[^f00064] either— (a) at the time of the facts giving rise to the claim or potential claim; or (b) at the time when the controlled claims management activity is carried out in respect of that claimant or potential claimant.

PART 3 — Transitional provisions

CHAPTER 1 — Interpretation

Interpretation

39

(1) In this Part—

“the 2006 Act” means the Compensation Act 2006[^f00065];

“the 2007 Act” means the Legal Services Act 2007[^f00066];

“the 2001 Order” means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001[^f00067];

“the 2006 Regulations” means the Compensation (Claims Management Services) Regulations 2006[^f00068];

“a 2000 Act authorised person” means a person given a Part 4A permission;

“a 2006 Act authorised person” means an authorised person within the meaning given by section 4(2)(a) of the 2006 Act;

“Part 4A permission” means a permission given under Part 4A of the 2000 Act (permission to carry on regulated activities);

“the Regulator” means the Secretary of State[^f00069].

(2) A reference to the Regulator includes a reference to a person acting on behalf of the Regulator or with the Regulator’s authority.

(3) An appeal submitted to the First-tier Tribunal under section 13 of the 2006 Act has not been determined when—

(a) such an appeal is awaiting determination by the First-tier Tribunal;

(b) an application for permission to appeal under section 11, 13, 14A or 14B of the Tribunals, Courts and Enforcement Act 2007[^f00070] (“the Tribunals Act 2007”) could be made or is awaiting determination (other than an application out of time with permission);

(d) an appeal decision has been reviewed by the First-tier Tribunal under section 9 or by the Upper Tribunal under section 10 of the Tribunals Act 2007 and is awaiting a further determination.

CHAPTER 2 — Authorisation and regulation of 2006 Act authorised persons

Meaning of “relevant person”

40

(1) In this Chapter “relevant person” means a person who—

(a) immediately before 1st April 2019, was a 2006 Act authorised person; and

(b) on 1st April 2019, is treated, by virtue of article 80(5), as having a Part 4A permission to carry on a regulated claims management activity.

(2) Where the conditions set out in paragraph (3) are met, the reference in paragraph (1)(a) to a 2006 Act authorised person includes a person (“P”) who received from the Regulator written notice given under regulation 47 of the 2006 Regulations of a decision to cancel P’s authorisation (“the cancellation decision”).

(3) The conditions are that the cancellation decision had effect before 1st April 2019, and—

(a) where, before 1st April 2019, P submitted notice of an appeal to the First-tier Tribunal under section 13 of the 2006 Act with respect to the cancellation decision, the appeal—

(i) has not been determined; or

(ii) has been determined by a remittal of the cancellation decision to the Regulator under section 13(3)(e) of the 2006 Act but a further decision by the Regulator in relation to the cancellation decision has not been taken; or

(b) where, before 1st April 2019, P did not submit such notice of appeal, the period within which an appeal may be made has not ended on that date.

Applications for authorisation made to the Regulator: authorisation by the FCA

41

(1) This article applies to an application under regulation 8 of the 2006 Regulations (application for authorisations) received by the Regulator before 1st April 2019, where on 1st April 2019—

(a) the applicant (“A”) has not withdrawn the application; and

(b) the Regulator has not given A a written instrument of authorisation in accordance with regulation 13(1) of the 2006 Regulations.

(2) Paragraphs (3) to (8) apply where the Regulator has not approved the grant of an authorisation to A.

(3) Where—

(a) the conditions set out in paragraph (5) are met; and

(b) immediately before 1st April 2019, A is a 2000 Act authorised person,

A’s application to the Regulator is to be treated as an application to the FCA under section 55H[^f00071] of the 2000 Act (variation by FCA at request of authorised person) to vary A’s Part 4A permission by adding regulated claims management activity to the activities to which the permission relates.

(4) Where—

(a) the conditions set out in paragraph (5) are met; and

(b) immediately before 1st April 2019, A is not a 2000 Act authorised person,

A’s application to the Regulator is to be treated as an application to the FCA under section 55A[^f00072] (application for permission) of the 2000 Act for permission to carry on regulated claims management activity.

(5) The conditions are that A—

(a) submits to the FCA such further application form as may be specified in a direction given by the FCA; and

(b) pays to the FCA any further fee payable under its rules by any person making an application of a kind specified in paragraphs (3) or (4).

(6) If, before 1st April 2019, the Regulator notified A that the Regulator was minded to grant or refuse A’s application, that fact is immaterial for the purposes of the determination of the application by the FCA.

(7) Section 55U(1) to (4)[^f00073] of the 2000 Act (applications under Part 4A) does not apply to A’s application.

(8) For the purposes of section 55V[^f00074] of the 2000 Act (determination of applications) A’s application is to be treated as if it had been received by the FCA on the date on which A met the conditions set out in paragraph (5).

(9) Paragraph (10) applies where—

(a) the Regulator has on A’s application approved the grant of an authorisation to A; and

(b) A has not paid to the Regulator the fee referred to in regulation 13(1) of the 2006 Regulations.

(10) That fee is payable to the FCA, and on payment of that fee A is to be treated for the purposes of article 80 as if—

(a) immediately before 1st April 2019, A was a 2006 Act authorised person; and

(b) during the period referred to in paragraph (1)(b) of that article, A had notified the FCA of A’s desire to be registered for temporary permission under that article and paid the fee payable by any person desiring to be so registered.

Applications for authorisation made to the Regulator: appeal of decision

42

(1) This article applies where—

(a) the Regulator gave notice to a person (“A”) under regulation 13(5) of the 2006 Regulations of the Regulator’s decision—

(i) to refuse to grant an authorisation to A; or

(ii) to grant an authorisation to A subject to a condition not sought by A; and

(b) on 1st April 2019, the period within which an appeal relating to that decision may be made has not ended.

(2) The Regulator’s notice is to be treated as a decision notice given under section 55X(4)(f) of the 2000 Act[^f00075], and the notice is to be read for that purpose—

(a) as if any reference to the Regulator were a reference to the FCA; and

(b) with any other necessary modifications.

(3) If, before 1st April 2019, A submitted notice of an appeal to the First-tier Tribunal under section 13 of the 2006 Act in respect of the Regulator’s decision, section 55Z3(1) of the 2000 Act[^f00076] (right to refer matters to the Tribunal) does not apply.

Proposal by the Regulator to vary authorisation: determination by the FCA

43

(1) This article applies where the Regulator—

(a) gave written notice to a relevant person (“A”) under regulation 46(4) of the 2006 Regulations (cancellation, suspension and variation of authorisations) that the Regulator proposed to vary A’s authorisation; and

(b) did not, on or before 1st April 2019, give written notice under regulation 47(1) of the 2006 Regulations (procedure for cancellation etc) of a decision to vary A’s authorisation.

(2) The Regulator’s notice is to be treated as written notice given by the FCA under section 55Y(4) of the 2000 Act[^f00077], and for this purpose—

(a) subsection (2) of that section does not apply to the notice;

(b) the notice is taken to comply with subsection (5) of that section;

(i) as if the period specified in it for making a written submission (including any further period allowed under regulation 46(5) of the 2006 Regulations) were the period for making representations specified in accordance with section 55Y(5)(c) of the 2000 Act;

(ii) as if a reference to the Regulator were a reference to the FCA; and

(iii) with any other necessary modifications.

Variation of authorisation by the Regulator: appeal of decision

44

(1) This article applies where—

(a) the Regulator gave written notice to a relevant person (“B”) under regulation 47(1) of the 2006 Regulations of a decision to vary B’s authorisation; and

(b) on 1st April 2019—

(i) the period within which an appeal relating to that decision may be made has not ended; or

(ii) an appeal submitted to the First-tier Tribunal by B before that date has not been determined.

(2) The Regulator’s notice is to be treated as written notice given by the FCA under section 55Y(7) of the 2000 Act, and for this purpose—

(a) it is immaterial that the notice does not comply with subsection (9) of that section; and

(b) the notice is to be read—

(i) as if a reference to the Regulator were a reference to the FCA; and

(ii) with any other necessary modifications.

(3) If, before 1st April 2019, B submitted notice of an appeal to the First-tier Tribunal under section 13 of the 2006 Act in respect of the Regulator’s decision, section 55Z3(1) of the 2000 Act does not apply.

Proposal by the Regulator to cancel authorisation: determination by the FCA

45

(1) This article applies where the Regulator—

(a) gave written notice to a relevant person (“A”) under regulation 46(4) of the 2006 Regulations that the Regulator proposed to cancel A’s authorisation; and

(b) did not, on or before 1st April 2019, give written notice under regulation 47(1) of the 2006 Regulations of a decision to cancel A’s authorisation.

(2) Where, immediately before 1st April 2019, A is not a 2000 Act authorised person, the Regulator’s notice is to be treated as a warning notice given under section 55Z(1)[^f00078] of the 2000 Act, and for this purpose—

(a) the notice is taken to comply with section 387(1) (warning notices) of the 2000 Act;

(b) the notice is to be read—

(i) as if a reference to the Regulator were a reference to the FCA;

(ii) as if the period specified in it for making a written submission (including any further period allowed under regulation 46(5) of the 2006 Regulations) were the period for making representations specified in accordance with section 387(2) of the 2000 Act; and

(iii) with any other necessary modifications.

(3) Where, immediately before 1st April 2019, A is a 2000 Act authorised person, the Regulator’s notice is to be treated as written notice given by the FCA under section 55Y(4) of the 2000 Act, and for this purpose—

(a) subsection (2) of that section does not apply to the notice;

(b) the notice is taken to comply with subsection (5) of that section; and

(i) as if a reference to the Regulator were a reference to the FCA;

(ii) as if the period specified in it for making a written submission (including any further period allowed under regulation 46(5) of the 2006 Regulations) were the period for making representations specified in accordance with section 55Y(5)(c) of the 2000 Act; and

(iii) with any other necessary modifications.

Cancellation of authorisation by the Regulator: appeal of decision

46

(1) This article applies where—

(a) the Regulator gave written notice to a relevant person (“B”) under regulation 47(1) of the 2006 Regulations of a decision to cancel B’s authorisation; and

(b) on 1st April 2019—

(i) the period within which an appeal relating to that decision may be made has not ended; or

(ii) an appeal submitted to the First-tier Tribunal by B before that date has not been determined.

(2) For the purposes only of an appeal in respect of the Regulator’s decision, the Regulator’s notice is to be treated—

(a) where, immediately before 1st April 2019, B is not a 2000 Act authorised person, as a decision notice given under section 55Z(2) of the 2000 Act;

(b) where, immediately before 1st April 2019, B is a 2000 Act authorised person, as written notice given by the FCA under section 55Y(7) of that Act.

(3) For the purposes of paragraph (2)—

(a) where the notice is treated as written notice under section 55Y(7) of the 2000 Act, it is immaterial that it does not comply with subsection (9) of that section; and

(b) the notice is to be read—

(i) as if any reference to the Regulator were a reference to the FCA; and

(ii) with any other necessary modifications.

(4) If, before 1st April 2019, B submitted notice of an appeal to the First-tier Tribunal under section 13 of the 2006 Act in respect of the Regulator’s decision, section 55Z3(1) of the 2000 Act does not apply.

Proposal by the Regulator to suspend authorisation: determination by the FCA

47

(1) This article applies where the Regulator—

(a) gave written notice to a relevant person (“A”) under regulation 46(4) of the 2006 Regulations that the Regulator proposed to suspend A’s authorisation; and

(b) on 1st April 2019, has not given written notice under regulation 47(1) of the 2006 Regulations of a decision to suspend A’s authorisation.

(2) The Regulator’s notice is to be treated as a warning notice given by the FCA under section 207(1)(c) of the 2000 Act[^f00079], and for this purpose—

(a) the notice is taken to comply with section 387(1) of the 2000 Act; and

(b) the notice is to be read—

(i) as if any reference to the Regulator were a reference to the FCA;

(ii) as if the period specified for making a written submission (including any further period allowed under regulation 46(5) of the 2006 Regulations) were the period for making representations specified in accordance with section 387(2) of the 2000 Act;

(iii) as if the period of the proposed suspension specified among the terms set out under regulation 46(4)(b) of the 2006 Regulations were the period for which the suspension is to have effect stated in accordance with section 207(4) of the 2000 Act[^f00080]; and

(iv) with any other necessary modifications.

Suspension of authorisation by the Regulator: appeal of decision

48

(1) This article applies where—

(a) the Regulator gave written notice to a relevant person (“B”) under regulation 47(1) of the 2006 Regulations of a decision to suspend B’s authorisation; and

(b) on 1st April 2019—

(i) the period within which an appeal relating to that decision may be made has not ended; or

(ii) an appeal submitted to the First-tier Tribunal by B before that date has not been determined.

(2) For the purposes only of an appeal in respect of the Regulator’s decision, the Regulator’s notice is to be treated as a decision notice given by the FCA under section 208(1)(c) of the 2000 Act[^f00081], and the notice is to be read for this purpose—

(a) as if any reference to the Regulator were a reference to the FCA; and

(b) with any other necessary modifications.

(3) For the purposes of section 206A(3) of the 2000 Act, the suspension is treated as having taken effect on 1st April 2019.

(4) If, before 1st April 2019, B submitted notice of an appeal to the First-tier Tribunal under section 13 of the 2006 Act in respect of the Regulator’s decision, section 208(4) of the 2000 Act[^f00082] (right to refer matters to the Tribunal) does not apply.

Notice by the Regulator of proposed direction

49

(1) This article applies where the Regulator—

(a) notified a relevant person under regulation 29(4) of the 2006 Regulations[^f00083] (directions of the Regulator about complaints handling and related matters) of a direction that the Regulator proposed to give under paragraph (3) of that regulation; and

(b) on 1st April 2019, has not given the proposed direction.

(2) The Regulator’s notice is to be treated as written notice given by the FCA under section 55Y(4) of the 2000 Act, and for this purpose—

(a) subsection (2) of that section does not apply to the notice;

(b) the notice is taken to comply with subsection (5) of that section; and

(i) as if a reference to the Regulator were a reference to the FCA; and

(ii) with any other necessary modifications.

Compliance with information requirement imposed by the Regulator

50

(1) This article applies where—

(a) the Regulator—

(i) gave notice in writing to a person under—

(aa) regulation 33 of the 2006 Regulations (requirements for information under section 8(4) of the 2006 Act); or

(bb) regulation 36 of the 2006 Regulations (breaches by authorised persons of condition: requirement to provide information etc); or

(ii) made a request to a person under rule 16 of the Conduct of Authorised Persons Rules 2018[^f00084]; and

(b) on 1st April 2019, the period specified in the notice or request within which the information or documents specified or described in the notice or request are to be given to the Regulator, including any extra time allowed under regulation 33(6) or 36(6) of the 2006 Regulations, has not expired.

(2) The Regulator’s notice or request is to be treated as a notice in writing given by the FCA under section 165(1) of the 2000 Act[^f00085] (regulators’ power to require information: authorised persons etc).

(3) For the purposes of this article, section 165 of the 2000 Act has effect in relation to the Regulator’s notice or request as if—

(a) in subsection (2)(a), the reference to such reasonable period as may be specified is to be read as a reference to the period referred to in paragraph (1)(b) or such longer period as the FCA may allow; and

(b) in subsection (2)(b), the reference to such place as may be specified is to be read as a reference to the place specified in the Regulator’s notice or request at which the information or documents specified or described in the notice or request are to be given to the Regulator.

Penalties for conduct for which the Regulator has not given notice of proposed penalty

51

(1) This article applies where—

(a) the FCA is satisfied that, after 28th December 2014 but before 1st April 2019, a relevant person (“A”)—

(i) failed to comply with any of the conditions of authorisation referred to in regulation 12(5)(a), (b), (d) or (i)[^f00086] of the 2006 Regulations;

(ii) failed to comply with a notice in writing given by the Regulator under regulation 36 of the 2006 Regulations; or

(iii) in relation to a warrant issued under regulation 40 of the 2006 Regulations (issue of warrants generally)[^f00087], obstructed an attempt to—

(aa) enter and search premises in accordance with the warrant;

(bb) take possession of written or electronic records in accordance with an authorisation under paragraph (4) of that regulation; or

(cc) take copies of written or electronic records in accordance with regulation 43[^f00088] of the 2006 Regulations (copying of documents); and

(b) on 1st April 2019, the Regulator has not given written notice to A under regulation 51[^f00089] of the 2006 Regulations (notice of proposed penalty and written submissions) that the Regulator proposed to impose a penalty on A for the failure or the obstruction concerned (“the relevant default”).

(2) For the purposes of the following sections of the 2000 Act, the relevant default is to be treated as a contravention of a relevant requirement (within the meaning given by section 204A(2) of that Act)—

(a) section 206 (financial penalties);

(b) section 206A (suspending permission to carry on regulated activities etc);

(3) For the purposes of paragraph (2), sections 206 and 208 of the 2000 Act are to be read as if a reference to an authorised person included a person who was, at any time before 1st April 2019, a 2006 Act authorised person.

(4) In determining what, if any, financial penalty to impose on A, the FCA must have regard to—

(a) any penalty or fine that has been imposed on A for the relevant default by another body;

(b) any other steps that the Regulator or the FCA has taken, or that the FCA might take, in relation to the relevant default;

(d) the relevant turnover (within the meaning given by regulation 50[^f00090]) of A’s business.

(5) A financial penalty imposed by the FCA for the relevant default—

(a) where the relevant turnover of A’s business is less than £500,000, may not exceed £100,000;

(b) where the relevant turnover of A’s business is £500,000 or more, may not exceed an amount equal to 20 per cent of that turnover.

Penalties for conduct for which the Regulator has given notice of proposed penalty

52

(1) In this article—

(a) a reference to a numbered section is a reference to the section so numbered in the 2000 Act; and

(b) a reference to a numbered regulation is a reference to the regulation so numbered in the 2006 Regulations.

(2) This article applies where the Regulator—

(a) gave written notice to a person (“A”) under regulation 51(1) that the Regulator proposed to impose a penalty on A for a failure or obstruction of a kind specified in article 51(1) (“the relevant default”);

(b) none of the evidence on which the Regulator relies, as set out in the summary of evidence set out in the notice in accordance with regulation 51(1)(e), relates to conduct that occurred on or before 28th December 2014; and

(c) on 1st April 2019, the Regulator has not given written notice to A under regulation 52[^f00091] (procedure for requiring an authorised person to pay a penalty) of a decision to require A to pay a penalty.

(3) The Regulator’s notice is to be treated as a warning notice given by the FCA under section 207(1)(b) (proposal to take disciplinary measures)[^f00092], and for this purpose—

(a) the notice is taken to comply with section 387(1); and

(b) the notice is to be read—

(i) as if a reference to the Regulator is a reference to the FCA;

(ii) as if the period specified in it for making a written submission (including any further period allowed under regulation 51(2)) is the period for making representations specified in accordance with section 387(2); and

(iii) with any other necessary modifications.

(4) For the purposes of the following sections of the 2000 Act, the relevant default is to be treated as a contravention of a relevant requirement (within the meaning given by section 204A(2))—

(a) section 206 (financial penalties);

(b) section 206A (suspending permission to carry on regulated activities etc);

(d) section 208 (decision notice).

(5) For the purposes of paragraph (4), sections 206, 207 (except subsection (1)(c)), and 208 are to be read as if a reference to an authorised person included a person who was, at any time before 1st April 2019, a 2006 Act authorised person.

(6) In determining what, if any, financial penalty to impose on A, the FCA must have regard to—

(a) the considerations specified in article 51(4); and

(b) any written submissions made by A in relation to the matters in the Regulator’s notice within the period allowed under regulation 51(1)(g)[^f00093] or any further period allowed by the Regulator.

(7) A financial penalty imposed by the FCA for the relevant default—

(a) where the relevant turnover of A’s business is less than £500,000, may not exceed £100,000;

(b) where the relevant turnover of A’s business is £500,000 or more, may not exceed an amount equal to 20 per cent of that turnover.

Penalties for conduct for which the Regulator has given penalty decision: appeal of decision

53

(1) This article applies where—

(a) the Regulator gave written notice to a person (“A”) under regulation 52 of the 2006 Regulations of a decision to require A to pay a penalty; and

(b) on 1st April 2019—

(i) the period within which an appeal relating to that decision may be made has not ended; or

(ii) an appeal submitted to the First-tier Tribunal by A before that date has not been determined.

(2) The Regulator’s notice is to be treated as a decision notice given by the FCA under section 208(1)(b) of the 2000 Act, and is to be read for this purpose—

(a) as if any reference to the Regulator were a reference to the FCA; and

(b) with any other necessary modifications.

(3) If, before 1st April 2019, A submitted notice of an appeal to the First-tier Tribunal under section 13 of the 2006 Act, section 208(4) of the 2000 Act[^f00094] does not apply.

Penalties for conduct for which the Regulator has given penalty decision: penalty due

54

(1) This article applies where, before 1st April 2019—

(a) the Regulator gave written notice to a person (“A”) under regulation 52 of the 2006 Regulations of a decision to require A to pay a penalty; and

(b) on 1st April 2019—

(i) the period within which an appeal relating to that decision may be made has ended, or an appeal has been withdrawn or determined otherwise than in A’s favour; and

(ii) the penalty specified in the Regulator’s notice, or any part of it, is unpaid.

(2) The penalty or unpaid part of the penalty is payable to the FCA rather than to the Regulator.

(3) Where the penalty, or any part of it, is not paid by the date specified in the Regulator’s notice as the date by which it is required to be paid, the FCA may enforce the penalty or that part of it as a debt due to the FCA.

(4) For the purposes of Part 3 of Schedule 1ZA to the 2000 Act (penalties and fees)—

(a) any amounts received by the FCA by virtue of paragraph (2) are to be treated as amounts received by way of penalties imposed under the 2000 Act;

(b) any expenses incurred by the FCA in connection with the recovery of penalties payable to it by virtue of this article are to be treated as expenses incurred in connection with the recovery of penalties imposed under the 2000 Act.

Investigation and prosecution after 1st April 2019 in relation to conduct before that date

55

(1) This article applies for the purposes of—

(a) an investigation on or after 1st April 2019 (“a relevant investigation”)—

(i) to determine whether an offence was committed by a person before that date under Part 2 of the 2006 Act;

(ii) of a complaint about the activities or professional conduct of a relevant person before that date;

(iii) into the professional conduct of a relevant person before that date otherwise than as a result of a complaint, where the FCA is satisfied that the Regulator could reasonably have made a decision to carry out such an investigation under regulation 35(2) of the 2006 Regulations; and

(b) the prosecution on or after 1st April 2019 of an offence committed before that date under Part 2 of the 2006 Act (“a relevant offence”).

(2) The FCA may—

(a) conduct any relevant investigation; or

(b) institute and prosecute criminal proceedings in respect of any relevant offence.

(3) Paragraphs (4) to (9) apply for the purposes of paragraph (2).

(4) The following sections of the 2000 Act are to be read as if a reference to an authorised person included a person who was, at any time before 1st April 2019, a 2006 Act authorised person—

(a) section 165 (regulators’ power to require information), except subsection (7);

(b) section 166 (reports by skilled persons); and

(5) Section 168 of the 2000 Act[^f00096] is to be read as if, in subsection (4), after paragraph (a) there were inserted—

(ab) a person may be guilty of an offence under section 10, 11(1) or (2) of the Compensation Act 2006; (ac) a person may have contravened section 4(1) of the Compensation Act 2006 or failed to comply with a requirement made under section 8(4) of that Act;

(6) In section 175 (information and documents: supplemental provisions), subsections (2), (2A) and (2B)[^f00097] have effect as if a reference to a document produced in response to a requirement imposed under Part 11 of the 2000 Act (“Part 11”) included a document given to the Regulator in compliance with a requirement made under—

(a) regulation 33(1) (requirements for information under section 8(4) of the 2006 Act) of the 2006 Regulations; or

(b) regulation 36(1) (breaches by authorised persons of condition: requirement to provide information etc) of the 2006 Regulations.

(7) In section 177 (offences)—

(a) subsection (3) is to be read as if the reference to an investigation being or likely to be conducted under Part 11 included a relevant investigation; and

(b) subsections (1) and (4) are to be read as if the references to a requirement imposed under Part 11 included a requirement made under—

(i) regulation 33(1) of the 2006 Regulations; or

(ii) regulation 36(1) of the 2006 Regulations.

(8) In section 398 (misleading FCA: residual cases) subsection (1A)(a) is to be read as if the reference to a requirement imposed by the 2000 Act included a requirement imposed under Part 11 (information gathering and investigations) as that Part applies with the modifications in paragraphs (4) to (7).

(9) In section 400 (offences by bodies corporate etc) a reference to an offence under the 2000 Act includes an offence under section 177(3) or (4) as that section applies with the modifications in paragraph (7).

Unprofessional conduct: continuation of investigation commenced by the Regulator

56

(1) This article applies where—

(a) the Regulator commenced the investigation of a complaint or suspicion of unprofessional conduct of a person under regulation 35(1) or (2) of the 2006 Regulations (Regulator to investigate complaints or suspicions of unprofessional conduct); and

(b) on 1st April 2019, the investigation has not been concluded.

(2) The FCA is deemed to have decided, immediately before 1st April 2019, that there is good reason for the appointment under section 167 of the 2000 Act of one or more competent persons to conduct an investigation on its behalf into the complaint or suspicion referred to in paragraph (1).

Offences under the 2006 Act: continuation of investigation commenced by the Regulator and institution of criminal proceedings

57

(1) This article applies where, before 1st April 2019, the Regulator commenced the investigation of an offence under Part 2 of the 2006 Act alleged to have been committed by any person (“A”).

(2) The FCA may continue the investigation and for that purpose—

(a) section 168 of the 2000 Act (appointment of persons to carry out investigations in particular cases) applies in relation to the investigation with the modification set out in paragraph (3); and

(b) for the purposes of that section as applied, the FCA is deemed to have decided, immediately before 1st April 2019, that there are circumstances suggesting that A may be guilty of an offence under Part 2 of the 2006 Act.

(3) For the purposes of paragraph (2), section 168 of the 2000 Act is to be read as if, in subsection (1)(b), at the end there were inserted “or under Part 2 of the Compensation Act 2006”.

(4) The FCA may institute criminal proceedings in respect of an offence under Part 2 of the 2006 Act in relation to which an investigation was continued by the FCA under paragraph (2).

Continuation of criminal proceedings instituted by the Regulator

58

(1) This article applies to criminal proceedings (“relevant proceedings”) which—

(a) were instituted by the Regulator under section 8(3)(b) of the 2006 Act in respect of an offence under section 7(1), 10(1) or 11(1) or (2) of that Act; and

(b) on 1st April 2019, have not been concluded by acquittal or upon conviction and sentencing.

(2) The FCA may continue the prosecution of the defendant in relevant proceedings, and is for that purpose substituted for the Regulator as a party to the proceedings.

Continuation of injunction applications made by the Regulator

59

(1) This article applies to an application for an injunction (“a relevant application”) which—

(a) was made by the Regulator under section 8(1) of the 2006 Act)[^f00098]; and

(b) on 1st April 2019, has not been determined by the court.

(2) The FCA may continue the relevant application and is for that purpose substituted for the Regulator as a party to that application.

Continuation of application made by the Regulator for a search warrant

60

(1) This article applies to an application for a search warrant made by the Regulator—

(a) under section 8(5) of the 2006 Act (enforcement: the Regulator); or

(b) under regulation 37(1) or (2) of the 2006 Regulations (search warrants for purposes of investigation of professional conduct).

(2) The FCA may continue the search warrant application and is for that purpose substituted for the Regulator as a party to that application.

Retention of records seized by an officer of the Regulator

61

(1) This article applies where, before 1st April 2019, an officer of the Regulator took possession of any written or electronic records in accordance with an authorisation given by a judicial officer under regulation 40(4) of the 2006 Regulations.

(2) Section 176A[^f00099] (retention of documents taken under section 176) of the 2000 Act has effect in relation to the written or electronic records concerned as if they were documents of which possession had been taken under section 176 of that Act.

Decision notices

62

In relation to any notice given by the Regulator to a person which, by virtue of this Chapter, is to be treated as a decision notice given under the 2000 Act—

(a) it is immaterial that the notice does not meet the requirements specified in subsection (1)(b) to (e) of section 388 of that Act (decision notices); and

(b) that section is to be read as if—

(i) subsection (2) were omitted;

(ii) in subsection (3) the words from “which relates” to the end were omitted;

(iii) for subsections (4) and (5) there were substituted—

(4) A further decision notice given under subsection (3) may vary the original notice. (5) If the person to whom a decision notice is given under subsection (3) had the right to refer the matter to which the original decision notice related to the First-tier Tribunal under section 13 of the Compensation Act 2006, that person has the right to refer the matter to which the decision notice under subsection (3) relates to the Tribunal.

Conditions and directions

63

(1) This article applies where, in relation to a relevant person—

(a) the Regulator—

(i) granted an authorisation under regulation 12(1) of the 2006 Regulations subject to a condition (“relevant condition”);

(ii) in relation to an authorisation under regulation 12(1) of the 2006 Regulations—

(aa) made a variation of the authorisation under regulation 46(2)(b) of the 2006 Regulations (“relevant variation”) by limiting the classes of claims management services that the person authorised by the authorisation may undertake or provide or otherwise varying the conditions of the authorisation; or

(bb) suspended the authorisation for a period under regulation 46(2)(a) of the 2006 Regulations (“relevant suspension”); or

(iii) gave a direction (“relevant direction”) to the relevant person under regulation 29(3) of the 2006 Regulations; and

(b) immediately before 1st April 2019, the relevant condition, the relevant variation, the relevant suspension or the relevant direction still has effect.

(2) A relevant condition is to be treated as a requirement imposed by the FCA under section 55L(1) of the 2000 Act[^f00100] which took effect on the date on which the authorisation was granted, and for that purpose the grant of the authorisation is to be treated as the giving by the FCA of a Part 4A permission.

(3) A relevant suspension is to be treated as a suspension imposed by the FCA under section 206A(1) of the 2000 Act which took effect—

(a) on 1st April 2019 for the purposes of section 206A(3) of the 2000 Act; and

(b) on the date on which the authorisation was suspended for all other purposes.

(4) A relevant direction is to be treated as a requirement imposed by the FCA under section 55L(3) of the 2000 Act which took effect on the date on which the direction was given.

(5) Where a relevant variation imposed a limitation or, by varying conditions (including imposing any additional condition), imposed a new or revised requirement, the limitation or the requirement is to be treated as a requirement imposed by the FCA under section 55L(3) of the 2000 Act which took effect on the date on which the variation was made.

(6) For the purposes of paragraphs (4) and (5) the relevant person is to be treated as having had, on the date on which the direction was given or the variation was made, a Part 4A permission to carry on a regulated claims management activity.

Fees and invoices

64

(1) This article applies where—

(a) the Regulator issued an invoice to a person under regulation 15(1)(b) of the 2006 Regulations (determinations of fees); and

(b) on 1st April 2019, that person has not paid the Regulator the amount of the annual fee in accordance with the invoice.

(2) The amount payable under the invoice is payable to the FCA.

(3) If the whole or any part of the amount payable under the invoice has not been paid within one month after the date on which the invoice was issued, the FCA may recover the amount outstanding as a civil debt.

CHAPTER 3 — Appeals and references

Continuation of appeals commenced before 1st April 2019

65

(1) This article applies where, on or before 1st April 2019—

(a) a person has submitted notice of an appeal to the First-tier Tribunal under section 13 of the 2006 Act (appeals and references to Tribunal) against a decision of the Regulator (“the relevant decision”); and

(b) the appeal has not been determined.

(2) The appeal is to continue as if the FCA had made the relevant decision, and for that purpose the FCA is substituted for the Regulator as a party to the appeal.

Right to appeal after 1st April 2019 against a decision of the Regulator

66

(1) This article applies where—

(a) before 1st April 2019, a person (“A”) had a right to appeal to the First-tier Tribunal under section 13 of the 2006 Act against a decision of the Regulator (“the relevant decision”);

(b) A had not exercised that right on or before 1st April 2019; and

(c) on 1st April 2019, the period within which, in the absence of this Order, the appeal could have been made has not ended.

(2) A may appeal to the Tribunal in respect of the relevant decision before the end of the period within which, in the absence of this Order, an appeal to the First-tier Tribunal could have been made.

(3) Section 133 of the 2000 Act[^f00101] (proceedings before Tribunal: general provision) applies in the case of an appeal to the Tribunal under paragraph (2).

(4) For the purposes of that section, in relation to such an appeal, the relevant decision is to be treated as a decision of the FCA and a disciplinary reference.

Continuation of references made by the Regulator to the First-tier Tribunal

67

(1) This article applies to any reference of a complaint or question (“the relevant reference”) which—

(a) was made by the Regulator to the First-tier Tribunal under section 13(2) of the 2006 Act; and

(b) has not resulted, on or before 1st April 2019, in any decision or action taken by that tribunal under section 13(3) of that Act.

(2) The FCA may continue to refer the complaint or question which is the substance of the relevant reference, and is for that purpose substituted for the Regulator as a party to the reference.

CHAPTER 4 — Complaints: the Legal Ombudsman and the Financial Ombudsman Service

Interpretation

68

In this Chapter—

“compulsory jurisdiction” has the same meaning as it has in the 2000 Act[^f00102];

“former scheme” means the scheme operated by the Office for Legal Complaints under Part 6 of the 2007 Act (legal complaints)[^f00103];

“new scheme” means the scheme for which provision is made in Part 16 of the 2000 Act (the ombudsman scheme);

“relevant complaint” means a relevant existing complaint or a relevant new complaint;

“relevant existing complaint” means a complaint of a kind specified in article 69(1);

“relevant new complaint” means a complaint of a kind specified in article 70(1); and

“scheme operator” has the same meaning as it has in Part 16 of the 2000 Act[^f00104].

Complaints made before 1st April 2019 not concluded by that date

69

(1) This article applies to a complaint which—

(a) was referred under the former scheme before 1st April 2019 by a person who was at that time entitled under the terms of the former scheme to refer the complaint;

(b) relates to the provision of claims management services (within the meaning given in section 4(2) of the 2006 Act); and

(2) Subject to articles 71 and 72, a relevant existing complaint is to be dealt with as if it had been referred under the new scheme in compliance with rules made by the FCA under paragraph 13 of Schedule 17[^f00105] to the 2000 Act.

(3) For the purposes of paragraph (1), except where paragraph (5) applies, a complaint is to be treated as concluded on 1st April 2019 where, before that date—

(a) the complainant notified the ombudsman of the complainant’s rejection of a determination under section 137 of the 2007 Act (determination of complaints);

(b) the complainant accepted a determination under that section, and any direction contained in the determination was fully complied with;

(c) the complaint was resolved otherwise than by a determination under that section, and any direction or agreement forming part of the resolution was fully complied with;

(d) the complaint was dismissed in accordance with provision made in scheme rules under section 133(3)(a) of the 2007 Act; or

(e) the complaint was referred with the consent of the complainant to another body in accordance with provision made in scheme rules under section 133(3)(b) of the 2007 Act.

(4) For the purposes of paragraph (3)(b) the cases in which a direction contained in the determination of a complaint was fully complied with include a case where, in relation to such a direction, the court has not yet heard an application under section 141(2) or (3) of the 2007 Act (enforcement by complainant of directions under section 137 of that Act).

(5) This paragraph applies where, in relation to a complaint referred under the former scheme—

(a) an ombudsman did not decide, before 1st April 2019, whether the respondent would be required to pay a charge under rules made in compliance with section 136(1) of the 2007 Act; or

(b) an ombudsman did, before that date, require the respondent to pay such a charge and the charge has not been paid.

(6) For the purposes of paragraph (2) it is immaterial that the condition set out in section 226(2)(c) of the 2000 Act (compulsory jurisdiction) is not met in relation to the complaint.

Complaints made on or after 1st April 2019 about acts or omissions before that date

70

(1) This article applies to a complaint—

(a) about an act or omission which occurred before 1st April 2019 in relation to the provision of claims management services (within the meaning given in section 4(2) of the 2006 Act);

(b) which had not, before that date, been referred under the former scheme by a person who was entitled under the terms of the former scheme to refer the complaint; and

(2) The conditions are that—

(a) in relation to the compulsory jurisdiction, the complainant falls within a class of person specified as eligible in the compulsory jurisdiction rules (within the meaning given by section 226(3) of the 2000 Act); and

(b) the complainant wishes to have the complaint dealt with under the new scheme.

(3) Where the condition set out in paragraph (2)(a) is not met in relation to a complaint, an ombudsman may nonetheless treat the complaint as if it does meet that condition if the complainant would have been entitled, immediately before 1st April 2019, to refer the complaint under the former scheme.

(4) A relevant new complaint—

(a) may be referred under the new scheme; and

(b) upon referral, subject to articles 71 and 73, is to be dealt with in the same way as any other complaint referred under the new scheme.

(5) For the purposes of paragraph (4), it is immaterial that the conditions set out in section 226(2)(b) and (c) of the 2000 Act are not met in relation to the complaint.

Procedure for dealing with relevant complaints

71

(1) In this article “scheme rules” means rules made under paragraph 14(1) of Schedule 17 to the 2000 Act (the scheme operator’s rules).

(2) A relevant existing complaint is to be treated as if it had been referred in accordance with any applicable procedure for reference of complaints set out in scheme rules.

(3) Relevant complaints are to be dealt with in accordance with the procedure for the investigation, consideration and determination of complaints set out in scheme rules, and for those purposes scheme rules apply with the modifications in paragraphs (4) to (7).

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