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

• (4) In determining a relevant existing complaint, an ombudsman is to have no regard to rules made under paragraph 14(2)(a) of Schedule 17 to the 2000 Act (rules specifying matters to be taken into account in determining whether an act or omission was fair and reasonable).

• (5) Where an ombudsman is deciding whether to dismiss a complaint without a consideration of its merits in accordance with rules made under paragraph 14(2)(b) and (3) of Schedule 17 to the 2000 Act (“relevant rules”)—

• (a) paragraph (6) applies if the complaint is a relevant existing complaint; and

• (b) paragraphs (6) and (7) apply if the complaint is a relevant new complaint.

• (6) An ombudsman must consider whether the complaint would have been dismissed under the rules of the former scheme, if the decision were being made immediately before 1st April 2019, and if the ombudsman considers that the complaint—

• (a) would have been dismissed under the rules of the former scheme; or

• (b) should be dismissed under the relevant rules,

the ombudsman may dismiss the complaint.

• (7) The corresponding rules of the former scheme are to be read as if they were subject to paragraph 13 of Schedule 3 to the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015[^f00106] (grounds to refuse to deal with a dispute).

• (8) Paragraph (9) applies to a relevant existing complaint where—

• (a) the complainant accepted a determination under section 137 of the 2007 Act before 1st April 2019; and

• (b) a direction contained in that determination had not been complied with on or before that date.

• (9) A direction made under—

• (a) section 137(2)(c) of the 2007 Act is to be treated as a money award (within the meaning given by section 229(2)(a) of the 2000 Act) for the purposes of section 229(8)(b) and paragraph 16 of Schedule 17 to the 2000 Act; and

• (b) any other sub-paragraph of section 137(2) of the 2007 Act is to be treated as a direction under section 229(2)(b) of the 2000 Act for the purposes of section 229(9) and (10) of the 2000 Act.

Determination of relevant existing complaints

72

• (1) In this article, except for the references in paragraphs (2) and (4) to sections of the 2007 Act, a reference to a numbered section is a reference to the section so numbered in the 2000 Act.

• (2) Where a relevant existing complaint is to be determined under the new scheme, the complaint must, so far as practicable, be determined by reference to such criteria as would have applied to the determination of the complaint under the former scheme immediately before 1st April 2019 by virtue of scheme rules under section 133 of the 2007 Act.

• (3) Sections 228[^f00107] (determination under the compulsory jurisdiction) and 230A (reports of determinations) apply in relation to the determination of a relevant existing complaint with the following modifications—

• (a) section 228 is to be read as if subsection (2) were omitted; and

• (b) section 230A(1)[^f00108] is to be read as if the reference to any determination made under Part 16 included the determination of the relevant existing complaint.

• (4) The determination of a relevant existing complaint may contain any one or more of the directions set out in subsection (2) of section 137 of the 2007 Act, and for those purposes—

• (a) a direction under subsection (2)(c) of that section, is to be treated as a money award (within the meaning given by section 229(2)(a)[^f00109]) for the purposes of paragraph 16 of Schedule 17 to the 2000 Act; and

• (b) any other direction is to be treated as a direction under section 229(2)(b) for the purposes of section 229(9) and (10).

• (5) An ombudsman may, on determining a relevant existing complaint, award costs having regard to provision for the award of costs made in rules of the former scheme, and for those purposes—

• (a) it does not matter whether the award is attributable to an act or omission which occurs before 1st April 2019 or to an act or omission which occurs on or after that date; and

• (b) section 230(7) of, and paragraph 16 of Schedule 17 to, the 2000 Act apply in relation to the award as they apply in relation to an award of costs made in accordance with rules under section 230(1).

Determination of relevant new complaints

73

• (1) In this article, except for the references in paragraph (5) to section 137 of the 2007 Act, a reference to a numbered section is a reference to the section so numbered in the 2000 Act.

• (2) Subject to paragraphs (3) to (5), a relevant new complaint is to be determined by reference to the criteria applicable to the determination of any other complaint referred under the new scheme.

• (3) The provisions specified in paragraph (4) apply in relation to a relevant new complaint with the modifications in paragraph (5).

• (4) Paragraph (5) applies for the purposes of determining, in relation to a relevant new complaint—

• (a) under section 228(2), what is fair and reasonable in all the circumstances of the case;

• (b) under section 229(2)(a), what amount, if any, constitutes fair compensation for loss or damage suffered by the complainant; and

• (c) under section 229(2)(b), what steps would be just and appropriate in any direction under that section.

• (5) An ombudsman may take into account—

• (a) what an ombudsman determining the complaint under the former scheme might reasonably have considered fair and reasonable in all the circumstances of the case;

• (b) what amount an ombudsman determining the complaint under the former scheme might reasonably have directed the respondent to pay under section 137(2)(c) of the 2007 Act; and

• (c) what other steps an ombudsman determining the complaint under the former scheme might reasonably have directed the respondent to take under section 137(2) of the 2007 Act.

Funding and charges

74

• (1) Paragraphs (2) and (3) apply to a complaint referred under the former scheme which is a relevant existing complaint by virtue only of article 69(5)(a).

• (2) The ombudsman who is dealing with the complaint must decide under rules made in compliance with section 136(1) of the 2007 Act whether the respondent is to be required to pay a charge under those rules.

• (3) Where the respondent is required to pay a charge under those rules, the charge is payable to the scheme operator.

• (4) Paragraph (5) applies to a complaint referred under the former scheme which is a relevant existing complaint by virtue only of article 69(5)(b).

• (5) The charge which the respondent was required to pay under rules made in compliance with section 136(1) of the 2007 Act is payable to the scheme operator.

Surplus fees

75

• (1) In this article, “relevant OLC expenditure”[^f00110] has the meaning given in section 174A of the 2007 Act[^f00111].

• (2) Paragraph (3) applies to any periodic fees charged by the Lord Chancellor to 2006 Act authorised persons under section 174A of the 2007 Act for the purposes of meeting any costs incurred by the Lord Chancellor in respect of relevant OLC expenditure.

• (3) Where, immediately before 1st April 2019, the periodic fees held by the Lord Chancellor exceeded the Lord Chancellor’s costs incurred in respect of relevant OLC expenditure, those fees may be paid—

• (a) to the OLC for the purpose of funding applications under section 141(2) or (3) of the 2007 Act falling within article 69(4); or

• (b) to the FCA or the scheme operator for the purpose of funding the operation of the new scheme under section 234(1)(b) of the 2000 Act (industry funding).

Exemption from liability in damages

76

Paragraph 10(1) of Schedule 17 to the 2000 Act[^f00112] (exemption from liability in damages) applies to the discharge, or purported discharge, of any functions by virtue of this Chapter in relation to dealing with a relevant complaint (“relevant functions”), and is to be read for those purposes as if—

• (a) the reference to functions under the 2000 Act included a reference to relevant functions; and

• (b) the reference to the compulsory jurisdiction included a reference to the jurisdiction of the new scheme which results from this Chapter.

Privilege

77

Paragraph 11 of Schedule 17 to the 2000 Act[^f00113] (privilege) applies to proceedings in relation to a relevant complaint, and is to be read for those purposes as if the reference to the compulsory jurisdiction included a reference to the jurisdiction of the new scheme enacted by this Chapter.

Record-keeping and reporting requirements relating to relevant complaints

78

The FCA may make rules applying to 2000 Act authorised persons with respect to the keeping of records and the making of reports in relation to relevant complaints.

Information and reports

79

• (1) Sections 230A, 231, 232 and 232A of the 2000 Act apply in relation to a relevant complaint as they apply in relation to a complaint which relates to an act or omission of a person in carrying on an activity to which compulsory jurisdiction rules (within the meaning given by section 226(3) of the 2000 Act) apply.

• (2) This paragraph applies where—

• (a) the ombudsman who was dealing with a relevant complaint under the former scheme certified to the court under section 149(2) of the 2007 Act a failure to comply with a requirement imposed under section 147(1) of that Act; and

• (b) on 1st April 2019, the court had not concluded its enquiry into the case with a finding that the defaulter failed or did not fail without reasonable excuse to comply with the requirement.

• (3) Where paragraph (2) applies—

• (a) the court may continue its enquiry into the case under section 149(3) of the 2007 Act; and

• (b) the ombudsman dealing with the complaint under the new scheme may continue to assist the court with that enquiry, and for that purpose is to be treated as having made the certification under section 149(2).

CHAPTER 5 — Temporary Permission

Temporary permission

80

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

• (a) immediately before 1st April 2019—

• (i) was a 2006 Act authorised person;

• (ii) was providing services which, if Part 2 of the 2006 Act had extended to Scotland, would have been regulated claims management services (within the meaning given by section 4 of the 2006 Act); or

• (iii) in relation to a claim which a person has by virtue of section 75(1) of the Consumer Credit Act 1974, was providing services of a kind which, if performed on or after 1st April 2019, would constitute the carrying on of an activity of the kind specified by—

• (aa) article 89G (seeking out, referrals and identification of claims or potential claims) of the 2001 Order; or

• (bb) article 89I (advice, investigation or representation of a financial services or financial product claim) of the 2001 Order; and

• (b) during the period beginning with the date specified by the FCA in a direction given under article 81 and ending on 31st March 2019—

• (i) notifies the FCA of a desire to be registered for temporary permission under this article; and

• (ii) pays to the FCA any fee payable under its rules by any person desiring to be so registered.

• (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—

• (a) written notice under regulation 13(5) of the 2006 Regulations of a decision to refuse to grant an authorisation (“refusal decision”); or

• (b) written notice given under regulation 47 of the 2006 Regulations of a decision to cancel P’s authorisation (“cancellation decision”).

• (3) The conditions are that—

• (a) in the case of a notice under regulation 13(5) of the 2006 Regulations—

• (i) where, before 1st April 2019, P submitted notice of an appeal to the First-tier Tribunal under section 13 of the 2006 Act[^f00114] (appeals and references to Tribunal) with respect to the refusal decision, the appeal—

• (aa) was not determined before 1st April 2019; or

• (bb) was determined before 1st April 2019 by way of a remittal of the refusal decision to the Regulator under section 13(3)(e) of the 2006 Act but a further decision by the Regulator in relation to the remittal has not been taken; or

• (ii) 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;

• (b) in the case of a notice under regulation 47 of the 2006 Regulations, the cancellation had effect before 1st April 2019, and—

• (i) 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—

• (aa) was not determined before 1st April 2019; or

• (bb) was determined before 1st April 2019 by way of 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 remittal has not been taken; or

• (ii) 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.

• (4) On and after 1st April 2019 a relevant person has a temporary permission to carry on—

• (a) an activity of the kind specified by any of articles 89G to 89M of the 2001 Order (specified kinds of claims management activity); and

• (b) so far as relevant to that activity, the activity specified by article 64 of the 2001 Order.

• (5) Subject to article 83(2), a temporary permission to carry on the activities referred to in paragraph (4) has effect—

• (a) in the case of P, as a Part 4A permission to carry on those activities which has been suspended by the FCA under section 206A of the 2000 Act; or

• (b) in the case of any other relevant person, as a Part 4A permission to carry on those activities.

• (6) For the purposes of paragraph (5)(a)—

• (a) P’s temporary permission is to be treated as if the period for which the suspension is to have effect were such period as ends on the date on which that permission is to be treated, under paragraph (8) or (10), as if its suspension had been withdrawn; and

• (b) section 206A of the 2000 Act is to be read as if subsection (3) were omitted.

• (7) “Relevant appeal” means—

• (a) where paragraph (3)(a)(i) or (b)(i) applies, P’s appeal to the First-tier Tribunal with respect to the refusal decision or the cancellation decision;

• (b) where paragraph (3)(a)(ii) or (b)(ii) applies, an appeal by P to the Tribunal with respect to the refusal decision or the cancellation decision made 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.

• (8) Where the relevant appeal is determined in P’s favour—

• (a) by a decision of the First-tier Tribunal or Tribunal (or by a decision of a higher court or tribunal made on an appeal against a decision of either tribunal); or

• (b) by a remittal of the refusal or cancellation decision under section 13(3)(e) of the 2006 Act which results in a reversal of that decision,

P’s temporary permission is to be treated as if its suspension had, on the date of the determination, been withdrawn by the FCA under section 206A(6) of the 2000 Act.

• (9) Where, before 1st April 2019, the First-tier Tribunal suspended the effect of the refusal decision or the cancellation decision under section 13(3A)(c) of the 2006 Act, P’s temporary permission is to be treated as a Part 4A permission which is not subject to suspension by the FCA under section 206A of the 2000 Act.

• (10) Where, at any time on or after 1st April 2019—

• (a) the First-tier Tribunal suspends the effect of the refusal decision or the cancellation decision under section 13(3A)(c) of the 2006 Act; or

• (b) the Tribunal suspends the effect of the refusal decision or the cancellation decision under rule 5(5) of the Tribunal Procedure (Upper Tribunal) Rules 2008[^f00115],

P’s temporary permission is to be treated as if its suspension by virtue of paragraph (5)(a) had, at that time, been withdrawn by the FCA under section 206A(6) of the 2000 Act.

Procedure for notifying the FCA of a desire to be registered for temporary permission

81

• (1) The FCA may give a direction specifying—

• (a) the manner in which a desire to be registered for temporary permission under article 80 is required to be notified to the FCA;

• (b) the date on or after which notification of such a desire may be given; and

• (c) such information as the FCA may reasonably require to be contained in, or supplied with, that notification.

• (2) A direction under this article may impose different requirements for different circumstances or different categories of notification.

• (3) At any time after receiving notification under this article, the FCA may require the person giving the notification to provide the FCA with such further information as it reasonably considers necessary to enable it to discharge its functions.

• (4) The FCA may require information to be provided in such form, or verified in such manner, as the FCA may direct.

• (5) A direction given under this article may be amended by further direction.

Duration of temporary permission

82

• (1) In this article a reference to a numbered section is a reference to the section so numbered in the 2000 Act.

• (2) In this article—

• “last application date” means the last date on which a person (“A”) who has a temporary permission to carry on an activity referred to in article 80(4) (temporary permission) may make a relevant application; and

• “relevant application” means— where, immediately before 1st April 2019, A is a 2000 Act authorised person, an application by A under section 55H (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; where, immediately before 1st April 2019, A is not a 2000 Act authorised person, an application by A under section 55A (application for permission) for permission to carry on regulated claims management activity.

• (3) The FCA must give a direction specifying the last application date.

• (4) A’s temporary permission ceases to have effect—

• (a) where A makes a relevant application on or before the last application date, on the date on which that application is determined;

• (b) where A does not make a relevant application on or before the last application date, on the date on which the period of 30 days, beginning with the day after the last application date, expires;

• (c) on the date specified by the FCA in a notice of cancellation of A’s temporary permission, which may be given where—

• (i) by virtue of article 80(5)(a), A’s temporary permission has effect as a Part 4A permission suspended by the FCA under section 206A of the 2000 Act; and

• (ii) A’s relevant appeal (within the meaning of article 80(7)) is determined otherwise than in A’s favour.

• (5) Paragraph (4) does not affect the exercise by the FCA, in relation to A’s temporary permission, of the powers conferred on it by the 2000 Act to vary, cancel or suspend a Part 4A permission.

• (6) For the purposes of paragraph (4)(a), the date on which a relevant application is determined is—

• (a) where A withdraws the application by written notice under section 55V(4), the date on which the period of 30 days beginning with the date on which the notice is given expires;

• (b) where the FCA grants the application, the date stated in its written notice under section 55V(5) as the date from which the permission has effect;

• (c) where the FCA decides to—

• (i) give or vary a Part 4A permission under section 55X(4)(a), (b), (c) or (d); or

• (ii) refuse the application under section 55X(4)(f),

the date on which the period of 30 days, beginning with the date on which the FCA gives the decision notice under that section, expires.

• (7) During the period of 30 days referred to in paragraphs (4)(b) and (6)(a) and (c), A may not enter, or offer to enter, into an agreement the making or performance of which would constitute regulated claims management activity.

• (8) The prohibition in paragraph (7) has the same effect as a requirement imposed by the FCA under section 55L.

• (9) A direction given under paragraph (3) may—

• (a) specify different dates for different classes of person or for different descriptions of activities;

• (b) specify a date before which a relevant application may not be made (“the opening date”), provided that the opening date is not less than two months before the last application date;

• (c) be amended by further direction.

• (10) Subject to article 83(7) and (8), a relevant application made before the opening date is to be treated as if it had not been made.

• (11) Paragraphs (12) and (13) apply where—

• (a) A’s temporary permission ceases to have effect by virtue of paragraph (4) or the exercise by the FCA of the powers conferred on it by the 2000 Act to cancel a Part 4A permission; and

• (b) A consequently ceases, on the date on which A’s temporary permission ceases (“the cessation date”), to be a 2000 Act authorised person.

• (12) Paragraph 13 applies in relation to—

• (a) any act or omission by A which occurred before the cessation date; or

• (b) the contravention by A of any requirement imposed on A under section 55L (imposition of requirements by FCA) or 404F(7) (other definitions) which—

• (i) is in effect immediately before the cessation date; and

• (ii) which continues to have effect in accordance with paragraph (14).

• (13) Part 11(information gathering and investigations), Part 14 (disciplinary measures) and section 384 (power of the FCA to require restitution) of the 2000 Act are to be read as if a reference to an authorised person included a reference to A.

• (14) The requirement referred to in paragraph 12(b) continues to have effect after the cessation date until such time as it is cancelled by the FCA, which the FCA must do when it is satisfied that it is no longer necessary for that requirement to continue to have effect.

Application of the 2000 Act to persons with a temporary permission

83

• (1) In this article a reference to a numbered section is a reference to the section so numbered in the 2000 Act.

• (2) This article applies in relation to a person (“A”) who has a temporary permission to carry on an activity referred to in article 80(4) (“temporary permission”).

• (3) A’s temporary permission does not have effect as a Part 4A permission for the purposes of—

• (a) section 38(2) (exemption orders);

• (b) section 39(1C)(a) (exemption of appointed representatives);

• (c) section 55A(3) (application for permission).

• (4) For the purposes of section 327(7) and (9)[^f00116] (exemption from the general prohibition), A is not to be treated as carrying on a regulated claims management activity where A carries on that activity pursuant to A’s temporary permission.

• (5) For the purposes of section 21(2) (restrictions on financial promotion), if A does not have permission other than a temporary permission, A may only approve the content of a communication if the communication invites or induces a person to enter into (or offer to enter into) an agreement in respect of a regulated activity for which A has temporary permission.

• (6) For the purposes of section 39 (exemption of appointed representatives), A may be an appointed representative in relation to an activity which A does not have temporary permission to carry on.

• (7) Where A applies to the FCA—

• (a) under section 55A for permission to carry on a regulated activity which is not a regulated claims management activity; or

• (b) under section 55H to vary A’s Part 4A permission by adding to the activities to which the permission relates a regulated activity which is not a regulated claims management activity,

the application may be treated by the FCA as relating also to some or all of the regulated activities for which A has temporary permission.

• (8) If the FCA treats the application as relating to some or all of the regulated activities for which A has temporary permission, article 82(10) does not apply in relation to the application.

• (9) The duty imposed by section 55B(3) (satisfaction of threshold conditions) does not apply where the FCA exercises its power in relation to A under—

• (a) section 55J[^f00117] (variation or cancellation on initiative of regulator);

• (b) section 55H (variation by FCA at request of authorised person) to remove a regulated activity from those for which A has temporary permission;

• (c) section 55L (imposition of requirements by FCA).

• (10) Where, immediately before 1st April 2019, A is not a 2000 Act authorised person, A is not to be treated, by virtue of article 80(5), as a 2000 Act authorised person for the purposes of Part 12 of the 2000 Act (control over authorised persons).

• (11) For the purposes of the compensation scheme established under section 213, a claim made against A in connection with any activity which A’s temporary permission permits A to carry on is to be treated as if it were not made in connection with regulated activities carried on by A.

• (12) The activity which A’s temporary permission permits A to carry on is to be treated as if it were not a regulated activity for the purposes of—

• (a) construing the reference to the only regulated activities that a person carries on, or seeks to carry on, which is contained in paragraphs 2C(1A), 2D(3A) and 2F(3) of Schedule 6 to the 2000 Act (threshold conditions: Part 4A permission: authorised persons who are not PRA-authorised persons); and

• (b) article 6A(1)(b) of the Financial Services and Markets Act 2000 (Controllers) (Exemption) Order 2009[^f00118].

PART 4 — Rules and guidance

Claims management related rules and guidance made by the FCA

84

• (1) This article applies in respect of rules made or guidance given by the FCA which relate to regulated claims management activity or the carrying on of such activity.

• (2) Section 1B(4) of the 2000 Act (competition duty) does not apply to the extent that—

• (a) the claims management related rules are the same as, or substantially the same as, or have the same, or substantially the same, effect as any of the provisions in Part 2 of the Compensation Act 2006[^f00119] provisions in force immediately before Part 2 of the Compensation Act 2006 was repealed; or

• (b) the claims management related guidance is the same as, or substantially the same as, or has the same, or substantially the same, effect as any of the provisions in Part 2 of the Compensation Act 2006 provisions in force immediately before Part 2 of the Compensation Act 2006 was repealed.

• (3) Any requirement imposed on the FCA—

• (a) to publish a draft of rules, guidance or any other instrument or document and invite representations about it; or

• (b) to consult particular persons,

may be satisfied by things done by the FCA before the date on which this article comes into force.

• (4) The Compensation Act 2006 provisions are to be treated as if they had effect in Scotland for the purposes of—

• (a) paragraph (2); and

• (b) paragraph 7 of Schedule 5 to the Financial Guidance and Claims Act 2018[^f00120].

• (5) For the purposes of this article, the “Compensation Act 2006 provisions” are—

• (a) the provisions of the Compensation Act 2006;

• (b) any subordinate legislation or rules made or guidance or codes of practice issued under that Act in force immediately before Part 2 of the Compensation Act 2006 was repealed; and

• (c) section 75 of the Consumer Credit Act 1974.

• (6) For the purpose of rules that are made by the FCA in respect of the transfer of the regulation of claims management activity to the FCA, section 138I of the 2000 Act applies for the purpose of the FCA’s cost benefit analysis in respect of the regulation of claims management activity as if for subsections (7) and (8) there were substituted –

(7) “Cost benefit analysis” means— (a) an analysis of the difference between the costs and benefits of the provisions set out in subsection (7A) and the costs and benefits that will arise in the application to England and Wales and Scotland – (i) if the proposed rules are made, or (ii) if subsection (5) applies, from the rules that have been made, and (b) subject to subsection (8), an estimate of that difference. (7A) For the purposes of subsection (7), the provisions applicable are— (a) the provisions of the Compensation Act 2006 in force immediately before Part 2 of that Act was repealed; and (b) any subordinate legislation or rules made, or guidance or codes of practice issued, under that Act. (7B) For the purposes of subsection (7), the provisions of the Compensation Act 2006 are to be treated as if— (a) they had effect in Scotland; and (b) they included section 75 of the Consumer Credit Act 1974. (8) If, in the opinion of the FCA— (a) the difference referred to in subsection (7) cannot reasonably be estimated; or (b) it is not reasonably practicable to produce an estimate, the cost benefit analysis need not estimate the difference but must include a statement of the FCA’s opinion and an explanation of it.

• (7) The requirements of section 138I of the 2000 Act (as modified above) in so far as they apply to a proposal to make rules to which this article applies may be satisfied by things done (wholly or in part) before the date on which this article comes into force.

• (8) It is immaterial for the purposes of paragraph (7) if, when the things were done, they were not compatible with section 138I of the 2000 Act.

Designation by the FCA of the Regulator’s Rules

85

• (1) In this article, “the Regulator” has the meaning given in paragraph 2 of Schedule 4 to the Financial Guidance and Claims Act 2018[^f00121] (“the 2018 Act”).

• (2) To designate or modify relevant rules for the purposes of paragraphs 8 and 9 of Schedule 5 to the 2018 Act (designation of Regulator’s rules), the FCA must make an instrument in writing which specifies, or more than one instrument in writing which between them specify—

• (a) the relevant rules;

• (b) any modifications being made to the rules;

• (c) the provision under Part 2 of the Compensation Act 2006 under which the relevant rules were made;

• (d) the comparable provision in the 2000 Act by virtue of which the designated rule is to be treated as having been made; and

• (e) the date on which the designation is to come into effect.

• (3) An instrument which satisfies the requirements of paragraph (2) is a designating instrument.

• (4) The FCA must publish each designating instrument in the way appearing to the designating body to be best calculated to bring it to the attention of the public.

• (5) A person is not to be taken to have contravened a designating instrument if the person shows that, at the time of the alleged contravention, the designating instrument concerned had not been published.

• (6) A designating instrument is to be treated as a rule-making instrument for the purposes of section 138H (verification of rules) of the 2000 Act.

• (7) A designating instrument may contain provision other than that required by paragraph (2).

• (8) The making of a designating instrument is a legislative function for the purposes of paragraph 8(2) of Schedule 1ZA to the 2000 Act (arrangements for discharging functions).

PART 5 — Miscellaneous

Interpretation

86

In this Part—

• “the 2006 Act” means the Compensation Act 2006;

• “the 2012 Act” means the Financial Services Act 2012[^f00122];

• “the 2018 Act” means the Financial Guidance and Claims Act 2018; and

• “the OLC”, “the FOS” and “the Regulator” have the meanings given in paragraph 2 of Schedule 4 to the 2018 Act.

Legal professional privilege

87

• (1) The FCA is entitled to claim legal professional privilege or, in Scotland, confidentiality of communications in respect of legally privileged information disclosed to the FCA by the Regulator under paragraph (4).

• (2) The FOS is entitled to claim legal professional privilege or, in Scotland, confidentiality of communications in respect of legally privileged information disclosed to the FOS by the OLC under paragraph (4).

• (3) In this article, “legally privileged information” means information received or generated by the Regulator or the OLC before 1st April 2019, in respect of which the Regulator or the OLC would have been able, before that date, to maintain a claim for legal professional privilege or confidentiality of communications in legal proceedings.

• (4) For the purposes of this article legally privileged information is disclosed where—

• (a) it is transferred to the FCA by the Regulator—

• (i) under a transfer scheme made under paragraph 3 of Schedule 4 to the 2018 Act (Regulation of Claims Management Services: Transfer Schemes); or

• (ii) otherwise in connection with functions of the FCA becoming exercisable in respect of an activity which—

• (aa) ceases on 1st April 2019 to be an activity in respect of which an authorisation under section 4(1)(a) of the 2006 Act (provision of regulated claims management services) is required or would be required but for the exemption or waiver conferred by subsections (1)(b) or (c) of that section; and

• (bb) becomes on that date a regulated activity for the purposes of the 2000 Act.

• (b) it is transferred to the FOS by the OLC—

• (i) under a transfer scheme made under paragraph 13 of Schedule 4 to the 2018 Act; or

• (ii) otherwise in connection with functions of the FOS becoming exercisable in respect of an activity which—

• (aa) ceases on 1st April 2019 to be an activity in respect of which an authorisation under section 4(1)(a) of the 2006 Act (provision of regulated claims management services) is required or would be required but for the exemption or waiver conferred by subsections (1)(b) or (c) of that section; and

• (bb) becomes on that date a regulated activity for the purposes of the 2000 Act.

Complaints against the Regulator where no determination made before 1st April 2019

88

• (1) Paragraphs (2) and (3) apply if, before 1st April 2019—

• (a) a person (“A”) had made a complaint against the Regulator about the service it had provided; and

• (b) that complaint had not been finally determined by the Regulator in accordance with its complaint procedures.

• (2) The complaint referred to in paragraph (1) is to be treated as a complaint made under the FCA’s complaints scheme within the meaning of section 84(1)(a) of the 2012 Act whether or not it is made in relation to any of the FCA’s relevant functions.

Definition of “consumer”

89

• (1) For the purposes of the provisions listed in paragraph (2), “consumer” includes a person—

• (a) who before 1st April 2019 received services from persons authorised, or by any person providing services for which an authorisation was required, under section 5 of the 2006 Act;

• (b) who has rights or interests which are derived from, or are otherwise attributable to, the use of any such services by other persons;

• (c) who has rights or interests which may be adversely affected by the use of any such services by a person acting on their behalf or in a fiduciary capacity in relation to them; or

• (d) in respect of whom a person carries on an activity specified in article 89G of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001[^f00123], whether that activity is a regulated activity or is, by reason of an exclusion provided for under the 2001 Order or under the 2000 Act, not a regulated activity.

• (2) The provisions are—

• (a) section 1G of the 2000 Act[^f00124] (meaning of “consumer”);

• (b) section 404E of the 2000 Act[^f00125] (meaning of “consumers”); and

• (c) section 425A of the 2000 Act[^f00126] (consumers: regulated activities etc carried on by authorised persons).

• (3) For the purposes of this article—

• (a) where a person provided a service mentioned in paragraph (1) as a trustee, the persons who are, have been or may be beneficiaries of the trust are to be treated as persons who use, have used, or may use the service; and

• (b) a person who deals, or dealt, with another person (“A”) in the course of A providing a service mentioned in paragraph (1) is to be treated as using, or having used, the service.

PART 6 — Consequential amendments, revocations and saving and supplemental provisions

CHAPTER 1 — Amendment of primary legislation

Courts and Legal Services Act 1990

90

In section 58AA of the Courts and Legal Services Act 1990[^f00127] (damages-based agreements), in subsection (7) for “Part 2 of the Compensation Act 2006 (see section 4(2) of that Act)” substitute “the Financial Services and Markets Act 2000 (see section 419A of that Act)”[^f00128].

Financial Services and Markets Act 2000

91

• (1) The 2000 Act is amended as follows.

• (2) In section 1G (meaning of “consumer”), in subsection 1—

• (a) in the words before paragraph (a) omit “who”;

• (b) in each of the paragraphs (a) to (e), at the beginning insert “who”;

• (c) at the end of paragraph (d) omit “or”;

• (d) at the end of paragraph (e) insert—

; or (f) in respect of whom a person carries on an activity which is specified in article 89G of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (seeking out etc claims) whether that activity, as carried on by that person, is a regulated activity, or is, by reason of an exclusion provided for under the 2001 Order or the 2000 Act, not a regulated activity.

• (3) In section 1I (meaning of “the UK financial system”) in paragraph (b) after “activities” insert “(including regulated claims management activities)”.

• (4) In section 63E (certification of employees by relevant authorised person) in subsection (8) for the definition of “customer” substitute—

• “customer”— in relation to an authorised person, means a person who is using, or who is or may be contemplating using, any of the services provided by the authorised person; and in relation to an authorised person carrying on a regulated claims management activity, also means (so far as not included in paragraph (a)) a person who has or may have a claim within the meaning of section 419A in respect of which the authorised person is carrying on a regulated claims management activity.

• (5) In section 327 (exemption from the general prohibition) after subsection (8) insert—

(9) The exemption in this section does not apply to the carrying on of a regulated claims management activity in Great Britain.

• (6) In section 404E (meaning of “consumers”)—

• (a) in subsection (1)—

• (i) in the words before paragraph (a) omit “who”;

• (ii) in paragraphs (a) and (b), at the beginning insert “who”;

• (iii) at the end of paragraph (a) omit “or”;

• (iv) at the end of paragraph (b) insert—

; or (c) in respect of whom a person carries on an activity which is specified in article 89G of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (seeking out etc claims) whether that activity, as carried on by that person, is a regulated activity or is, by reason of an exclusion provided for under the 2001 Order or the 2000 Act, not a regulated activity.

• (b) in subsection (2) in paragraph (c) the words from “to engage” to the end become sub-paragraph (i) and at the end of that sub-paragraph insert—

; or (ii) to engage in claims management activity;

; and

• (c) in subsection (6) after the definition of “credit institution” insert—

• “engage in claims management activity” has the meaning given by section 21;

• (7) In section 425A (consumers: regulated activities etc carried on by authorised persons), in subsection (2)—

• (a) in the words before paragraph (a) omit “who”;

• (b) in paragraphs (a) and (b), at the beginning insert “who”;

• (c) at the end of paragraph (b) omit “or”;

• (d) at the end of paragraph (c) insert—

; or (d) in respect of whom a person carries on an activity which is specified in article 89G of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (seeking out etc claims) whether that activity, as carried on by that person, is a regulated activity or is, by reason of an exclusion provided for under the 2001 Order or the 2000 Act, not a regulated activity.

Enterprise Act 2002

92

In the Enterprise Act 2002[^f00129]—

• (a) in Schedule 14, omit “Compensation Act 2006 (c. 29).”[^f00130]; and

• (b) in Schedule 15 omit “Compensation Act 2006 (c. 29).”.

Compensation Act 2006

93

Omit Part 2 of the Compensation Act 2006.

Tribunals, Courts and Enforcement Act 2007

94

In Schedule 6 to the Tribunals, Courts and Enforcement Act 2007[^f00131], in Part 4 (tribunals for the purposes of section 30 (transfer of functions of certain tribunals)) omit the entry for the Claims Management Services Tribunal.

Legal Services Act 2007

95

• (1) The Legal Services Act 2007[^f00132] is amended as follows.

• (2) In section 8 (the Consumer Panel), in subsection (5) for paragraph (e) substitute—

(e) an authorised person (within the meaning given in section 31 of the Financial Services and Markets Act 2000 (authorised persons)) in relation to regulated claims management activity (within the meaning given by section 417(1) of that Act (definitions));

• (3) In section 122 (appointment of the Chief Ombudsman and assistant ombudsmen), for subsection (3) substitute—

(3) It is a condition of appointment under subsection (1)(b) that the person appointed must not during the appointment carry on for or in expectation of any fee, gain or reward— (a) any activity which is a reserved legal activity, or (b) a regulated claims management activity (within the meaning given by section 417(1) of the Financial Services and Markets Act 2000 (definitions))

• (4) Omit section 161 (extension of Part 6 to claims management services).

• (5) In section 173 (the levy)—

• (a) in subsection (5) omit paragraph (b); and

• (b) in subsection (6)(b) omit the words from “or by virtue of” to the end.

• (6) Omit section 174A (OLC expenditure relating to claims management services)[^f00133].

• (7) Omit section 187 and Schedule 19 (amendments of Part 2 of the Compensation Act 2006 (claims management services)).

• (8) In section 206 (Parliamentary control of orders and regulations), in subsection (4) omit paragraph (oa)[^f00134].

• (9) In Schedule 1 (the Legal Services Board)—

• (a) in paragraph 2—

• (i) in sub-paragraph (3) for paragraph (b) substitute—

(b) carry on a regulated claims management activity (within the meaning given by section 417(1) of the Financial Services and Markets Act 2000 (definitions)), or

• (ii) in sub-paragraph (4) after paragraph (b) insert—

(ba) an authorised person (within the meaning given in section 31 of the Financial Services and Markets Act 2000 (authorised persons)) in relation to regulated claims management activity (within the meaning given by section 417(1) of that Act (definitions));

; and

• (b) in paragraph 3, in sub-paragraph (l) for “Part 2 of the Compensation Act 2006 (c. 29)” substitute “section 419A of the Financial Services and Markets Act 2000 (c. 8)”.

• (10) In Schedule 15 (the Office for Legal Complaints)—

• (a) in paragraph 2, in sub-paragraph (3) after paragraph (a) insert—

(aa) an authorised person (within the meaning given in section 31 of the Financial Services and Markets Act 2000 (authorised persons)) in relation to regulated claims management activity (within the meaning given by section 417(1) of that Act (definitions)),

; and

• (b) in paragraph 4, in sub-paragraph (i) for “Part 2 of the Compensation Act 2006 (c. 29)” substitute “section 419A of the Financial Services and Markets Act 2000 (c. 8)”.

Legal Aid, Sentencing and Punishment of Offenders Act 2012

96

In the Legal Aid, Sentencing and Punishment of Offenders Act 2012[^f00135], in section 59 (regulators and regulated persons), in each table omit the entry relating to a person specified in the first column as “the Claims Management Regulator”.

Crime and Courts Act 2013

97

In Schedule 9 to the Crime and Courts Act 2013[^f00136] (single county court in England and Wales), in the list of provisions in paragraph 52(2) omit the entry “Compensation Act 2006: section 8(2),”.

Financial Services (Banking Reform) Act 2013

98

• (1) The Financial Services (Banking Reform) Act 2013[^f00137] is amended as follows.

• (2) Omit section 139 (power to impose penalties on persons providing claims management services).

• (3) Omit section 140 (recovery of expenditure incurred by Office for Legal Complaints).

• (4) In section 147(2) (extent) omit paragraphs (b) and (c).

CHAPTER 2 — Amendment of secondary legislation

Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations 2001

99

• (1) The Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations 2001[^f00138] are amended as follows.

• (2) In Schedule 1 (disclosure of confidential information whether or not subject to single market restrictions), in Part 1 at the end insert—

Person	Functions
The Information Commissioner	All functions of that person so far as they are exercisable in relation to the provision of claims management services (within the meaning given in regulation 21A of the Privacy and Electronic Communications (EC Directive) Regulations 2003[^f00139])
The General Council of the Bar	(a) Its functions under arrangements which it has, or rules which it makes, in compliance with section 30(4) of the Financial Guidance and Claims Act 2018 (as applied by section 32(2) of that Act), for monitoring and enforcing the prohibitions in section 32(1) of that Act
	(b) Its functions under rules which it makes in compliance with section 33(1) of that Act
The Law Society of England and Wales	(a) Its functions under arrangements which it has, or rules which it makes, in compliance with section 30(4) of the Financial Guidance and Claims Act 2018 (as applied by section 32(2) of that Act), for monitoring and enforcing the prohibitions in section 32(1) of that Act
	(b) Its functions under rules which it makes in compliance with section 33(1) of that Act
The Chartered Institute of Legal Executives	(a) Its functions under arrangements which it has, or rules which it makes, in compliance with section 30(4) of the Financial Guidance and Claims Act 2018 (as applied by section 32(2) of that Act), for monitoring and enforcing the prohibitions in section 32(1) of that Act (b) Its functions under rules which it makes in compliance with section 33(1) of that Act

• (3) In Schedule 2 (disclosure of confidential information not subject to single market restrictions) omit the entry relating to a person specified in the first column as “The Claims Management Regulator”.

Legislative and Regulatory Reform (Regulatory Functions) Order 2007

100

In the Legislative and Regulatory Reform (Regulatory Functions) Order 2007[^f00140], in Part 2 of the Schedule omit the heading “Claims Management Services” and the entry “Part 2 of the Compensation Act 2006”.

Legal Services Act 2007 (Disclosure of Restricted Information) Order 2011

101

In the Legal Services Act 2007 (Disclosure of Restricted Information) Order 2011[^f00141], in Schedule 1 (list of persons to whom information may be disclosed) omit “The Claims Management Regulator”.

Damages-Based Agreements Regulations 2013

102

In the Damages-Based Agreements Regulations 2013[^f00142], in regulation 1(2) (interpretation), in the definition of “client”, for “section 4(2)(b) of the Compensation Act 2006” substitute “section 419A of the Financial Services and Markets Act 2000”.

Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Referral Fees) Regulations 2013

103

In the Schedule to the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Referral Fees) Regulations 2013[^f00143] (meaning of referral fees authorised person), in paragraph 3 insert at the end—

(h) a regulated claims management activity (within the meaning given by section 417(1) of the 2000 Act (definitions)).

Economic Growth (Regulatory Functions) Order 2017

104

In the Economic Growth (Regulatory Functions) Order 2017[^f00144], in Part 3 of the Schedule, for the entry under the heading “Claims Management Services” substitute “Part 2 of the Financial Guidance and Claims Act 2018[^f00145] (Claims Management Services)”.

CHAPTER 3 — Revocations

Revocations

105

In consequence of the repeal of Part 2 of the Compensation Act 2006 by article 93 the following statutory instruments are revoked—

• (a) the Compensation (Regulated Claims Management Services) Order 2006[^f00146];

• (b) the Compensation (Specification of Benefits) Order 2006[^f00147];

• (c) the Compensation (Claims Management Services) Regulations 2006[^f00148];

• (d) the Compensation (Exemptions) Order 2007[^f00149];

• (e) the Compensation (Exemptions) (Amendment) (No. 1) Order 2007[^f00150];

• (f) the Compensation (Claims Management Services) (Amendment) Regulations 2008[^f00151];

• (g) the Compensation (Claims Management Services) (Amendment) Regulations 2014[^f00152];

• (h) the Legal Services Act 2007 (Claims Management Complaints) (Fees) Regulations 2014[^f00153];

• (i) the Compensation (Claims Management Services) (Amendment) Regulations 2015[^f00154];

• (j) the Legal Services Act 2007 (Claims Management Complaints) (Fees) (Amendment) Regulations 2016[^f00155];

• (k) the Legal Services Act 2007 (Claims Management Complaints) (Fees) (Amendment) Regulations 2017[^f00156].

CHAPTER 4 — Saving and supplemental provisions

SECTION 1 — General provision

General scope of saving provisions

106

• (1) Paragraphs (3) and (4) apply where, in relation to an enactment which is amended by Chapter 1 or Chapter 2 of this Part or is revoked by Chapter 3 of this Part, it is provided in this Chapter that despite the amendment or the revocation a relevant provision continues to have effect for specified purposes.

• (2) “Relevant provision” means, in the case of an amendment, the provision which is amended or a specified provision of the enactment which is amended, and in the case of an enactment which is revoked, a specified provision of that enactment.

• (3) The relevant provision continues to have effect—

• (a) only for the specified purposes; and

• (b) with any modification made for those purposes.

• (4) Other provisions of the enactment which contains the relevant provision continue to have effect so far as is necessary to give effect to the saving made for the specified purposes.

SECTION 2 — Primary legislation

Courts and Legal Services Act 1990

107

Section 58AA of the Courts and Legal Services Act 1990 has effect in relation to any damages-based agreement made before 1st April 2019 without the amendment made by article 90.

Compensation Act 2006

108

• (1) In this article a reference to a numbered section is a reference to the section so numbered in the Compensation Act 2006.

• (2) Despite articles 93 and 95(7)—

• (a) sections 7, 10 and 11 (offences) continue to have effect for the purposes of—

• (i) article 55 (investigation and prosecution after 1st April 2019 in relation to conduct before that date) and article 57 (offences under the Compensation Act 2006: continuation of investigation commenced by the Regulator and institution of criminal proceedings) in relation to—

• (aa) an investigation of a kind specified in article 55(a)(i) or (b) or 57 and the resulting prosecution of any criminal proceedings;

• (bb) any conviction and sentencing of the defendant in such a prosecution;

• (ii) article 58 (continuation of criminal proceedings instituted by the Regulator) in relation to any criminal proceedings to which that article applies;

• (b) section 8(1) and (2) (power to apply for an injunction) continues to have effect for the purposes of article 59 (continuation of injunction applications made by the Regulator) in relation to any application for an injunction to which that article applies;

• (c) section 8(5), (6) and (7) (power to issue a search warrant) continues to have effect for the purposes of article 60 (continuation of application made by the Regulator for a search warrant) in relation to any application for the issue of a warrant to which that article applies;

• (d) sections 8(8), 9 and 15 and the Schedule to the Compensation Act 2006 (power to make regulations) continue to have effect for the purposes of article 111 (saving and supplemental provision for the Compensation (Claims Management Services) Regulations 2006);

• (e) section 13(1), (1A), (3) and (3A) (appeals and references to Tribunal)—

• (i) continues to have effect for the purposes of Part 3 of this Order in relation to any appeal to the First-tier Tribunal brought by a person under that section before 1st April 2019;

• (ii) is to be read for those purposes as if, in subsection (3)(e), the reference to the Regulator, and in subsection (3A)(d), the first reference to the Regulator, were references to the FCA;

• (f) section 13(2) and (3) continues to have effect for the purposes of article 67 (continuation of references made by the Regulator to the First-tier Tribunal) in relation to any reference to which that article applies; and

• (g) Part 2 of the Compensation Act 2006 continues to have effect for the purposes of section 161 of the Legal Services Act 2007 (extension of Part 6 to claims management services) and article 111.

Legal Services Act 2007

109

• (1) In this article a reference to a numbered section is a reference to the section so numbered in the Legal Services Act 2007.

• (2) Despite article 95(4) section 161 continues to have effect—

• (a) for the purposes of an application to the court made under section 141(2) or (3) in relation to a direction under section 137(2) contained in the determination of any complaint to which article 69 applies (complaints made before 1st April 2019); and

• (b) in relation to the application, for those purposes, of sections 141 and 142(1) and (2).

• (3) For the purposes of paragraph (2) section 142(2) is to be read as if the reference to “each relevant authorising body” were a reference to the FCA and the scheme operator (as defined in article 68).

• (4) Despite article 95(4) section 161 continues to have effect—

• (a) for the purposes of article 79(2) (information and reports) in relation to any enquiry by the court of a kind referred to in article 79(2)(b); and

• (b) in relation to the application, for those purposes, of section 149(3), (4) and (7).

• (5) Despite article 95(4) section 161 continues to have effect—

• (a) for the purposes of a decision by the ombudsman under article 74(2) (funding and charges); and

• (b) in relation to the application, for those purposes, of rules made under section 136(1).

Legal Aid, Sentencing and Punishment of Offenders Act 2012

110

• (1) This article applies for the purposes of article 55 (investigation and prosecution after 1st April 2019 in relation to conduct before that date) in relation to the continuation, taking or commencement by the FCA of any action for monitoring and enforcing the restrictions in section 56(1) and (2) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (“the 2012 Act”).

• (2) Section 57 of the 2012 Act (effect of rules against referral fees) is to be read as if subsection (4) were omitted.

• (3) Section 59 of the 2012 Act (Regulators and regulated persons)—

• (a) continues to have effect without the amendment made by article 96; and

• (b) is to be read as if the reference to the Claims Management Regulator in the first column of each of the tables in subsections (1) and (2) were a reference to the FCA.

SECTION 3 — Secondary legislation

Compensation (Claims Management Services) Regulations 2006

111

• (1) In this article a reference to a numbered regulation is a reference to the regulation so numbered in the Compensation (Claims Management Services) Regulations 2006.

• (2) Despite article 105(c) regulation 48 continues to have effect for the purposes of consideration by the FCA of whether a person is liable for a relevant default (within the meaning given in article 51(1) (penalties for conduct for which the Regulator has not given notice of proposed penalty)).

• (3) Despite article 105(c) regulation 35 continues to have effect for the purposes of the conduct by the FCA of—

• (a) an investigation by the FCA of a kind referred to in article 55(1)(a)(ii) or (iii) (investigation and prosecution after 1st April 2019 in relation to conduct before that date);

• (b) an investigation on the FCA’s behalf of a kind referred to in article 56(2) (unprofessional conduct: continuation of investigation commenced by the Regulator).

• (4) Despite article 105(c) regulations 34 and 37 to 45 (search warrants) continue to have effect for the purposes of article 60 (continuation of application made by the Regulator for a search warrant), and for those purposes—

• (a) regulations 40 to 44A are to be read as if regulation 38(2) (definitions) defined a reference to an officer of the Regulator by reference to an officer authorised by the FCA for the purposes of section 165(3) of the 2000 Act;

• (b) regulations 34(2) and (5)(c), 37(1), (2) and (5), 39 and 40(1) and (4) are to be read as if a reference to the Regulator, apart from in a reference to an officer of the Regulator, were a reference to the FCA; and

• (c) regulation 34(2) and (5)(c) is to be read as if a reference to regulation 33 were a reference to section 165 of the 2000 Act (Regulators’ power to require information: authorised persons etc).

Damages-Based Agreements Regulations 2013

112

The Damages-Based Agreements Regulations 2013 continue to have effect in relation to any damages-based agreement made before 1st April 2019 without the amendment made by article 102.

PART 7 — Review

Review

113

• (1) The Treasury must from time to time—

• (a) carry out a review of the regulatory provision contained in this Order; and

• (b) publish a report setting out the conclusions of the review.

• (2) The first report must be published before the end of the period of five years beginning with the date on which this Order comes into force for any purpose.

• (3) Subsequent reports must be published at intervals not exceeding five years.

• (4) Section 30(4) of the Small Business, Enterprise and Employment Act 2015[^f00157] (“the 2015 Act”) requires that a report setting out the conclusions of a review carried out under this Order must in particular—

• (a) set out the objectives intended to be achieved by the regulatory provision in this Order;

• (b) assess the extent to which those objectives are achieved;

• (c) assess whether those objectives remain appropriate; and

• (d) if those objectives remain appropriate, assess the extent to which they could be achieved in another way which involves less onerous regulatory provision.

• (5) In this article, “regulatory provision” has the same meaning as in sections 28 to 32 of the 2015 Act (see section 32 of that Act).

Signed

Mike Freer — Paul Maynard — Two of the Lords Commissioners of Her Majesty’s Treasury — 28th November 2018

Explanatory note

(This note is not part of the Order)

EXPLANATORY NOTE

This Order implements the transfer of regulation of claims management activity in Great Britain from the Claims Management Regulation Unit (the “CMRU”), a part of the Ministry of Justice, to the Financial Conduct Authority (the “FCA”).

The Financial Guidance and Claims Act 2018 (c. 10) (“the 2018 Act”) amends the Financial Services and Markets Act 2000 (c. 8) (“the 2000 Act”) to make claims management activity a regulated activity under the 2000 Act. Claims management services include services in relation to claims for compensation, restitution, repayment or any other remedy or relief in respect of loss or damage, or in respect of an obligation.

Under powers inserted into the 2000 Act by section 27 of the 2018 Act, the Treasury may by order prescribe when a person is or is not to be treated as carrying on a claims management activity in Great Britain, and the types of claim in respect of which claims management activity is to be regulated.

This Order sets out those claims management activities which are subject to regulation and the classes of persons who are exempt from authorisation by the FCA. The amendments made by the 2018 Act to the 2000 Act make provision for regulation of claims management activity in Scotland for the first time.

Part 1 of the Order sets out preliminary matters. It makes provision for the Order to come into force ahead of the transfer date of 1st April 2019 to enable the FCA and Financial Ombudsman Service to make rules. Additionally, it sets out when a person is to be treated as carrying on a regulated claims management activity in Great Britain.

Part 2 of the Order carries out key elements of the transfer of the existing claims management regulatory regime from the CMRU to the FCA. It amends the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I 2001/544) (“the Regulated Activities Order”) to specify the claims management activities which are to be treated as “regulated activities” which require authorisation by the FCA.

Those activities include advertising for claimants or potential claimants, advice and representation in respect of claims, and the investigation of claims. The types of claim include: personal injury claims and criminal injury compensation claims, claims relating to financial services or financial products (which include claims made pursuant to section 75 of the Consumer Credit Act 1974 (c. 39)), claims for housing disrepair, employment-related claims and claims for industrial injury disability benefits.

Members of certain professions (notably solicitors, barristers, advocates and legal executives) and certain other classes of person are exempted from regulation under the Regulated Activities Order by the FCA when undertaking claims management activity in the ordinary course of legal practice pursuant to the professional rules to which they are subject as legal practitioners. Certain persons or bodies providing regulated claims management services on a not-for-profit basis will also be exempted.

Part 2 of the Order also amends the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 (S.I 2005/1529) by specifying claims management activities which are controlled activities for the purposes of section 21 of the 2000 Act. Section 21(1) of that Act prohibits a person from communicating an invitation or inducement to engage in claims management activity unless the content of the communication is approved by an authorised person or unless an exemption applies.

Part 3 of the Order contains transitional provisions.

Part 4 of the Order contains provisions relating to rules and guidance made by the FCA.

Part 5 of the Order contains miscellaneous provisions.

Part 6 of the Order makes consequential amendments to primary and secondary legislation. It provides for the repeal of Part 2 of the Compensation Act 2006 which contains provisions relating to the regulation of claims management services under that Act. It also revokes a number of statutory instruments in consequence of the repeal of that Act and contains a number of saving provisions which are necessary to give effect to certain transitional provisions contained in Part 3 of the Order.

Part 7 of the Order requires the Treasury to review the regulatory provision contained in the Order within 5 years of the Order coming into force.

A de minimis assessment of the effect that this Order will have on the costs of business and the voluntary sector is available from Her Majesty’s Treasury, 1 Horse Guards Road, London SW10 2HQ on www.hm-treasury.gov.uk and is published alongside the Order on www.legislation.gov.uk.

Footnotes

[^f00001]: Subsections (10B) and (12A) of section 21 was inserted by section 27(3) of the Financial Guidance and Claims Act 2018 (c. 10) (“the 2018 Act”). See subsection (15) for the meaning of “specified”.

[^f00002]: Subsection (1B) of section 22 was inserted by section 27(4) of the 2018 Act c. 10. See subsection (5) for the meaning of “specified”.

[^f00003]: Sections 419A and 419B were inserted by section 27(11) of the 2018 Act.

[^f00004]: 2000 c. 8.

[^f00005]: In section 429, subsection (4)(e) was amended, and subsections (7A) and (7B) were inserted, by section 27(12) of the 2018 Act.

[^f00006]: 2013 c. 29.

[^f00007]: S.I. 2001/544.

[^f00008]: Article 4(2A) was inserted by S.I. 2013/1881.

[^f00009]: Part 3A was inserted by S.I. 2013/1881.

[^f00010]: S.I. 1998/3132.

[^f00011]: 2018 asp 10.

[^f00012]: 1974 c. 39. Section 75 was amended by S.I. 1983/1878 and 2010/1010.

[^f00013]: 1985 c. 70.

[^f00014]: 1972 c. 35.

[^f00015]: 2006 asp 1.

[^f00016]: 1990 c. 43.

[^f00017]: 1992 c. 4.

[^f00018]: 1979 c. 41.

[^f00019]: 1995 c. 53.

[^f00020]: 2013 c. 29.

[^f00021]: Section 21 was amended by the 2018 Act, section 27(4). There are other amendments, but none is relevant.

[^f00022]: S.I. 1978/1910.

[^f00023]: S.I. 2000/1119.

[^f00024]: 1990 c. 41.

[^f00025]: 2010 asp 16.

[^f00026]: 1980 c. 46.

[^f00027]: S.S.I. 2000/121.

[^f00028]: 2011 c. 25.

[^f00029]: 2005 asp 10.

[^f00030]: 1988 c. 52.

[^f00031]: 1992 c. 52.

[^f00032]: 1994 c. 30.

[^f00033]: 2018 c. 12.

[^f00034]: S.I. 2003/2426.

[^f00035]: Regulation (EU) 2016/679.

[^f00036]: S.I. 2008/1277.

[^f00037]: S.I. 2005/1529.

[^f00038]: Section 21(10B) was inserted by Financial Guidance and Claims Act 2018 (c. 10) section 27(3)(b).

[^f00039]: S.I. 1978/1910.

[^f00040]: S.I. 2000/1119.

[^f00041]: 1990 c. 41.

[^f00042]: 2010 asp 16.

[^f00043]: 1980 c. 46.

[^f00044]: S.S.I. 2000/121.

[^f00045]: 2011 c. 25.

[^f00046]: 2005 asp 10.

[^f00047]: 1988 c. 52.

[^f00048]: 1992 c. 52.

[^f00049]: 1994 c. 30.

[^f00050]: 2018 c. 12.

[^f00051]: S.I. 2003/2426.

[^f00052]: Regulation (EU) 2016/679.

[^f00053]: S.I. 2008/1277.

[^f00054]: S.I. 1998/3132.

[^f00055]: 2018 asp 10.

[^f00056]: 1974 c. 39. Section 75 was amended by S.I. 1983/1878 and 2010/1010.

[^f00057]: 1985 c. 70.

[^f00058]: 1972 c. 35.

[^f00059]: 2006 asp 1.

[^f00060]: 1990 c. 43.

[^f00061]: 1992 c. 4.

[^f00062]: 1979 c. 41.

[^f00063]: 1995 c. 53.

[^f00064]: 2013 c. 29.

[^f00065]: 2006 c. 29.

[^f00066]: 2007 c. 29.

[^f00067]: S.I. 2001/544.

[^f00068]: S.I. 2006/3322.

[^f00069]: For the purposes of Part 6 (legal complaints) of the 2007 Act (see section 161(1)(a) (extension of Part 6 to claims management services)), the Secretary of State (exercising the functions of the Regulator through the Claims Management Regulation Unit under section 5(9) of the 2006 Act), is to be treated as an approved regulator.

[^f00070]: 2007 c. 15.

[^f00071]: Section 55H was inserted by the Financial Services Act 2012 (c. 21), section 11(2).

[^f00072]: Section 55A was inserted by the Financial Services Act 2012, section 11(2).

[^f00073]: Section 55U was inserted by the Financial Services Act 2012, section 11(2).

[^f00074]: Section 55V was inserted by the Financial Services Act 2012, section 11(2).

[^f00075]: Section 55X was inserted (together with the rest of Part 4A of the 2000 Act) by the Financial Services Act 2012 (c. 21), section 11(2).

[^f00076]: Section 55Z3 was inserted by the Financial Services Act 2012, section 11(2) and amended by SI 2018/135.

[^f00077]: Section 55Y was inserted by the Financial Services Act 2012, section 11(2).

[^f00078]: Section 55Z was inserted by the Financial Services Act 2012, section 11(2).

[^f00079]: Paragraph (c) of section 207(1) was inserted by the Financial Services Act 2010 (c. 28), sections 24(1) and (2), paragraphs 1 and 18(1) and (3) of Schedule 2.

[^f00080]: Subsection (4) of section 207 was inserted by the Financial Services Act 2010, sections 24(1) and (2), paragraphs 1 and 18(1) and (3) of Schedule 2.

[^f00081]: Paragraph (c) of section 208(1) was inserted by the Financial Services Act 2010, sections 24(1) and (2), paragraphs 1 and 18((1) and (3) of Schedule 2.

[^f00082]: Subsection (4) was amended by the Financial Services Act 2012 (c. 21), section 37(1), paragraphs 1 and 15 of Schedule 9; and the Financial Services Act 2010, section 24(1) and (2), paragraphs 1 and 19 of Schedule 2.

[^f00083]: Regulation 29(4) was amended by S.I. 2015/42.

[^f00084]: The Conduct of Authorised Persons Rules 2018 (https://www.gov.uk/government/publications/claims-management-regulation-conduct-of-authorised-person-rules-2018) are made by the Regulator under regulation 22 of the 2006 Regulations (Rules and Codes of Practice).

[^f00085]: Section 165(1) was amended by the Financial Services Act 2012 (c. 21), Schedule 12, paragraph 1(2).

[^f00086]: Regulation 12(5) was amended by S.I. 2015/42.

[^f00087]: Regulation 40 was amended by S.I. 2008/1441.

[^f00088]: Regulation 42 was amended by S.I. 2008/1441.

[^f00089]: Regulation 51 was amended by S.I. 2008/1441.

[^f00090]: Regulation 50 was amended by S.I. 2014/3239.

[^f00091]: Regulation 52 was amended by S.I. 2014/3239.

[^f00092]: Section 207(1) was amended by the Financial Services Act 2012 (c. 21), section 37(1), paragraphs 1 and 14 of Schedule 9.

[^f00093]: Regulation 51 was amended by S.I. 2013/3239.

[^f00094]: Section 208(4) was amended by the Financial Services Act 2012 (c. 21), section 37(1) and paragraphs 1 and 15 of Schedule 9 and the Financial Services Act 2010 (c. 28), section 24(1) and (2), and paragraphs 1 and 19(1) and (4).

[^f00095]: Section 167 was amended by the Financial Services Act 2012 (c. 21), section 41.

[^f00096]: Section 168 was amended by the Counter Terrorism Act 2008 (c. 28), section 100(2), the Financial Services Act 2010 (c. 28), section 26(1)(g)(i), the Financial Services Act 2012, section 41, the Financial Guidance and Claims Act 2018 (c. 10), section 25, S.I. 2007/126, 2012/2554 and 2013/1773. There are other amendments, but none are relevant.

[^f00097]: Section 175 was amended by the Financial Services Act 2012 (c. 21), section 41.

[^f00098]: Section 8(1) was amended by the Legal Services Act 2007 (c. 29) and the Crime and Courts Act 2013 (c. 22).

[^f00099]: Section 176A was inserted by the Financial Services Act 2012 (c. 21), section 41 and paragraph 15 of Schedule 12.

[^f00100]: Section 55L was inserted by the Financial Services Act 2012 (c. 21), section 11(2).

[^f00101]: Section 133 was substituted by S.I. 2010/22 and amended by the Financial Services Act 2012 (c. 21), section 23, the Financial Services (Banking Reform) Act 2013 (c. 33), section 4(2), the Crime and Courts Act 2013 (c. 22), section 17(5) and S.I. 2013/1388, 2014/3329, 2016/680 and 2017/1064.

[^f00102]: For the meaning of “compulsory jurisdiction” see the 2000 Act, section 226(8).

[^f00103]: Section 115 of the 2007 Act provides that the scheme is to be operated under a name (which must include the word “ombudsman”) chosen by the Office for Legal Complaints. The chosen name is “The Legal Ombudsman Scheme”. Section 161 of the 2007 Act extends Part 6 of the 2007 Act to claims management services, and is repealed by this Order subject to saving provisions.

[^f00104]: For the meaning of “scheme operator” see the 2000 Act, section 225(2).

[^f00105]: Paragraph 13 of Schedule 17 was amended by the Financial Services Act 2012 (c. 21), section 39 and by S.I. 2009/209, 2011/99, 2015/542, and 2017/752.

[^f00106]: S.I. 2015/542.

[^f00107]: Section 228 was amended by the Financial Services Act 2012 (c. 21), section 39 and S.I. 2013/1881.

[^f00108]: Section 230A was inserted by the Financial Services Act 2012, section 39.

[^f00109]: Paragraph 16 of Schedule 17 was amended by the Crime and Courts Act 2013 (c. 22), section 17(5) and the Tribunals, Courts and Enforcement Act 2007 (c. 15), section 62(3).

[^f00110]: The OLC is the Office for Legal Complaints established by section 114 of the Legal Services Act 2007 (c. 29).

[^f00111]: Section 174A was inserted by the Financial Services (Banking Reform) Act 2013 (c. 33), section 140(4) and (5) and is repealed by this Order.

[^f00112]: Paragraph 10(1) of Schedule 17 was amended by the Consumer Credit Act 2006 (c. 14), section 61(10)(d) and S.I. 2013/1881.

[^f00113]: Paragraph 11 of Schedule 17 was amended by the Consumer Credit Act 2006, section 61(10)(d) and by S.I. 2013/1881.

[^f00114]: Section 13 was amended by the Financial Services (Banking Reform) Act 2013 (c. 33) and by S.I. 2010/22.

[^f00115]: S.I. 2008/2698.

[^f00116]: Section 327(9) of the Financial Services and Markets Act 2000 (c. 8) is inserted by article 91(5) of this Order.

[^f00117]: Section 55J was inserted by the Financial Services Act 2012 (c. 21), section 11(2) and amended by S.I. 2013/1773 and 3115, 2015/575, 1882 and 910, 2016/225 and 680, and 2018/135.

[^f00118]: S.I. 2009/774.

[^f00119]: 2006 c. 29.

[^f00120]: 2018 c. 10.

[^f00121]: 2018 c. 10.

[^f00122]: 2012 c. 21.

[^f00123]: S.I. 2001/544.

[^f00124]: Section 1G was inserted by the Financial Services Act 2012, section 6.

[^f00125]: Section 404E was substituted by the by the Financial Services Act 2010 (c. 28).

[^f00126]: Section 425A was inserted by the Financial Services Act 2010, section 24(1).

[^f00127]: 1990 c. 41. Section 58AA was inserted by the Coroners and Justice Act 2009 (c. 25), section 154.

[^f00128]: Section 419A was inserted by the Financial Guidance and Claims Act 2018 (c.10), section 27(11).

[^f00129]: 2002 c. 40.

[^f00130]: Those words were inserted in Schedule 14 and in Schedule 15 by S.I. 2007/2977.

[^f00131]: 2007 c. 15.

[^f00132]: 2007 c. 29.

[^f00133]: Section 174A was inserted by the Financial Services (Banking Reform) Act 2013 (c. 33), section 140(4) and (5).

[^f00134]: Paragraph (oa) of section 206(4) was inserted by the Financial Services (Banking Reform) Act 2013, section 140(4) and (6).

[^f00135]: 2012 c. 10.

[^f00136]: 2013 c. 22.

[^f00137]: 2013 c. 33.