Clause 3
Compensation Bill [Lords]
2:45 pm
Bridget Prentice (Parliamentary Under-Secretary, Department for Constitutional Affairs; Lewisham East, Labour)
I want to come to the issue of marketing companies. Companies will not be able to evade regulation by setting themselves up as marketing companies. Authorised companies will be required to declare to the regulator any links that they have with parent or subsidiary companies and any previous companies that the directors have worked for.
My hon. Friend the Member for Bassetlaw raised the issue of a company putting itself into voluntary liquidation in order to avoid anything. Effective enforcement is essential to prevent any company evading regulation. There will be compliance checks and audits that can flush out any early concerns about a business that might be failing. The regulator does not have to wait for an audit to take place but can take action to suspend or cancel authorisation if he feels it is appropriate to do so.
In dealing with complaints, it should also be said that authorised persons will have to set up an internal complaints procedure. Where the consumer feels that their complaint has not been handled appropriately or to their satisfaction under the internal procedure, they can refer the matter directly to the regulator. Again, if the investigation of that complaint uncovers a breach of the rules, that could result in disciplinary action, including suspension or cancellation of authorisation.
My hon. Friend also talked about the collusion between solicitors and claims handlers. There is nothing to stop solicitors and claims handlers from working together, but if they are providing regulated claims management services, solicitors will be regulated by the Law Society and the claims handlers by the regulator. We will ensure that all regulators work in a joined-up fashion so that they address all the abuses, if there are any, and safeguard consumer rights. The provision is an interim measure because, as the hon. Member for North Southwark and Bermondsey has mentioned, once the Legal Services Bill becomes law that regulation will come under the auspices of the legal services board.