LeO to handle claims management complaints from next year

The Ministry of Justice has announced that the legal ombudsman will be given the job of handling thousands of complaints about claims management companies at some point next year.

Adam Sampson, chief legal ombudsman, condemned the delays surrounding the move last month as "bureaucratic nonsense". Ministers originally told LeO the transfer would happen this year.

Sampson said this morning: "This announcement is great news for consumers who will soon have access to redress where they have experienced poor service from claims management companies.

"It is also good news for claims management since it will boost confidence in the services provided by the sector. The legal ombudsman will be ready to start accepting complaints as soon as legislation allows."

A spokesman for the MoJ said the transfer would be implemented through amendments to the Financial Services (Banking Reform) Bill, which had its third reading in the House of Lords last week. It is expected to receive Royal Assent by early next year.

The spokesman said the change 'later in 2014' would enable the Claims Management Regulation Unit at the Ministry of JusticeMoJ to dedicate more resources to tackling bad practice by CMCs.

He said the unit would be given new powers to fine companies which that use information gathered by unsolicited calls and texts or which that provide poor quality services.

"The fines will be used alongside new tougher rules for claims management firms, which include requiring firms to carry out thorough audits of how data they use has been gathered, so they can no longer turn a blind eye to whether leads have been found by illegal marketing texts and calls.

"They will also have a duty to make sure the claims they are submitting have a realistic chance of success, as well as ensuring full evidence is provided to back up any allegations."

Justice minister Shailesh Vara added: "Consumers should be in no doubt that the bad companies out there are being dealt with. We have already ended the licencses of more than 1,000 companies and tough new powers are now being brought in across the board.

"This latest change will make sure people who get a bad service can get redress."

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