ACSO comments on FCA Fee Capping for Claims Management Companies

13 June 2019

FCA Fee Capping for Claims Management Companies

Comment from ACSO


Commenting on the FCA’s forthcoming study of fee-capping (i) for claims management companies, Matthew Maxwell Scott, Executive Director of ACSO (the Association of Consumer Support Organisations), said: 


“It is vital this FCA initiative has at its heart a focus of providing consumers with the clarity and certainty they need to make informed decisions before they enter into a contract with a claims management company. All reputable CMCs will support this aim and co-operate with the FCA to achieve it.

“The personal injury sector is served by both FCA and SRA regulated entities and there is a need for a consistent regulatory landscape to avoid consumer confusion. Many CMCs, especially those operating in the personal injury sector, refer work to regulated law firms. This will continue after the implementation of the Civil Liability Act measures, so we urge the FCA and SRA to work together to create common standards.

“Fee capping can be appropriate for simple disputes, such as PPI claims, where the process is straightforward. Personal injury and other legal cases involving detailed processes and often complex legal issues do not fit so easily within a capped environment. We therefore recommend that the regulators assess how the market adapts to regulatory change before considering fee caps. While intended to protect consumers, an ill-considered cap could lead to businesses refusing to represent customers, creating a clear consumer detriment. Regulators must ensure that any new regime protects access to justice for consumers as well as preventing exploitation and poor practice.”

Background to the study 

The Financial Guidance and Claims Act 2018 (the Act) gave the FCA a duty to make rules restricting charges for claims management activities in relation to financial services and financial products claims. The Act also gave the FCA powers to make rules restricting charges for claims in the other claims sectors we regulate (personal injury, specified benefits, criminal injury, housing disrepair and employment matters).  

FCA plan

The work will explore whether it is necessary to introduce fee caps and, if so, how it should do this. To inform this work the FCA will send an information request to a representative sample of CMCs.

The FCA has worked with a small, representative sample of CMCs to ensure that the information request is proportionate and effective. It is also going to be talking to CMC customers to help it gain a better understand of their experience of using CMCs. 


Once the analysis is complete, using the data CMCs provide, it may decide to publish a Consultation Paper. If it does this, this will be an opportunity for CMCs, industry groups and other stakeholders to give their views on the FCA’s plans.