On Monday 8th April, the Ministry of Justice (MoJ) announced that laims management companies (CMC’s) will have to agree contracts in writing with their clients before taking fees.

In its response to a consultation on tougher regulations for the industry, The MoJ’s claims management regulator published new conduct rules, which will come into force this summer.

It will insist CMC’s can no longer refer to their status as being regulated by the MoJ, which had been construed by some consumers as government endorsement. In addition to this, they will also have to inform clients if they are suspended or have restrictions imposed within 14 days of the enforcement action being taken.

This ‘industry-wide crackdown’ will include enforcing new powers to prevent customers being offered a cash incentive to sign up to a CMC.

These rules have been put in place to root out poor practice and ensure that the consumers are better protected by making contract terms clearer so that they know exactly what the deal is before they part with any money. It is thought that the new rules will help to improve the reputation for the vast majority of CMC’s that do follow the rules and drive out malpractice.