Claims Management Companies: The route to SRA regulation
Updated: Jul 16, 2021
What’s changed for Claims Management Companies?
It’s been over two years since the Financial Conduct Authority stepped in and became the regulator for claims management companies (CMCs). In this time, the FCA has introduced a number of new regulations and restrictions, in a bid to improve the operation of CMCs. However, one of these changes saw the FCA put a deadline on PPI claims, which meant that from the 29th August 2019, people could no longer claim against companies that had wrongly sold them PPI. For CMCs, this marked the beginning of a challenging couple of years, as PPI claims had once been one of their main sources of business.
What challenges have Claims Management Companies faced?
Luckily for claims management companies, the deadline imposed by the FCA didn’t include all forms of PPI and there was a new type of claim on the rise. Known as Plevin PPI, this was a type of consumer litigation claim which fell under a separate category of law, namely the Consumer Credit Act 1974. Initially, this new form of PPI might seem like the perfect opportunity for CMCs to continue helping clients. However, consumer litigation claims form a new set of hurdles for CMCs to overcome.
Due to the complex nature of consumer litigation cases, the involvement of a solicitor is often required. So, whilst CMCs have the knowledge to handle these cases, they aren’t regulated to do so. This means that, for any consumer litigation claim that a CMC receives, they need to pass the case onto a solicitor. Acting as the middle man between client and solicitor, CMCs often lose control over the direction and outcome of consumer litigation cases, and the situation would be the same for any Plevin PPI claim they take on.
What’s next for Claims Management Companies?
In order for a claims management company to handle consumer litigation claims, they need to be approved by the SRA. This approval enables CMCs to offer legal advice and see their clients’ consumer litigation cases through to the end. However, the SRA authorisation process is filled with applications and policies that can be gruelling to complete.
That’s why the Bamboo Platform is the ideal solution for CMCs.
The Bamboo Platform can provide you with access to an SRA regulated platform, so that you can offer legal advice to your clients, whilst being compliant with the relevant regulations. As Bamboo is such a flexible platform, it can be adapted to fit the structure of your CMC business, which means you won’t have to change the systems you use or the way you operate. However, if you did require support, the Bamboo Platform has a team of legal experts who are available to help with all of the back-office processes required to operate a legal practice. From handling SRA audits to training your team, Bamboo covers all the essentials to get your CMC up and running as a regulated legal practice.
If you’re a claims management company that’s interested in covering consumer litigation claims, including Plevin PPI cases, get in touch with Bamboo. We can help you obtain the regulations you need to support your clients throughout the entire claims process.