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Compensation Act 2006

Volume 690: debated on Tuesday 27 March 2007

My honourable friend the Parliamentary Under-Secretary of State (Bridget Prentice) has made the following Written Ministerial Statement.

The Compensation Act 2006 received Royal Assent on 25 July 2006. Part 2 of the Act provides the statutory framework for the regulation of claims management services.

In line with the Government's commitment to bring the Act into force as soon as possible, a third commencement order has been made. This brings into force the prohibition and offences sections.

From 23 April 2007 a person providing claims management services without the requisite authorisation (or if exempted or subject to a waiver) will be committing an offence and liable to prosecution and if convicted to a maximum of up to two years’ imprisonment. Those providing claims management services will be required to give consumers clear advice about the validity of their claim, options for funding the costs and provide a complaints mechanism if things go wrong.

This order follows the Compensation Act 2006 (Commencement No. 1) (SI 2006/3005 (C.107)) that came into force on 1 December 2006 allowing regulation to commence. The Compensation Act 2006 (Commencement No. 2) (SI 2007/94 (C.5)) came into force on 23 January 2007 formally establishing the Claims Management Services Tribunal.