Insurers meet to tackle CMCs in Scotland

Insurers, DWF, the Association of British Insurers (ABI) and the Ministry of Justice (MoJ) met recently to discuss what can be done to disrupt the activities of claims management companies (CMCs) in Scotland.

Law firm DWF hosted the forum in its Glasgow office. It aimed to find solutions to the problem of the “more dubious” CMCs moving to Scotland to escape the more restrictive regulatory and business environment in England, according to a release.

Representatives of key industry insurers, including RSA, Aviva, Allianz, AXA, DLG and Markerstudy, attended the event. Speakers included Kevin Rousell, head of the Claims Management Unit at the MoJ, as well as Alastair Ross, assistant director and head of public policy (Scotland/Wales/Northern Ireland) at the ABI, and Jill Sinclair, head of counter fraud in Scotland at DWF.

“The regulation of claims management companies in Scotland is essential to ensure that consumers here enjoy the same level of protection from nuisance calls and other invasive claims farming tactics from unscrupulous firms,” Ross said following the forum.

He said: “The ABI is pleased to be working with DWF and the Ministry of Justice to raise the level of awareness of the new regulatory regime for CMCs in Scotland.”

Rousell added: “Scotland is approaching a key moment in the further development of access to justice and regulation of claims services. I was delighted to have the opportunity to discuss the experience and challenges of regulating CMCs in England and Wales over the last 10 years, the current regulatory priorities and identify read across to the Scottish context.”

“The experience has shown the crucial role collaboration between regulators and key stakeholders in the claims system has to play in helping to ensure that bad claims management practices are tackled, redress mechanisms work efficiently and effectively and consumers receive good service.”

DWF has long campaigned jointly with the ABI for the regulation of CMCs in Scotland and have met with numerous stakeholders in politics and the civil service to argue a case for reform.

In September 2017, Andrew Lothian, head of general insurance in Scotland at DWF, gave evidence to the Justice Committee of the Scottish Parliament on behalf of the Forum of Insurance Lawyers on the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill, and argued for CMC regulation in Scotland.

Lothian said: “The Scottish claims environment will be transformed later this year with the advent of DBAs and QOCS [damages-based agreements and qualified one-way costs shifting].”

“With the Scottish government now agreeing that claims management companies should be regulated, this was the ideal time to hear direct from Kevin Rousell about how CMC regulation has operated south of the border. The key message is for insurers to act now to disrupt the activities of CMCs in Scotland and take the opportunity to help shape the new claims landscape.”

Mark Dugdale