Thursday, 6 November 2014

Legal Ombudsman to hear CMC complaints

The MoJ has considered responses to its May 2014 consultation document “The Legal Ombudsman and complaints about claims management companies”.

From 28th January 2015 the Legal Ombudsman will offer consumers a free route of redress if they have a complaint about a regulated claims management company (CMC). The fee structure has been designed to make the scheme wholly self –financing and is based on the turnover figure of the CMCs.  Annual charges are shown below however pro-rata charges will apply for the initial period until 1 April. 

Where the annual turnover of an authorised CMC is £163,636 or less, then the amount payable will be a fixed fee of: Turnover band £
Annual Fee
Up to £24,999.99
From £75 - £250
£25,000 – £74,999.99
£75,000 – £163,636

Where the annual turnover of an authorised CMC exceeds £163,636 businesses shall pay an amount equal to 0.33% of annual turnover up to £1 million, plus 0.22% of annual turnover between
£1 million and £5 million, plus 0.18% of annual turnover above £5 million.
Fees are capped at £40,000.

The MoJ estimates that the Legal Ombudsman scheme will consider 3,000 complaints from consumers a year. The Claims Standards regulator will continue to deal with complaints about unregulated businesses and to investigate misconduct.

Lesley Attu

Product Development Manager

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