The Compensation (Claims Management Services) Regulations 2006

Decisions about authorisations

10.—(1) The Regulator must not grant an application for authorisation unless he is satisfied that the applicant is competent and suitable to provide the regulated claims management service to which the application relates.

(2) For the purposes of making a decision regarding the suitability of an applicant, the criteria are the following—

(a)that the applicant does not have a history of committing relevant criminal offences (in particular, perjury or an offence involving fraud, theft or false accounting, or in relation to financial services, consumer credit or consumer protection) or breaches of any law or rule of practice regulating the provision of financial, legal or other relevant services;

(b)there are no relevant proceedings (whether completed or not) in any court or tribunal, and in particular any proceedings in relation to financial services, consumer credit or consumer protection, against the applicant;

(c)if the applicant holds or proposes to hold clients’ money, the applicant has appropriate arrangements or proposed arrangements for holding such money; and

(d)that the applicant has no arrangements with another person that might expose it to any conflict of interest.

(3) For the purposes of making a decision regarding the suitability of an applicant, the Regulator may have regard to—

(a)the applicant’s financial circumstances;

(b)the applicant’s management arrangements, including—

(i)how financial and other control is exercised or is to be exercised;

(ii)who is responsible for the applicant’s financial and other management;

(iii)measures to maintain its solvency;

(iv)the provision of verified, certified or audited accounts;

(v)any previous relationship with a company that has become insolvent, or against which an insolvency petition has been brought;

(c)the applicant’s actual or proposed connections or arrangements with other persons, (including, in the case of an applicant that is a body corporate, its relationship with any parent or subsidiary company) and the applicant’s arrangements to avoid conflicts of interest;

(d)the applicant’s policies and arrangements or proposed arrangements for training, and monitoring the competence of, its staff, and for recruiting staff;

(e)the applicant’s practice or proposed practice in relation to providing information to clients about fees;

(f)the applicant’s arrangements or proposed arrangements for professional indemnity insurance.

(4) In the case of an applicant other than an individual, it is a criterion for the grant of an application for authorisation that—

(a)in the case of an applicant that is a body corporate, each of the applicant’s directors;

(b)in the case of an applicant that is a partnership or other body of persons, each of its members; and

(c)each other person who appears to the Regulator to be able to exert significant influence on the applicant’s policy or management;

is suitable to be associated with the provision of regulated claims management services of the kind to which the application relates.

(5) For the purpose of making a decision regarding the suitability of an individual to be associated with the provision of regulated claims management services, being an individual who is a director or partner of an applicant, or is otherwise able to exert significant influence on the applicant’s policy or management, the Regulator may have regard to—

(a)the individual’s criminal record (if any), and in particular any conviction for perjury, or an offence involving fraud, theft or false accounting, or in relation to financial services, consumer credit or consumer protection;

(b)whether the individual has ever been disqualified as a company director;

(c)any relevant proceedings (whether completed or not) of a body exercising functions in relation to a trade or profession, and in particular any proceedings that may result in the withdrawal or revocation of the right to practise a profession, engage in a business or provide a service;

(d)any withdrawal or revocation of his right to practise a profession, engage in a business or provide a service;

(e)his financial circumstances;

(f)his qualifications and experience.