1This chapter applies to a firm in relation to regulated claims management activities other than seeking out, referrals and identification of claims or potential claims.

1A firm must provide summary information (see CMCOB 4.2.2R) to a customer in accordance with this section before entering into an agreement with the customer that relates to regulated claims management activity.

1. (1)

   1The firm must provide the summary information:

   1. (a)

      in a single page document, which contains only the summary information;

   2. (b)

      in a durable medium; and

   3. (c)

      in plain and intelligible language.

2. (2)

   The summary information is:

   1. (a)

      a brief description of the services that the firm will provide under the agreement (see CMCOB 4.2.8R);

   2. (b)

      a brief description of the steps that the customer will need to take in respect of the claim;

   3. (c)

      a brief description of how the firm will keep the customer updated on the progress of the claim;

   4. (d)

      a fee illustration or estimate, and explanation (see CMCOB 4.2.5R);

   5. (e)

      a brief description of the customer’s right to cancel the agreement (see CMCOB 2.1.12R(2)(a)); and

   6. (f)

      a brief description of:

      1. (i)

         the customer’s right to terminate the agreement; and

      2. (ii)

         any fees that may be payable by the customer to the firm if the customer terminates the agreement (see CMCOB 2.1.12R(2)(b) and CMCOB 2.1.12R(4));

   7. (g)

      if the claim is of a sort which may be made by the customer to a statutory ombudsman or a statutory compensation scheme, without using the services of the firm and without incurring a fee, a statement to the effect that:

      1. (i)

         the customer is not required to use the services of a firm which carries on regulated claims management activity to pursue their claim; and

      2. (ii)

         it is possible for the customer to present the claim themselves for free, either to the person against whom they wish to complain or to the statutory ombudsman or the statutory compensation scheme; and

   8. (h)

      if the firm is aware that the person against whom the claim is to be made is a member of, or subject to, an alternative dispute resolution scheme (other than an ombudsman or a scheme of a sort mentioned in (g)), a statement to the effect that it is possible for the customer to present the claim themselves to that alternative dispute resolution scheme.

1. (1)

   1The firm must explain the basis on which it would calculate its fee, and provide an illustration or estimate of that fee.

2. (2)

   [deleted]2

3. (2A)

   Where the amount of the fee, or any part of it, would be determined by reference to the amount recovered for the customer, the firm must provide its fee illustration or estimate showing the level of fee by reference to each of the five redress bands in the table in CMCOB 5.2.9R (irrespective of whether the claim is a financial services or financial product claim).2

4. (3)

   For the purposes of (2A)2, the “amount recovered for the customer” means the amount paid or payable by the person against or about whom the claim would be made, ignoring any set-off or netting against any sum owed or payable by the customer to that person.

5. (4)

   Where the firm’s fee is not ascertainable as in (2A),2 but is instead dependent on factors which cannot be known in advance (for example, where the firm charges an hourly rate), the firm must explain its fee structure, and2 provide an estimate calculated by reference to:

   1. (a)

      the facts2 and circumstances of the claim, to the extent that the firm has knowledge of them; and

   2. (b)

      (if the firm charges on an hourly basis)2 the typical number of hours the firm would expect to spend on a claim of that type.

6. (5)

   The illustration or estimate must be accompanied:

   1. (a)

      where the amount of the fee, or any part of it, would be determined by reference to the amount recovered for the customer, by2 a statement that the fee illustration is not to be taken as an estimate of the amount likely to be recovered for the customer;

   2. (b)

      where that is not the case, by2 an explanation of how the estimate has been calculated; and

   3. (c)

      by2 a statement to the effect that the fee that the customer will have to pay may be more than or less than the illustration or estimate.

7. (6)

   Where the fee is a fixed amount, the firm may indicate that the fee is a fixed amount and not an estimate.

8. (7)

   2Where the fee is provided for in or imposed under an FS claims management agreement and there is a possibility that services which fall outside the scope of the FS claims management fee cap will be provided under the agreement or under a connected agreement (as defined in CMCOB 5.2.19R(2)), the firm must provide the customer with a clear and prominent:

   1. (a)

      explanation that those services will not be covered by the FS claims management fee cap;

   2. (b)

      explanation that the overall fees may exceed the cap; and

   3. (c)

      estimate of the likely fees for those services.

1. (1)

   1Before entering into an agreement with the customer that relates to regulated claims management activity, the firm must give the customer objective information, in a durable medium, to assist the customer to reach a decision as to whether to pursue the claim.

2. (2)

   The information given under (1) must include information on:

   1. (a)

      the risks and costs involved in making the claim, in particular (where relevant) the possibility of not recovering any money but becoming liable for costs; and

   2. (b)

      the possibility, in the case of legal action, of attending Court and giving evidence.

[Note:CAPR CSR 11a]

1Before entering into an agreement with the customer that relates to regulated claims management activity, the firm must also give the customer information, in a durable medium, on:

1. (1)

   the services that will be provided under the agreement, including but not limited to:

   1. (a)

      the actions the firm will take to ascertain the basis and merits of the claim, including (where relevant):

      1. (i)

         the nature of inquiries that the firm will make of the person about whom the claim is to be made and of third parties; and

      2. (ii)

         the procurement of legal, specialist or expert advice;

   2. (b)

      the nature of any advice to be provided by the firm including:

      1. (i)

         advice on the merits of the claim; and

      2. (ii)

         advice on any particular steps that the customer may need to take;

   3. (c)

      the actions the firm will take to present and pursue the claim;

   4. (d)

      the actions the firm will take and the advice it will give when the claim is completed (that is, when it is either rejected or successful, whether in whole or in part);

2. (2)

   the person who will provide those services;

3. (3)

   the terms under which and the conditions on which those services will be provided;

4. (4)

   any charge the firm makes;

5. (5)

   whether the firm’s fees are:

   1. (a)

      calculated on the gross or net amount of the customer’s damages, compensation or monies in settlement of a claim; and

   2. (b)

      a clear explanation of how this will affect the damages, compensation or settlement monies that the customer will actually receive;

6. (6)

   any referral fee paid by the firm to, or other financial arrangement with, any other person in respect of the introduction of the customer to the firm;

7. (7)

   any steps that the customer is likely to have to take in respect of the claim;

8. (8)

   any costs that the customer may have to pay, in relation to repayments of a loan taken out for the purchase of a legal expenses insurance policy, or any similar purpose, and whether the customer may be liable to pay any shortfall in recoverable costs or premiums from the person against whom the claim is to be made;

9. (9)

   the documentation likely to be needed to pursue the claim;

10. (10)

    any relationship between the firm and any solicitor or panel of solicitors to whom the firm might refer the customer or from whom the firm might commission services in relation to the customer;

11. (11)

    the procedures to follow if the customer wishes to make a complaint about the firm;

12. (12)

    how the customer may cancel or terminate the contract and what the consequences of cancellation and termination are, including the reimbursement of any costs paid during the cancellation period and any charges for work completed after that cancellation period (see CMCOB 2.1.12R);

13. (13)

    the nature and frequency of updates that the firm will give the customer on the progress of the claim;

14. (14)

    the Financial Ombudsman Scheme or any other Ombudsman scheme to which the firm is subject; and3

15. (15)

    3any relevant statutory compensation scheme to which the firm is subject.

[Note: in part, CAPR CSR 11(b)–(k)]

1In addition to the matters in CMCOB 4.2.7R and 4.2.8R, the firm must also inform the customer, in a durable medium, that:

1. (1)

   if the customer has outstanding liabilities with the person against whom the claim is to be made:

   1. (a)

      any damages, compensation or settlement monies might, in certain circumstances, be off-set against those outstanding liabilities; and

   2. (b)

      the customer will, where necessary, need to pay the firm’s fees from their own funds.

2. (2)

   in the case of pension related claims:

   1. (a)

      it is possible that the firm’s fee may become payable before the customer has access to their pension; and

   2. (b)

      the customer will, where necessary need to pay the firm’s fees from their own funds.

3. (3)

   if the customer is subject to or proposing any of the processes or arrangements listed at CMCOB 4.3.1R(6)(a) to (f) that:

   1. (a)

      any damages, compensation or settlement monies might, in certain circumstances, be off-set against the customer’s outstanding debts; and

   2. (b)

      the customer will, where necessary need to pay the firm’s fees from funds which are not subject to the processes or arrangements listed at CMCOB 4.3.1R(6)(a) to (f).

1When a firm gives information to a customer as required by CMCOB 4.2.1R, CMCOB 4.2.7R, CMCOB 4.2.8R and CMCOB 4.2.9R, the firm must accompany the information with:

1. (1)

   the name, postal address and other contact details of the firm; and

2. (2)

   the reference number under which the firm appears in the Financial Services Register.

[Note: in part, CAPR CSR 11(l)]

1Before entering into an agreement with the customer that relates to regulated claims management activity, the firm must:

1. (1)

   take reasonable steps to:

   1. (a)

      ascertain whether the customer has other methods for pursuing the claim, and if so:

      1. (i)

         ensure that the customer understands that those methods are available to them;

      2. (ii)

         seek confirmation in writing from the customer that the customer does not wish to use those methods, and the customer’s reasons for not wishing to do so;

      3. (iii)

         record the customer’s confirmation and reasons; and

   2. (b)

      draw the customer’s attention to the information provided under CMCOB 4.2.2R(2)(g) and (h), if that information is relevant to the claim;

   [Note: in part, CAPR CSR 10]

2. (1A)

   2where the information provided under CMCOB 4.2.2R(2)(g) or (h) is relevant to the claim, obtain a “standalone” signed statement in a durable medium from the customer, dealing only with this issue, confirming that the customer:

   1. (a)

      is aware of the matters in CMCOB 4.2.2R(2)(g) or (h) (or both (g) and (h) where both are relevant); and

   2. (b)

      wishes to use the services of the firm to make the claim.

3. (2)

   make it clear to the customer that the customer may seek further advice or look for another person to assist the customer with the claim, subject to any time limits within which a claim must be made; and

   [Note:CAPR CSR 13]

4. (3)

   take reasonable steps to ensure that the customer understands the agreement;

   [Note: in part, CAPR CSR 14

5. (4)

   ask the customer whether they have outstanding liabilities with the person against whom the claim is to be made and explain that if they do:

   1. (a)

      that any damages, compensation or settlement monies might, in certain circumstances, be off-set against those outstanding liabilities; and

   2. (b)

      the customer will, where necessary, need to pay the firm’s fees from their own funds;

6. (5)

   in the case of pension related claims explain:

   1. (a)

      that the firm’s fee may become payable before the customer has access to their pension; and

   2. (b)

      that the customer will, where necessary, need to pay the firm’s fees from their own funds;

7. (6)

   ask the customer if they, whether in Great Britain or in another jurisdiction:

   1. (a)

      have ever3 been declared bankrupt;

   2. (b)

      are subject to a bankruptcy petition;

   3. (c)

      are subject to, or have ever been subject to,3 an individual voluntary arrangement;

   4. (d)

      have proposed an individual voluntary arrangement which is yet to be approved or rejected by creditors;

   5. (e)

      are currently3 subject to, or have ever been subject to,3 a debt relief order; or

   6. (f)

      are or3 have ever been subject to any other3 process or arrangement which is similar3 to those listed in (a) to (e) including but not limited to sequestration; and

   if so, explain that any damages, compensation or settlement monies might, in certain circumstances be off-set against the customer’s outstanding debts; and that the customer will, where necessary, need to pay the firm’s fees from funds that are not subject to the processes or arrangements listed above at (a) to (f).

8. (7)

   record the customer’s response to questions (4) and (6) and where the customer does not know the answer, advise them to check.