Derek Bradley, PanaceaIFA & Alan Lakey, Highclere Financial Services
The financial services industry is going through one of the most radical overhauls in recent history. However, as this happens the legal foundations of the industry are becoming more and more shaky. It was for this reason that on 20th June 2012, Derek Bradley, CEO of PanaceaIFA and Alan Lakey, Partner of Highclere Financial Services, met with senior officials from the Ministry of Justice’s claims management regulation unit to discuss the problem of CMCs issuing spurious complaints, which have become more prevalent in the wake of the payment protection insurance mis-selling scandal. Their findings:
•The MoJ has shut down 734 CMCs (in the year to the end of March)
•The MoJ has doubled the amount of staff to deal with this issue
•An estimated 75% of complaints to the Financial Services Compensation Scheme come from CMCs and 50 per cent of claims to the Financial Ombudsman Service are from CMCs.
Bradley and Lakey have therefore proposed a solution to the MoJ: remove CMC-managed claims from FOS jurisdiction and place them firmly within the court system. This will treat CMC complaints in the same way as a case that has gone to litigation – outside of FOS jurisdiction.
Do you agree? Join the debate as Derek and Alan discuss the outcome of the meeting and future plans to get a better system in place.