Compensation Act 2006

Part 1 U.K. Standard of care

1 Deterrent effect of potential liability E+W

A court considering a claim in negligence or breach of statutory duty may, in determining whether the defendant should have taken particular steps to meet a standard of care (whether by taking precautions against a risk or otherwise), have regard to whether a requirement to take those steps might—

(a) prevent a desirable activity from being undertaken at all, to a particular extent or in a particular way, or

(b) discourage persons from undertaking functions in connection with a desirable activity.

2 Apologies, offers of treatment or other redress E+W

An apology, an offer of treatment or other redress, shall not of itself amount to an admission of negligence or breach of statutory duty.

3 Mesothelioma: damages U.K.

(1) This section applies where—

(a) a person (“the responsible person”) has negligently or in breach of statutory duty caused or permitted another person (“the victim”) to be exposed to asbestos,

(b) the victim has contracted mesothelioma as a result of exposure to asbestos,

(c) because of the nature of mesothelioma and the state of medical science, it is not possible to determine with certainty whether it was the exposure mentioned in paragraph (a) or another exposure which caused the victim to become ill, and

(d) the responsible person is liable in tort, by virtue of the exposure mentioned in paragraph (a), in connection with damage caused to the victim by the disease (whether by reason of having materially increased a risk or for any other reason).

(2) The responsible person shall be liable—

(a) in respect of the whole of the damage caused to the victim by the disease (irrespective of whether the victim was also exposed to asbestos—

(i) other than by the responsible person, whether or not in circumstances in which another person has liability in tort, or

(ii) by the responsible person in circumstances in which he has no liability in tort), and

(b) jointly and severally with any other responsible person.

(3) Subsection (2) does not prevent—

(a) one responsible person from claiming a contribution from another, or

(b) a finding of contributory negligence.

(4) In determining the extent of contributions of different responsible persons in accordance with subsection (3)(a), a court shall have regard to the relative lengths of the periods of exposure for which each was responsible; but this subsection shall not apply—

(a) if or to the extent that responsible persons agree to apportion responsibility amongst themselves on some other basis, or

(b) if or to the extent that the court thinks that another basis for determining contributions is more appropriate in the circumstances of a particular case.

(5) In subsection (1) the reference to causing or permitting a person to be exposed to asbestos includes a reference to failing to protect a person from exposure to asbestos.

(6) In the application of this section to Scotland—

(a) a reference to tort shall be taken as a reference to delict, and

(b) a reference to a court shall be taken to include a reference to a jury.

(7) The Treasury may make regulations about the provision of compensation to a responsible person where—

(a) he claims, or would claim, a contribution from another responsible person in accordance with subsection (3)(a), but

(b) he is unable or likely to be unable to obtain the contribution, because an insurer of the other responsible person is unable or likely to be unable to satisfy the claim for a contribution.

(8) The regulations may, in particular—

(a) replicate or apply (with or without modification) a provision of the Financial Services Compensation Scheme;

(b) replicate or apply (with or without modification) a transitional compensation provision;

(c) provide for a specified person to assess and pay compensation;

(d) provide for expenses incurred (including the payment of compensation) to be met out of levies collected in accordance with section 213(3)(b) of the Financial Services and Markets Act 2000 (c. 8) (the Financial Services Compensation Scheme);

(e) modify the effect of a transitional compensation provision;

(f) enable the Financial Services Authority to amend the Financial Services Compensation Scheme;

(g) modify the Financial Services and Markets Act 2000 in its application to an amendment pursuant to paragraph (f);

(h) make, or require the making of, provision for the making of a claim by a responsible person for compensation whether or not he has already satisfied claims in tort against him;

(i) make, or require the making of, provision which has effect in relation to claims for contributions made on or after the date on which this Act is passed.

(9) Provision made by virtue of subsection (8)(a) shall cease to have effect when the Financial Services Compensation Scheme is amended by the Financial Services Authority by virtue of subsection (8)(f).

(10) In subsections (7) and (8)—

(a) a reference to a responsible person includes a reference to an insurer of a responsible person, and

(b) “transitional compensation provision” means a provision of an enactment which is made under the Financial Services and Markets Act 2000 and—

(i) preserves the effect of the Policyholders Protection Act 1975 (c. 75), or

(ii) applies the Financial Services Compensation Scheme in relation to matters arising before its establishment.

(11) Regulations under subsection (7)—

(a) may include consequential or incidental provision,

(b) may make provision which has effect generally or only in relation to specified cases or circumstances,

(c) may make different provision for different cases or circumstances,

(d) shall be made by statutory instrument, and

(e) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

Part 2 E+W Claims Management Services

4 Provision of regulated claims management services E+W

(1) A person may not provide regulated claims management services unless—

(a) he is an authorised person,

(b) he is an exempt person,

(c) the requirement for authorisation has been waived in relation to him in accordance with regulations under section 9, or

(d) he is an individual acting otherwise than in the course of a business.

(2) In this Part—

(a) “authorised person” means a person authorised by the Regulator under section 5(1)(a),

(b) “claims management services” means advice or other services in relation to the making of a claim,

(c) “claim” means a claim for compensation, restitution, repayment or any other remedy or relief in respect of loss or damage or in respect of an obligation, whether the claim is made or could be made—

(i) by way of legal proceedings,

(ii) in accordance with a scheme of regulation (whether voluntary or compulsory), or

(iii) in pursuance of a voluntary undertaking,

(d) “exempt person” has the meaning given by section 6(5), and

(e) services are regulated if they are—

(i) of a kind prescribed by order of the Secretary of State, or

(ii) provided in cases or circumstances of a kind prescribed by order of the Secretary of State.

(3) For the purposes of this section—

(a) a reference to the provision of services includes, in particular, a reference to—

(i) the provision of financial services or assistance,

(ii) the provision of services by way of or in relation to legal representation,

(iii) referring or introducing one person to another, and

(iv) making inquiries, and

(b) a person does not provide claims management services by reason only of giving, or preparing to give, evidence (whether or not expert evidence).

(4) For the purposes of subsection (1)(d) an individual acts in the course of a business if, in particular—

(a) he acts in the course of an employment, or

(b) he otherwise receives or hopes to receive money or money's worth as a result of his action.

(5) The Secretary of State may by order provide that a claim for a specified benefit shall be treated as a claim for the purposes of this Part.

(6) The Secretary of State may specify a benefit under subsection (5) only if it appears to him to be a United Kingdom social security benefit designed to provide compensation for industrial injury.

Modifications etc. (not altering text)

C1 S. 49(1) restricted (31.1.2007) by The Compensation (Exemptions) Order 2007 (S.I. 2007/209), arts. 4-12

C2 S. 4(1) restricted (23.4.2007) by S.I. 2007/209, art. 13 (as inserted by The Compensation (Exemptions) (Amendment) (No.1) Order 2007 (S.I. 2007/1090), art. 3)

Commencement Information

I1 S. 4 wholly in force; s. 4 not in force at Royal Assent see s. 16; s. 4(2)(3)(5)(6) in force (1.12.2006) by S.I. 2006/3005, art. 3; s. 4(1)(4) in force at 23. 4.2007 by S.I. 2007/922, art. 3

5 The Regulator E+W

(1) The Secretary of State may by order designate a person (“the Regulator”)—

(a) to authorise persons to provide regulated claims management services,

(b) to regulate the conduct of authorised persons, and

(c) to exercise such other functions as are conferred on the Regulator by or under this Part.

(2) The Secretary of State may designate a person only if satisfied that the person—

(a) is competent to perform the functions of the Regulator,

(b) will make arrangements to avoid any conflict of interest between the person's functions as Regulator and any other functions, and

(c) will promote the interests of persons using regulated claims management services (including, in particular, by—

(i) setting and monitoring standards of competence and professional conduct for persons providing regulated claims management services,

(ii) promoting good practice by persons providing regulated claims management services, in particular in relation to the provision of information about charges and other matters to persons using or considering using the services,

(iii) promoting practices likely to facilitate competition between different providers of regulated claims management services, and

(iv) ensuring that arrangements are made for the protection of persons using regulated claims management services (including arrangements for the handling of complaints about the conduct of authorised persons)).

(3) If the Secretary of State thinks that no existing person (whether an individual or a body corporate or unincorporate) is suitable for designation under subsection (1), he may by order establish a person for the purpose of being designated.

(4) The Regulator shall—

(a) comply with any directions given to him by the Secretary of State;

(b) have regard to any guidance given to him by the Secretary of State;

(c) have regard to any code of practice issued to him by the Secretary of State;

(d) try to meet any targets set for him by the Secretary of State;

(e) provide the Secretary of State with any report or information requested (but this paragraph does not require or permit disclosure of information in contravention of any other enactment).

(5) The Secretary of State shall lay before Parliament any code of practice issued by him to the Regulator.

(6) The Secretary of State may pay grants to the Regulator (which may be on terms or conditions, including terms and conditions as to repayment with or without interest).

(7) A reference in this Part to the Regulator includes a reference to a person acting on behalf of the Regulator or with his authority.

(8) The Secretary of State may by order revoke a person's designation under subsection (1).

(9) While no person is designated under subsection (1) the Secretary of State shall exercise functions of the Regulator.

(10) The Secretary of State may by order transfer (whether for a period of time specified in the order or otherwise) a function of the Regulator to the Secretary of State.

6 Exemptions E+W

(1) The Secretary of State may by order provide that section 4(1) shall not prevent the provision of regulated claims management services by a person who is a member of a specified body.

(2) The Secretary of State may by order provide that section 4(1) shall not prevent the provision of regulated claims management services—

(a) by a specified person or class of person,

(b) in specified circumstances, or

(c) by a specified person or class of person in specified circumstances.

(3) Provision by virtue of subsection (1) or (2) may be expressed to have effect subject to compliance with specified conditions.

(4) Section 4(1) shall not prevent the provision of regulated claims management services by a person who is established or appointed by virtue of an enactment.

(5) For the purposes of this Part a person is “exempt” if, or in so far as, section 4(1) does not, by virtue of this section, prevent him from providing regulated claims management services.

7 Enforcement: offence E+W

(1) A person commits an offence if he contravenes section 4(1).

(2) A person who is guilty of an offence under subsection (1) shall be liable—

(a) on conviction on indictment—

(i) to imprisonment for a term not exceeding two years,

(ii) to a fine, or

(iii) to both, or

(b) on summary conviction—

(i) to imprisonment for a term not exceeding [F1 12 months]F1 ,

(ii) to a fine not exceeding [F2 the statutory maximum]F2 , or

(iii) to both.

[F3 (3) In relation to an offence committed before the commencement of section 154(1) of the Criminal Justice Act 2003 the reference in subsection (2)(b)(i) to 12 months is to be read as a reference to 6 months.F3 ]

Textual Amendments

F1 Words in s. 7(2)(b)(i) substituted (7.3.2008) by Legal Services Act 2007 (c. 29), ss. 187, 211, Sch. 19 para. 5(2)(a) (with ss. 29,192,193); S.I. 2008/222, art. 2(l)

F2 Words in s. 7(2)(b)(ii) substituted (7.3.2008) by Legal Services Act 2007 (c. 29), ss. 187, 211, Sch. 19 para. 5(2)(b) (with ss. 29,192,193); S.I. 2008/222, art. 2(l)

F3 S. 7(3) substituted (7.3.2008) by Legal Services Act 2007 (c. 29), ss. 187, 211, Sch. 19 para. 5(3) (with ss. 29,192,193); S.I. 2008/222, art. 2(l)

8 Enforcement: the Regulator E+W

(1) The Regulator may apply to the court for an injunction restraining a person from providing regulated claims management services if he is not—

(a) an authorised person,

(b) an exempt person, or

(c) the subject of a waiver in accordance with regulations under section 9.

(2) In subsection (1) “the court” means the High Court or a county court.

(3) The Regulator may—

(a) investigate whether an offence has been committed under this Part;

(b) institute criminal proceedings in respect of an offence under this Part.

(4) For the purpose of investigating whether an offence has been committed under this Part the Regulator may require the provision of information or documents.

(5) On an application by the Regulator a judge of the High Court, Circuit judge or justice of the peace may issue a warrant authorising the Regulator

[F4 (a)] F4 to enter and search premises on which a person conducts or is alleged to conduct regulated claims management business, for the purposes of investigating whether an offence has been committed under this Part.[F5 , and

(b) to take possession of any written or electronic records found on the search for the purposes of subsection (6).]

F5 (6) The Regulator may take copies of written or electronic records found on a search by virtue of subsection (5) for a purpose specified in subsection (3)(a) or (b).

(7) In subsections (4) to (6) a reference to the Regulator includes a reference to a person authorised by him in writing.

(8) The Secretary of State shall make regulations—

(a) specifying matters of which a judge or justice of the peace must be satisfied, or to which he must have regard, before issuing a warrant under subsection (5), and

(b) regulating the exercise of a power under or by virtue of subsection (4) or (5) (whether by restricting the circumstances in which a power may be exercised, by specifying conditions to be complied with in the exercise of a power, or otherwise).

Textual Amendments

F4 Text in s. 8(5) inserted (30.6.2008) by Legal Services Act 2007 (c. 29), ss. 187, 211, Sch. 19 para. 6(2)(a) (with ss. 29, 192, 193); S.I. 2008/1436, art. 2(e)

F5 S. 8(5)(b) and preceding word inserted (30.6.2008) by Legal Services Act 2007 (c. 29), ss. 187, 211, Sch. 19 para. 6(2)(b) (with ss. 29, 192, 193); S.I. 2008/1436, art. 2(e)

Commencement Information

I2 S. 8 wholly in force; s. 8 not in force at Royal Assent see s. 16; s. 8(8) in force (1.12.2006) by S.I. 2006/3005, art. 3; s. 8(1)-(7) in force at 23. 4.2007 by S.I. 2007/922, art. 3

9 Regulations E+W

(1) The Secretary of State shall make regulations about—

(a) authorisations under section 5(1);

(b) the functions of the Regulator.

(2) The Schedule specifies particular provision that may be made by the regulations.

(3) Transitional provision of regulations under this section may, in particular, make provision about the extent to which functions under this Part or under the regulations may be exercised in respect of matters arising before the commencement of a provision made by or by virtue of this Part.

10 Obstructing the Regulator E+W

(1) A person commits an offence if without reasonable excuse he obstructs the Regulator in the exercise of a power—

(a) under section 8(4) to (6), or

(b) by virtue of paragraph 14 of the Schedule.

(2) A person who is guilty of an offence under subsection (1) shall be liable on summary conviction to a fine not exceeding level 5 on the standard scale.

11 Pretending to be authorised, &c. E+W

(1) A person commits an offence if he falsely holds himself out as being—

(a) an authorised person,

(b) an exempt person, or

(c) the subject of a waiver in accordance with regulations under section 9.

(2) A person commits an offence if—

(a) he offers to provide regulated claims management services, and

(b) provision by him of those services would constitute an offence under this Part.

(3) For the purposes of subsection (2) a person offers to provide services if he—

(a) makes an offer to a particular person or class of person,

(b) makes arrangements for an advertisement in which he offers to provide services, or

(c) makes arrangements for an advertisement in which he is described or presented as competent to provide services.

(4) A person who is guilty of an offence under subsection (1) or (2) shall be liable—

(a) on conviction on indictment—

(i) to imprisonment for a term not exceeding two years,

(ii) to a fine, or

(iii) to both, or

(b) on summary conviction—

(i) to imprisonment for a term not exceeding [F6 12 months]F6 ,

(ii) to a fine not exceeding [F7 the statutory maximum]F7 , or

(iii) to both.

(5) Where a person commits an offence under this section by causing material to be displayed or made accessible, he shall be treated as committing the offence on each day during any part of which the material is displayed or made accessible.

[F8 (6) In relation to an offence committed before the commencement of section 154(1) of the Criminal Justice Act 2003 the reference in subsection (4)(b)(i) to 12 months is to be read as a reference to 6 months.F8 ]

Textual Amendments

F6 Words in s. 11(4)(b)(i) substituted (7.3.2008) by Legal Services Act 2007 (c. 29), ss. 187, 211, Sch. 19 para. 8(2)(a) (with ss. 29, 192, 193); S.I. 2008/222, art. 2(l)

F7 Words in s. 11(4)(b)(ii) substituted (7.3.2008) by Legal Services Act 2007 (c. 29), ss. 187, 211, Sch. 19 para. 8(2)(b) (with ss. 29, 192, 193); S.I. 2008/222, art. 2(l)

F8 S. 11(6) substituted (7.3.2008) by Legal Services Act 2007 (c. 29), ss. 187, 211, Sch. 19 para. 8(3) (with ss. 29, 192, 193); S.I. 2008/222, art. 2(l)

12 The Claims Management Services Tribunal E+W

(1) There shall be a tribunal to be known as the Claims Management Services Tribunal.

(2) The Tribunal shall be constituted as follows—

(a) members of the Financial Services and Markets Tribunal shall also be members of the Claims Management Services Tribunal,

(b) the President of the Financial Services and Markets Tribunal shall also act as President of the Claims Management Services Tribunal,

(c) the Deputy President of the Financial Services and Markets Tribunal shall also act as Deputy President of the Claims Management Services Tribunal, and

(d) the panel of chairmen of the Financial Services and Markets Tribunal shall also be the panel of chairmen of the Claims Management Services Tribunal.

(3) An appeal or reference to the Tribunal shall be heard by a member of the panel of chairmen—

(a) selected in accordance with arrangements made by the President, and

(b) sitting alone or, in accordance with those arrangements, with one or two members of the lay panel;

and a chairman who sits with one other member shall have a casting vote.

(4) The Lord Chancellor may make rules about the proceedings of the Tribunal; and the rules—

(a) shall include provision about timing of references and appeals,

(b) shall include provision for the suspension of decisions of the Regulator while an appeal could be brought or is pending,

(c) shall include provision about the making of interim orders,

(d) shall enable the Tribunal to suspend or further suspend (wholly or partly) the effect of a decision of the Regulator,

(e) shall permit the Regulator to apply for the termination of the suspension of a decision of his,

(f) may include provision about evidence,

(g) may include provision about any other matter of a kind for which rules under section 132 of the Financial Services and Markets Act 2000 (c. 8) (the Financial Services and Markets Tribunal) may make provision,

(h) may include transitional, consequential or incidental provision,

(i) may make provision generally or only for specified cases or circumstances,

(j) may make different provision for different cases or circumstances,

(k) shall be made by statutory instrument, and

(l) shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(5) The following provisions of Schedule 13 to the Financial Services and Markets Act 2000 shall have effect, with any necessary modifications, in relation to the Claims Management Services Tribunal—

(a) paragraph 5 (remuneration and allowances),

(b) paragraph 6 (staff),

(c) paragraph 7(3) and (4) (composition),

(d) paragraph 8 (sittings),

(e) paragraph 10 (practice directions),

(f) paragraph 11 (evidence), and

(g) paragraph 12(1) to (3) (decisions).

(6) In Part 1 of Schedule 1 to the Tribunals and Inquiries Act 1992 (c. 53) (tribunals under supervision of Council) insert at the appropriate place—

“Claims management services

The Claims Management Services Tribunal established by the Compensation Act 2006.”

13 Appeals and references to Tribunal E+W

(1) A person may appeal to the Claims Management Services Tribunal if the Regulator—

(a) refuses the person's application for authorisation,

(b) grants the person authorisation on terms or subject to conditions,

(c) imposes conditions on the person's authorisation,

(d) suspends the person's authorisation, or

(e) cancels the person's authorisation.

(2) The Regulator may refer to the Tribunal (with or without findings of fact or recommendations)—

(a) a complaint about the professional conduct of an authorised person, or

(b) the question whether an authorised person has complied with a rule of professional conduct.

(3) On a reference or appeal under this section the Tribunal—

(a) may take any decision on an application for authorisation that the Regulator could have taken;

(b) may impose or remove conditions on a person's authorisation;

(c) may suspend a person's authorisation;

(d) may cancel a person's authorisation;

(e) may remit a matter to the Regulator;

(f) may not award costs.

(4) An authorised person may appeal to the Court of Appeal [F9 on a point of law arising from]F9 a decision of the Tribunal.

Textual Amendments

F9 Words in s. 13(4) substituted (7.3.2008) by Legal Services Act 2007 (c. 29), ss. 187, 211, Sch. 19 para. 9 (with ss. 29, 192, 193); S.I. 2008/222, art. 2(l)

Commencement Information

I3 S. 13 partly in force; s. 13 not in force at Royal Assent see s. 16; s. 13(1)(3)(4) in force (23.1.2007) by S.I. 2007/94, art. 3

14 Interpretation E+W

In this Part—

• “action” includes omission,

• “authorised person” has the meaning given by section 4,

• “claim” has the meaning given by section 4,

• “claims management services” has the meaning given by section 4,

• “exempt person” has the meaning given by section 6(5),

• “regulated claims management services” shall be construed in accordance with section 4(2)(e),

• “specified”, in relation to an order or regulations, means specified in the order or regulations, and

• “the Regulator” means (subject to section 5(7)) the person designated under section 5(1) or, where no person is designated or in so far as is necessary having regard to any order under section 5(10), the Secretary of State.

15 Orders and regulations E+W

(1) An order or regulations under this Part—

(a) may make provision that applies generally or only in specified cases or circumstances,

(b) may make different provision for different cases or circumstances, and

(c) may include transitional, incidental or consequential provision.

(2) An order or regulations under this Part shall be made by statutory instrument.

(3) An order under section 4(2)(e)—

(a) may not be made unless the Secretary of State has consulted—

(i) the Office of Fair Trading, and

(ii) such other persons as he thinks appropriate, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

(4) An order under section 4(5) may not be made unless a draft has been laid before, and approved by resolution of, each House of Parliament.

(5) An order under section 5 may not be made unless a draft has been laid before, and approved by resolution of, each House of Parliament.

(6) An order under section 5(3) may include provision—

(a) for the appointment of members;

(b) for funding;

(c) for dissolution (which may include provision enabling the Secretary of State to make provision for the transfer of property, rights and liabilities).

(7) The first order made under section 6 may not be made unless a draft has been laid before, and approved by resolution of, each House of Parliament.

(8) An order under section 6 which has the effect of removing or restricting an exemption from section 4(1) may not be made unless a draft has been laid before, and approved by resolution of, each House of Parliament.

(9) Any other order under section 6 shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(10) Regulations under section 8 or 9 may not be made unless a draft has been laid before, and approved by resolution of, each House of Parliament.

Part 3 U.K. General

16 Commencement U.K.

(1) The preceding provisions of this Act, other than sections 1, 2 and 3, shall come into force in accordance with provision made by order of the Secretary of State.

(2) An order under subsection (1)—

(a) may make provision generally or only for specified purposes,

(b) may make different provision for different purposes,

(c) may make transitional, consequential or incidental provision, and

(d) shall be made by statutory instrument.

(3) Section 3 shall be treated as having always had effect.

(4) But the section shall have no effect in relation to—

(a) a claim which is settled before 3rd May 2006 (whether or not legal proceedings in relation to the claim have been instituted), or

(b) legal proceedings which are determined before that date.

(5) Where a claim is settled on or after that date and before the date on which this Act is passed, a party to the settlement may apply to a relevant court to have the settlement varied; and—

(a) a court is a relevant court for that purpose if it had, or would have had, jurisdiction to determine the claim by way of legal proceedings,

(b) an application shall be brought as an application in, or by way of, proceedings on the claim, and

(c) a court to which an application is made shall vary the settlement to such extent (if any) as appears appropriate to reflect the effect of section 3.

(6) Where legal proceedings are determined on or after that date and before the date on which this Act is passed, a party to the proceedings may apply to the court to vary the determination; and—

(a) “the court” means the court which determined the proceedings,

(b) the application shall be treated as an application in the proceedings, and

(c) the court shall vary the determination to such extent (if any) as appears appropriate to reflect the effect of section 3.

Subordinate Legislation Made

P1 S. 16(1) power partly exercised: 1.12.2006 appointed for specified provisions by {S.I. 2006/3005}, art. 3; 23.1.2007 for specified provisions by {S.I. 2007/94}, art. 3; 23.4.2007 for specified provisions by {S.I. 2007/922}, art. 3

17 Extent E+W

(1) This Act shall extend to England and Wales only.

(2) But section 3 (and section 16(3) to (6)) shall extend to—

(a) England and Wales,

(b) Scotland, and

(c) Northern Ireland.

18 Short title E+W

This Act may be cited as the Compensation Act 2006.