Bad CMCs face £30k payouts under new MoJ rules

Misbehaving claims management companies (CMCs) face compensation payouts of up to £30,000 under new plans announced by the Ministry of Justice (MoJ).

The MoJ, which has regulated CMCs since 2007, has just given responsibility for handling complaints about the firms to the Legal Ombudsman, according to The Independent.

The MoJ had no power to award consumers compensation, but the ombudsman can order firms to pay up to £30,000. The ombudsman is now deciding whether to increase this cap to £50,000.

However, the MoJ will still regulate CMCs through its Claims Management Regulations Unit.