Hanging on the telephone: Government ban does not go far enough, say lawyers
Claimant solicitors and defendants have come together to attack the government’s proposed ban on cold-calling, with the Association of Personal Injury Lawyers (APIL) describing it as a “broken promise”.
The Association of British Travel Agents (ABTA) joined the chorus of criticism as it emerged that the addition of holiday sickness claims to the fixed recoverable costs scheme is scheduled to come into force in April, but there are delays in the Civil Procedure Rule Committee (CPRC).
Today is the second day of the Financial Guidance and Claims Bill’s committee stage in the House of Commons. Among other things, the bill transfers regulation of claims management companies from the Ministry of Justice to the Financial Conduct Authority (FCA).
The bill originally banned cold-calling just in relation to pensions, but during its passage through the House of Lords, the government performed a surprise u-turn [1] and decided to add a ban on cold-calling by claims management companies to its provisions.
The government’s suggested new clause to effect this (known as NC6) would prohibit live unsolicited direct marketing telephone calls in relation to claims management activities, except where the recipient has given prior consent to receiving such calls.
APIL’s submission to MPs said that NC6 “represents the government’s broken promise” to Parliament.
It said the rules on consent were “incredibly opaque and almost impossible to navigate”, and in any case changing them was not the solution.
“People, especially the most vulnerable, will struggle to understand whether they have consented to being cold called, and may not appreciate to what they are consenting.
“Considering the public’s attitude to cold calling, with 67% of people in favour of a ban on personal injury cold calling, it is hard to believe that someone would knowingly consent to being bombarded by nuisance calls and text messages. A complete ban would mean that the currently very complicated issue of consent never even arises.”
APIL instead supported NC9, a new clause submitted by Labour MPs, which would ban “unsolicited real-time direct approaches to members of the public carried out by whatever means, digital or otherwise”.
Further, it provides that “the use for any purpose of any data by companies carrying out claims management services, their agents or representatives where they cannot demonstrate to the satisfaction of the FCA that this data does not arise from any unsolicited real-time direct approach to members of the public carried out by whatever means, digital or otherwise”.
The Fair Telecoms Campaign described NC6 as “an utterly meaningless gesture” because it would have little effect.
It pointed out that consent would not apply to automated calls and text messages, and like APIL said NC6 did not honour the government’s promise.
It too supported NC9, which it said “clearly expresses the proper and necessary objective”.
ABTA similarly argued that NC6 would be “ineffective” in tackling the activities of CMCs or reducing false compensation claims, as it only dealt with telephone calls, and backed a provision like NC9.
“In particular, ABTA believes it is important to address the issue of how CMCs receive, and manage consumer data, in order to restrict the operations of claims farmers,” it said.
The Association of British Insurers backed NC6 but argued that “the most effective way to stop nuisance calling is by removing the financial incentives that encourage firms to harass the public in this way” through the Civil Liability Bill.
Meanwhile, newly published minutes from the December meeting of the CPRC showed that it was asked to sign off the rule change to bring holiday sickness claims within the public liability fixed costs regime “without consideration and finalisation of the pre-action protocol (PAP), the draft of which would come to the committee at a later date but would be signed off before the rule change comes into effect in April 2018”.
The minutes recorded Ministry of Justice official Robert Wright telling the committee that the timeline for the project was “very tight”, but the call for evidence and meetings with stakeholders had concluded.
His hope had been to get the rule change in a statutory instrument to be laid in December 2017, but the CPRC did not comply.
The minutes said: “The call for evidence had elicited about 40 responses, and those responses were generally as anticipated. Part of the difficulty lay in the application of the PAP to potentially more complex non-gastric illness holiday claims.
“The rule amendment which gives power to the PAP is quite straight forward as the details are in the PAP not the rule. [Mr Wright] asked the committee to consider the rule change now and the MoJ would continue to work with the subcommittee to finalise the PAP amendments for the next meeting.”
Some committee members did not think it was appropriate to make the rule without seeing the responses to the call for evidence and without a clear steer on how the PAP would look.
The minutes said: “It was agreed that it would not be appropriate to make the rule amendment in advance of the development of the PAP.”
It is not clear what impact this decision will have on the plan to make the rule change effective on 6 April.