Financial Guidance and Claims Bill: 2nd Reading

This week, the Financial Guidance and Claims Bill underwent its 2nd reading in the House of Commons. In this article, we report on the latest debate between MPs and the changing attitudes of the Government on introducing a cold-calling ban for personal injury claims.[i]

In edition 210 of BC Disease News (here), we reported that the Financial Guidance and Claims Bill had been passed through the House of Lords. During the 3rd session in the Upper House, an excerpt, in support of a future ban, was added to the long title of the Parliamentary Bill, pursuant to Lord Sharkey’s Amendment 33:

A bill to make provision establishing a new financial guidance body (including provision about cold-calling and a debt respite scheme); to make provision about the funding of debt advice in Scotland, Wales and Northern Ireland; and to make provision about the regulation of claims management services’.

Further, Baroness Buscombe stated, on behalf of the Government, in respect of a future ban on cold-calling in the personal injury sector:

Both we and the Financial Conduct Authority are aware that our plans for whiplash reform could have an impact on this market. I reassure him that the FCA will certainly keep this sector under review and will monitor developments closely during the implementation phase’.

In the House of Commons, there has been widespread support for a cold calling ban in PI claims. However, Work and Pensions Secretary, Esther McVey, when listing various amendments welcomed across the House of Lords, elected against mentioning a PI ban and, instead, chose to speak about the pensions ban in isolation.

SNP Consumer Affairs Spokeswoman, Patricia Gibson, pressed Ms McVey to clarify the scope of the proposed ban. To this, Ms McVey confirmed:

We are of course looking at pensions today, but other rules, regulations and laws are in place to protect people from unsolicited, unwanted cold calls and the Department for Digital, Culture, Media and Sport is at the moment looking at how to strengthen them further’.

Then, when asked by Conservative, Chris Philp, if these powers ‘will apply not just to financial guidance but to claims management companies’, Ms McVey indicated that that was their intention was to apply to both, but that ‘finer points will be worked out by the body [the Financial Conduct Authority] as it works responsibly on behalf of UK citizens ...

Further detailing plans to strengthen regulation on unsolicited calls, Ms McVey went on to say that:

‘... the Department for Digital, Culture, Media and Sport is currently working through the details of an amendment to prohibit CMCs from making live, unsolicited calls unless the receiver has given prior consent. That step, combined with the government’s previous actions in this area, should act as a warning to those acting unlawfully that we will not rest until the problem has truly been eradicated’.

Moreover, in respect of punitive measures, Ms McVey indicated that:

The maximum penalty for breaches will remain the same; that is up to half a million pounds. We must make sure that people do not abuse the system, which is why, particularly in this bill, we are looking at ways to ban pension cold calling’.

However, Labour’s former Shadow Justice Minister, Andy Slaughter admitted to feeling confused over the somewhat contradictory intentions of the Government at this 2nd reading stage:

I sense some puzzlement on both sides of the House that the government are pulling their punches on cold calling. There is to be greater regulation; that is to be extended in some areas. Apart from the cold callers themselves, the consensus is that this should be banned. That includes claimant organisations such as the Association of Personal Injury Lawyers. Why will the government not undertake now to ban spam texts and cold calls?

Nonetheless, Ms McVey attempted to provide an assurance to Mr Slaughter, as follows:

‘We have brought that forward. That will be for this bill. For pensions, there will be a ban. It is about working out how that is done, how we deliver it and how it is possible, but that is the intention’.

Ms Gibson, nearing the conclusion of the 2nd reading, voiced her concern over potential incompleteness of the Bill:

If we are banning cold calling to protect people’s pensions, that is an admission that cold calling is a problem. If it is problem with pensions, it is a problem for all consumers in all areas. We need to protect people, and cold calling causes fundamental problems. I am extremely disappointed with the shilly-shallying around extending the recognition of the need to protect people outwith the pensions sector’.


[i] Neil Rose, ‘Government accused of “pulling its punches” over PI cold-calling ban’ (23 January 2018 Legal Futures) <> accessed 24 January 2018.