The Compensation Act 2006 is an Act of parliament. It has been introduced into the United Kingdom’s legal system in response to concerns about a growing compensation culture, but conversely to ensure that the public received dependable, reasonable and just advice as to prospects risk and potential rewards which flow from the service of claims management companies, firms and individuals. In introducing the act, Baroness Ashton said that it was intended:

to tackle perceptions that can lead to a disproportionate fear of litigation and risk averse behaviour; to find ways to discourage and resist bad claims; and to improve the system for those with a valid claim for compensation.”

The Act brought in specific changes to the law of liability and damages in negligence and breach of statutory duty. It further introduced a scheme of regulation for claims management companies. The Act has a purpose and that purpose can have wide implications to any and all providers of a timeshare relinquishment which obtains compensation for the consumer. In breach of the act renders the breach a criminal offence carrying a prison sentence of up to 2 years. Enterprises operating in claims management ought to look very carefully at the service they provide and have an honest appraisal by the MoJ at to the possible risk which the directing minds might have overlooked. The TCA has been in discussions with the Ministry of Justice  (MoJ) and their message was abundantly clear in that any and all works performed by unregulated enterprises is at risk of criminal prosecution. A simple guide to the Act can be viewed here. Furthermore by considering appendix “A” the offeree and service users can determine if you need to be registered to avoid criminal prosecution. In any event and to preserve your position written assurance ought to be sought and conformation received as to the particular service which is being offered. The TCA have knowledge of many companies who might be inadvertently and innocently in breach of this Act and would advise those enterprises to seek counsel immediately. We are told that dispensations whilst applications are being processed are available and until such time as the MoJ can confirm the position in respect to a particular enterprise.


Last modified: August 28, 2015