CMC regulation fees to remain unchanged for 2017–2018

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The Ministry of Justice (MoJ) has said that CMC regulation fees will remain unchanged for the 2017–2018 regulatory year.

Following a consultation – which was sent to all regulated CMCs and members of the Claims Management Regulatory Consultative Group but only received six responses – the MoJ has opted to not raise fee levels. Fees are set in advance of the year to which they apply, and are calculated on the number of CMCs expected to apply or maintain their authorisation into the following year.

In its reply to the consultation’s responses, the MoJ said that it recognised the disadvantage of using historic turnover figures, particularly in a turbulent and potentially declining market, to calculate future fees. Nevertheless, it said that it viewed the method as the best one to use at present.

“Our fees model has always been based on retrospective turnover performance together with an assessment of future market exits and regulatory costs,” it said.

“We consider that provides the most appropriate, effective and fair way to calculate a fee charged in advance of the regulation year to which it relates.”

However, the MoJ did say that it was likely that the FCA would reconsider the fee charging framework when responsibility for regulating claims management services is transfered to the financial watchdog.

In 2017–2018, CMCs will therefore continue to pay £2,000 to register with the MoJ and CMCs whose turnover is below £88,889 will pay a flat annual regulation fee ranging between £200 and £800. The percentages of annual turnover levied on CMCs with a turnover above the flat-fee threshold of £88,889 will be 0.9% of annual turnover up to £1 million, 0.8% of annual turnover up to £5 million and 0.75% of annual turnover over £5 million.

The existing financial products and services rate levied on annual turnover from regulated activities in the financial products and services sector will also remain at 0.145% and the fees caps on both the annual regulation fee and the financial products and services fee will continue to be £150,000.

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Marek Handzel

Marek Handzel is the editor of Claims Magazine. Marek welcomes articles, letters, or feedback from readers and can be reached by emailing marek.handzel@barkerbrooks.co.uk