A claims management company specialising in finding noise-induced hearing loss cases has become the first to be penalised by new government fining powers.
The Hearing Clinic, based in Derby, was fined £220,000 by the Ministry of Justice’s claims management regulator after hundreds of complaints were made about speculative calling.
Many of those who complained said they subscribed to the Telephone Preference Service, indicating that they did not want to receive such calls.
The penalty is the first to be issued under new powers allowing regulators to fine firms in breach of the code of conduct up to 20% of their annual turnover.
The company was warned that it will face further sanctions, including suspension and possibly closure, if it breaks the rules again.
Claims management regulator Kevin Rousell (pictured) said: ‘The new fines mean we have greater powers to crack down on claims management companies that make nuisance calls. Companies should be in no doubt that if they break the rules then we won’t hesitate to fine them in addition to the tough action we already take.’
Observers will note that a company specialising in hearing loss claims was the first to face a fine under new powers. The issue of hearing loss claims is currently under scrutiny, with insurers calling for costs limits and the Civil Justice Council asked to consider concerns about the growing number of claims.
The MoJ says 296 claims firms received warnings from the regulator in 2014/15 and 105 had their licences removed. The total number of companies in the industry has fallen by 300 this year, to 1,752. This is down from a peak of 3,367 in 2011.
The sector has been subject to regular reform in recent years, with referral fees banned in personal injury claims in 2013 and complaints about claims management companies coming under the wing of the Legal Ombudsman earlier this year.
The Gazette has asked the Hearing Clinic for comment.