Claims Management

The Financial Conduct Authority (“FCA”) is the regulator for Claims Management Companies (“CMCs”) and took over responsibility from the Ministry of Justice’s Claims Management Regulator in March 2019.

If you intend to carry out regulated claims management activities, you must be authorised by the FCA. Operating without authorisation where required is a breach of Section 19 of the Financial Services and Markets Act 2000 and can result in serious regulatory consequences.

What are regulated claims management activities?

Claims management activity is defined in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 and applies where a firm carries on certain activities by way of business in relation to specific categories of claims. 

There are six different areas which fall within regulated claims management activities - personal injury, employment, financial services/financial products, housing disrepair specified benefits and criminal injury. 

If you intend to help claimants to purse any of the above types of claims, you will need to be authorised by the FCA.  Depending on the activities that you will be conducting, there are two main types of FCA permissions you will need: 

Seeking out referrals and identifying claims

This includes identifying or targeting potential claimants, for example through marketing or accident capture activities, assessing whether an individual may have a valid claim, and referring or introducing customers to solicitors or claims management companies. It also covers situations where a firm receives referral fees or any other form of economic benefit linked to such introductions. 

👉 You do not need to handle the claim yourself — lead generation alone can be regulated.

Advising, investigating or representing claimants. 

This is a broader and more complex permission and includes advising customers on whether to pursue a claim, assessing liability and the merits of a claim, gathering evidence such as medical reports and witness statements, acting on behalf of the customer in progressing the claim, and negotiating settlement outcomes. 

👉 If you are involved in progressing or influencing a claim, you are likely within scope. 

Key considerations

Your FCA application needs to pay particular attention to:

• Documented compliance arrangements - :Your application must clearly explain what compliance arrangements you have in place to meet your regulatory obligations.  This includes having the relevant policies and procedures to run your business in a compliant manner.

• Senior Management Accountability - All CMCs must have at least one Senior Manager who will be approved by the FCA.  Companies with an annual turnover of £1 million or more will also need to appoint an additional Senior Manager for the SMF16: Compliance Oversight Function.

• Client Asset Oversight Officer - Any firms which hold money belonging to a customer must appoint the above individual who will be responsible for client money operations, reporting to the Board and completing client money-related aspects of the regulatory returns.

• Solvency Requirements - All CMCs need to have minimum levels of capital depending on their annual income.  If your income is below £1 million, you will be Class 1 CMC firm and will need to hold £5000.  If your income is above £1 million, you will need to hold £10,000.  In addition, if you are holding client money, you will need to hold an additional  £20,000 in capital.

Common Pitfall: Accident Management Firms 

Accident management and credit hire firms often sit close to the regulatory boundary. You may require FCA authorisation if your business promotes “non-fault claims” or “claims management services”, refers customers to solicitors (particularly where any benefit is received), or asks questions to assess injury or claim eligibility. Authorisation may also be required if you act as a central coordinator of the claims process. 

By contrast, you are more likely to fall outside scope where your services are limited to vehicle recovery, repair, and mobility support. Any interaction with claims must be incidental and administrative, and you must not receive referral fees or advise on, represent, or influence claims. 

FCA fees

The FCA application fee depends on the type of permission being sought. 

As of April 2026, for firms carrying on seeking out, referrals and identification of claims, the application fee was £2,790, whereas for firms seeking permission to advise on, investigate, or represent personal injury claims, the fee was £11,150. The higher fee reflects the FCA’s view that firms directly involved in handling and progressing claims present a greater risk to consumers and therefore require a higher level of regulatory scrutiny. 

How we can help you  

• We have an experienced team who understands the regulatory risks relating to FCA CMC applications which will help you to avoid the common pitfalls.  

• We have subject matter expertise in the FCA rules as well as the FCA Claims Management Rules: - CMCOB.

• We can help you manage the key regulatory obligations relating to your business such as pre contract information, customer terms and conditions, complaints handling, vulnerable customers management etc. 

• We also provide a fixed fee review service for an application which you may have prepared yourself.  We can check your application before you submit it to the FCA.