Let's be careful out there 

I know. I know.  I've have written on this topic on several previous occasions,  and so you might with some justification feel that I have developed an obsession with the topic.  I am referring to the activities of Claims Management Companies (CMCs), which are apparently regulated by the FCA, although you'd be hard-pressed to detect any evidence of this, based upon ValidPath's now extensive experience of entirely baseless redress-related activity.  Earlier this year, provoked beyond measure by the sheer waste of valuable time, needed to deal with spurious claims, I wrote to the acting head of the FCA about the matter, detailing my concerns.  It would perhaps be of no surprise to anybody to learn that we never received even a cursory acknowledgement.  I suppose that there is a way of expressing a disdain which goes beyond a response along the lines of "We care so little about the matter that you have raised, that we have immediately shredded your letter".

Let's be under no illusion, this is a blight on our profession.  It is as if the FCA was regulating both the livestock industry and the activities of the Tetse Fly, to ensure that the latter was free to deliver its payload of toxins, but in a good, compliant way.  What we find in practice is that claims for redress arrive in clusters, and they almost always share the following characteristics:

  • They get the recipient firm's name confused with another firm
  • They (therefore) use the wrong address, whilst still (uncannily) referencing the correct name of firm which ought to be receiving the complaint
  • They refer to regulated activities which do not lie within the permissions of the firm which receives the complaint
  • They cite clients who have never, at any time, received a regulated service from the recipient firm- and are, almost always, wholly unknown to them
  • They devote a considerable proportion of what is usually an uncomfortably long letter, to regurgitating huge swathes of FCA regulations which bear only a passing relevance to the claim itself - this tactic is based upon 'Storming Norman' Schwarzkopf's shock and awe strategy, designed to pre-emptively stun the enemy into submission
  • A style of writing which somehow manages to combine both patronising and sneering approaches, in an attempt to suggest that the CMC knows so much more than the hapless recipient, who should therefore repent in dust and ashes.  And, of course, write a large cheque.
In addition, in more than a few instances, we find that CMC's have clearly derived their technical skills, when it comes to writing redress claims, from the Harry Potter School of Composition.  Assertions (read 'accusations') are flung about with gay abandon that not only bear no resemblance to an actual client file, but which betray a complete absence of even a moment or two of the kind of sober reflection which would suggest a vanishingly low probability of accuracy.  Nevertheless, it is one's joyful privilege to spend hours of one's brief but precious existence on this planet by responding to a piece of fantasy fiction in a professional and respectful way.

That 'one' is me, by the way.  This may help you to at least excuse a developing obsession.

There are a few lessons here which may help all of us:
  • Evidenced by these kinds of activities by certain CMCs, there are hostile forces out there, intent on making you (and I) take fiscal responsibility for matters that have absolutely nothing to do with us;
  • The kinds of people who are responsible for the activities outlined above don't care about facts, or truth, or accuracy.  They have contingent business models which are entirely dependent upon what looks, to the observer, like a kind of blackmail;
  • Not only do the regulatory authorities demonstrate little interest in supporting innocent intermediary firms which are being damaged by these cynical tactics, they are in fact tacitly endorsing these practices, through their own disinterested stance, or through their preoccupation with the hard cash component of redress welfare;
  • Knowing the nature of this regulated sector helps all of us to be prepared - whilst ValidPath will be 101% behind its Members, with an appropriate support infrastructure, you should (a) expect the worst, and (b) expect no tangible benefit from regulation;
  • Doing a 'good job' or even 'the best job' for your clients is no longer enough, if it ever was.  You have to be in a position to demonstrate that you have done so - which is why ValidPath has been, over many years, so careful and explicit about how the suitability of advice needs to be documented, at every step in the advice process;
  • ValidPath Members who use our practice-management infrastructure, and in particular take the 'Advice Threads' seriously, are in the best possible place to defend themselves against this kind of unseen, constant form of hostile exploitation.  To do otherwise is to betray an unhealthy propensity for shooting yourself in the foot.
Some of us may not be old enough to recall Hill Street Blues, but...please... Let's be careful out there.
Kevin Moss, 05/11/2020