CMCOB 4.3 Pre-contract requirements

Before entering into an agreement with the customer that relates to regulated claims management activity, the firm must:

1. (1)

   take reasonable steps to:

   1. (a)

      ascertain whether the customer has other methods for pursuing the claim, and if so:

      1. (i)

         ensure that the customer understands that those methods are available to them;

      2. (ii)

         seek confirmation in writing from the customer that the customer does not wish to use those methods, and the customer’s reasons for not wishing to do so;

      3. (iii)

         record the customer’s confirmation and reasons; and

   2. (b)

      draw the customer’s attention to the information provided under CMCOB 4.2.2R(2)(g) and (h), if that information is relevant to the claim;

   [Note: in part, CAPR CSR 10]

2. (1A)

   where the information provided under CMCOB 4.2.2R(2)(g) or (h) is relevant to the claim, obtain a “standalone” signed statement in a durable medium from the customer, dealing only with this issue, confirming that the customer:

   1. (a)

      is aware of the matters in CMCOB 4.2.2R(2)(g) or (h) (or both (g) and (h) where both are relevant); and

   2. (b)

      wishes to use the services of the firm to make the claim.

3. (2)

   make it clear to the customer that the customer may seek further advice or look for another person to assist the customer with the claim, subject to any time limits within which a claim must be made; and

   [Note: CAPR CSR 13]

4. (3)

   take reasonable steps to ensure that the customer understands the agreement;

   [Note: in part, CAPR CSR 14

5. (4)

   ask the customer whether they have outstanding liabilities with the person against whom the claim is to be made and explain that if they do:

   1. (a)

      that any damages, compensation or settlement monies might, in certain circumstances, be off-set against those outstanding liabilities; and

   2. (b)

      the customer will, where necessary, need to pay the firm’s fees from their own funds;

6. (5)

   in the case of pension related claims explain:

   1. (a)

      that the firm’s fee may become payable before the customer has access to their pension; and

   2. (b)

      that the customer will, where necessary, need to pay the firm’s fees from their own funds;

7. (6)

   ask the customer if they, whether in Great Britain or in another jurisdiction:

   1. (a)

      have ever been declared bankrupt;

   2. (b)

      are subject to a bankruptcy petition;

   3. (c)

      are subject to, or have ever been subject to, an individual voluntary arrangement;

   4. (d)

      have proposed an individual voluntary arrangement which is yet to be approved or rejected by creditors;

   5. (e)

      are currently subject to, or have ever been subject to, a debt relief order; or

   6. (f)

      are or have ever been subject to any other process or arrangement which is similar to those listed in (a) to (e) including but not limited to sequestration; and

   if so, explain that any damages, compensation or settlement monies might, in certain circumstances be off-set against the customer’s outstanding debts; and that the customer will, where necessary, need to pay the firm’s fees from funds that are not subject to the processes or arrangements listed above at (a) to (f).

8. (7)

   record the customer’s response to questions (4) and (6) and where the customer does not know the answer, advise them to check.