Thousands of companies are caught up by this regulation, which requires paying the £400 fee as well as completing onerous paperwork each year. As a result only larger claims management companies have thrived, as is usually the case with gov't regulation: big business NEEDS regulation to thrive, survive and fend off competition from smaller players.
Our business is very simple. We run Google ads and send leads on to our customers, yet we are regulated by the Ministry of Justice and have to pay a £400/year fee because we are involved in the "Claims Management" value chain. The consumer is well able to get the information he/she needs regarding claims management companies who pass on the consumer's claims to solicitors who provide "no win no fee" legal services, and since regulation was introduced, many providers have consolidated or simply gone out of business due to the requirements imposed.