The main purpose of the Compensation Act 2006 is to impose a form of regulation on claims companies generally. As from 23rd April 2007 persons providing a wide variety of claims management services, including those providing employment law advice to claimants, those representing claimants at employment tribunals and those provising personal injury claims services, need official authorisation to operate unless they are exempted. Contravention is a criminal offence (Compensation Act 2006 s.7).

Until 23rd April 2007 anyone could represent anyone in an employment tribunal (see notes at Procedure of Employment Tribunals/rights of advocacy ). That has now changed. A new "Regulator" is appointed to "to authorise persons to provide regulated claims management services [and] to regulate the conduct of authorised persons". The government expressly said at an early stage that employment tribunal claims, and companies offering to represent parties in employment tribunal cases, would be amongst the first to be regulated. Practising barristers, solicitors and legal executives and certain others who are already subject to some form of regulation or code of practice are specifically exempted.

The government has produced a guidance note "Who needs to be authorised under the Compensation Act 2006, 6th April 2007?". There is an on-line registration form for businesses requiring authorisation and the system is adminstered by the Claims Management Regulation Monitoring and Compliance Unit PO Box 7284, Burton on Trent, Staffordshire, DE14 9DP (tel: 0845 450 6858).

Although what is now the Compensation Act was originally of limited relevance to the substance of employment law, in June 2006 the Government announced that it would propose an amendment to what was then the Compensation Bill to introduce a provision to, in effect, overturn the House of Lords' May 2006 decision in Barker v Corus (UK) plc and other cases HL 2006 UKHL 20 (see notes at Health and Safety at work/asbestos ). This has been done by Compensation Act 2006 s.3 which makes all relevant employers jointly and severally liable in cases like Barker v Corus when mesothelioma has been contracted but it is impossible to be certain in which of several employments the damaging fibres were ingested or inhaled (there will of course be a right for any one of the employers who is sued to claim appropriate contribution from the other or others of them).

There are full official explanatory notes to the Compensation Act 2006 on the Parliament website.

See also notes at Employment tribunals/representation of claimants .