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Government Proceeds with PI Inducements Ban

The Government has proceeded with implementing a ban on Personal Injury firms offering inducements to clients, inserting a new clause into the Criminal Justice and Courts Bill.

What the ban means is that those firms who are offering incentives such as free i-Pads, or large cash advances in return for a claimant’s business, can no longer operate in that way, as the Government look to continue their clampdown on fraud within the industry.

The proposal was met with stern resistance from the Solicitors Regulation Authority (SRA), who argue that there is no sufficient evidence to suggest that such a practice has had any effect on the number of spurious or fraudulent claims within the profession, but this seems to have fallen on deaf ears as the Justice Minister, Lord Faulks, informed the House of Lords of the MoJ’s intentions.

Lord Faulks told the peers: “Such incentives contribute to the so-called compensation culture by offering rewards by bringing a claim, regardless of its merits.”

“Expenditure on these inducements might also have a detrimental effect on the quality of service provided to the client. Furthermore, in a significant number of cases, the client is then denied the money or benefit initially offered because of terms and conditions.”

“This practice has no doubt developed because of the excessive legal costs in personal injury cases which have already been addressed by our reforms in part 2 of the LASPO Act 20132, but it is a practice that we need to stop to protect consumers and, indeed, the reputation of the legal profession more widely.”

The news was given the seal of approval by the Motor Accident Solicitors Society (MASS), as chairman, Craig Budsworth, welcomed the ban against what he described as an unprofessional and unethical practice.

He said: “We’re pleased that inducements to entice someone to claim are finally to be banned. We do not believe that it can be considered professional or ethical to offer cash promises of up to £2,000, shopping vouchers and even free iPads to attract new claimants.”

That being said, they were keen to ensure that those claimants who need legitimate assistance in order to proceed with their claim, could still be provided saying: “Some firms give or lend electronic devices or mobile phones to claimants with complicated claims so that they can keep in regular touch, keep a record of expenses, schedule medical appointments and other related activity. We believe that it would be to the detriment of some claimants if such a practice was caught within a ban on inducements.”

Marketing Partner at Scott Rees & Co, David Byrne, supported the move, saying: “What this does is level the playing field across the profession and allows smaller personal injury firms a stronger foothold in the competition for clients.”

“It will also ensure that the claimant is choosing their legal representation for the right reason and not because they can get an iPad out of it, therefore rewarding those solicitors who offer the highest quality of service to the claimant’s needs.”

 

 

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