Senior Ministry of Justice official hints at personal injury inducements ban

This article was published on: 05/16/14

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The Head of Civil Litigation Funding and Costs for the Ministry of Justice (MoJ) has hinted that the government may take another look at introducing a ban on inducements for personal injury claims.

Robert Wright raised the question over the legitimacy of offering such incentives to potential claimants, saying that the department retained ‘concerns’ over the practice.

Last year the MoJ took a tough line on inducements, used to bring in work, when it addressed Claims Management Companies (CMCs), which resulted in them being banned from offering them. But so far a similar ban has not been forthcoming for the personal injury industry, largely thanks to strong opposition from the Solicitors Regulation Authority (SRA), who claim there is no evidence that the practice harms the consumer.

Talking at an ABI conference, Wright said: “There should not be the encouragement for claims we have seen in the past.

“The government has banned the practice for CMCs and is concerned about it happening more widely.”

Mr Wright also told the conference that the government had a different view to the SRA and hinted that they will be looking at various, alternative models, to restrict the use of inducements to bring in work.

Such a move from the government though, would not be as badly received from the claimant industry as many would expect though.

Although it is true that some firms, namely the ones who are using such practices, would protest against any kind of ban, there are many personal injury firms who have welcomed the promise for the removal of the practice.

For many the ability to offer such incentives, only serves to feed claims of a compensation culture.

Wright also told the conference that the MoJ were keeping the small claims limit under review for the time being and that they were ‘supportive’ of extending the scope of fixed recoverable costs.

The claimant industry will be hoping that these were just words to appease the insurer audience, rather than hints of future changes to come.

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