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Personal Injury Inducement Ban Under Consideration by MoJ

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Robert Wright, head of Civil Litigation Funding and Costs at the Ministry of Justice has given the strongest hints yet that the government is considering banning inducements for making personal injury claims. He stated that the MoJ has “concerns” over the way solicitors are using incentives in their marketing activities to attract accident compensation claim clients.

A ban is already in place on claims management companies, which are regulated by the Ministry of Justice, from offering inducements. The Solicitors Regulatory Association (SRA) is against a similar ban for legal firms as it says there is no hard evidence that the practice is harmful to the consumer.

In a speech to an Association of British Insurers conference recently, Mr Wright said that he has personally witnessed this sort of advertising on a billboard offering “a mobile phone, gold coin or laptop” in return for making a compensation claim. The advert did say that there were terms and conditions applicable to the claim, but these were not given on the company’s website.

Wright stated that we should not see a return to the “encouragement for claims” culture we had in the past. After these sorts of practices were banned for claims management companies, the government has “concerns” that they are spreading to the wider legal environment.

Robert Wright also confirmed that the SRA and the government hold different view on this issue, and that the government is looking at the various different ways in which the practice can be restricted, from self-regulation to an outright ban.

The offering of inducements is controversial within the legal community, and individual legal firms defend the right to use these sorts of marketing tactics to bring in work. Other groups feel that offering cash incentives or free gifts helps spread the perception of a “compensation culture” in the UK.

My view – I can see absolutely no purpose in the so-called inducements. A good claim is a good claim – why would anyone need some sort of freebie to make one. It’s not good for the public, genuine victims of personal injury or medical negligence or the legal profession itself. It simply encourages the idea that there is actually a widespread “compensation culture” where millions of people are making fraudulent claims. The sooner that these daft freebies are banned outright the better.

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