Ministry of Justice Considering Ban on Inducements for Compensation Claims?

A prominent figure in the Ministry of Justice (MoJ) has hinted that the government is again considering banning inducements and incentives in the personal injury and medical negligence claims market.

Head of Civil Litigation Funding and Costs for the MoJ, Robert Wright, stated that the MoJ had “concerns” over the way some solicitors were using incentives in their advertising to attract compensation claim clients.

Claims management companies, which are regulated by the MoJ are already banned from offering inducements, but the Solicitors Regulation Authority (SRA) is against a similar ban for solicitors as it says there is no evidence that the practice is harmful. The Law Society appears to be taking a similar view.

Mr Wright, in a speech to a recent conference held by the Association of British Insurers, said that he had personally seen a billboard advertisement offering inducements such as a smart phone, gold coin or laptop for making a claim. This advert in question did say that terms and conditions applied, but these were not detailed on the company’s internet site.
Robert Wright stated that there should not be the culture of “encouragement to claim” that has been an issue in the past. The government has already banned claims management companies from using these practices and is “concerned” that the use of inducements is spreading.

The government takes a very different view to the SRA and is to look at different ways of restricting the practice of inducements, such as self-regulation or an outright ban.
Inducements is a divisive issue in the claims community, with some individual law firms feeling that it is their right to use this sort of marketing to bring clients to them. However, consumer and other groups have raised concerns that offering cash or a gift increases public perceptions of a compensation culture.

Our view – the whole issue of these inducements is wrong . We attract clients because we are genuine medical negligence specialists, not because we bribe our client to instruct us.

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