Let’s make this clear: inducements to purchase a service or product are a fundamental and legitimate part of business. I’m still with the same bank that offered me free cash back in freshers’ week at university, and I’ll bet many others are in the same boat.
Turn on the television for Countdown and there’ll be some washed up celebrity promising to ease your journey to the grave with a free Parker pen. It’s good marketing, giving your business an edge in a crowded marketplace where there is little else to differentiate between products.
We’re all well acquainted with law firms that offer £1,500 upfront for a personal injury claim. Perhaps they might also bung in an iPad for good measure.
This week the SRA decided there was nothing in the offers that harms the client – which considering they’re getting freebies, is glaringly obvious. I see the point that some claimants need an upfront payment to help them meet short-term costs. Their car might be out of action forcing them into public transport or they might be missing out on work if they’re self-employed.
A sum to tide you over until the case resolves is only fair.
I know of several excellent and trustworthy firms that shunned paying referral fees in favour of offering inducements. You can debate the rights and wrongs of both, but at the very least it’s better to line the pockets of victims than insurance companies.
And don’t let the nefarious insurers preach about the fairness of inducements. They’re the ones on the phone to accident victims within hours offering them cash to settle early and go away – not an inducement but often a wilful attempt to encourage vulnerable people to settle without any legal advice.
But client damage is not really the issue with inducements, as everyone well knows. There’s no getting away from the fact that they damage the reputation of the legal profession.
They plant the idea of the compensation culture in the public – a seed which is well watered by the government and insurance lobby. When the Association of British Insurers talks of ambulance chasers (forgetting its members used to sell the address of the hospital), inducements are an open goal for that rhetoric. Inducements just feel grubby, giving the impression that PI claims are a back-alley job run by salesmen.
Most of all they turn claims into a product and a commodity, to be traded and bartered for.
I don’t blame the SRA for not wanting a ban – I’ve discussed in the past how ambivalent they’ve been about policing the government’s referral ban and they’re hardly going to be keen to take on more.
And I do sympathise with firms that are simply trying to secure their own future with an innovative marketing exercise.
But if the claimant lobby is ever going to persuade the government and general public there is no compensation culture, it will have to ditch the inducements, ban or no ban.
John Hyde is a Gazette reporter
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