A senior figure at the Ministry of Justice has indicated the government may look again at a possible ban on inducements for personal injury claims.
Robert Wright, head of civil litigation funding and costs for the MoJ, said the department retained ‘concerns’ over solicitors using incentive advertising to bring in work.
The MoJ has already banned claims management companies, which it regulates, from offering inducements, but the SRA opposes a ban for solicitors as there is no evidence the practice harms the consumer.
Speaking at a conference of the Association of British Insurers today, Wright said he himself had recently seen a billboard offering ‘a mobile phone, gold coin or laptop’ in return for claims. The ad said terms and conditions applied, but these could not be found on the firm’s website.
‘There should not be the encouragement for claims we have seen in the past,’ he said.
‘The government has banned this practice for CMCs and is concerned about it happening more widely.’
Wright added that the government has a ‘different view’ to the SRA and will look at various models for restricting the practice – from self-regulation to a ban along the lines of the referral fee ban.
The issue of inducements has divided the claimant community, with individual firms defending their right to use with legitimate marketing ideas to bring in work.
But some representative groups have suggested the existence of cash or gift offers helps to spread the perception of a compensation culture.
In his address to the ABI, Wright added the Ministry of Justice is ‘committed’ to keeping the small claims limit under review and ‘supportive’ of extending the scope of fixed recoverable costs.
Last year the government opted not to increase the small claims limit from £1,000 to £5,000, but did extend fixed costs to all RTA, employer and public liability claims valued up to £25,000.
But Wright said ‘limited time’ existed to substantial further reform during the current parliament, with attention instead devoted to reducing the cost and scale of whiplash claims.