Personal injury solicitors have urged the Solicitors Regulation Authority (SRA) to rethink its “unacceptable” refusal to ban inducements to claim.
It comes as actuaries have warned that “claims farming is on the increase”.
Last week the SRA controversially announced that it would not be following the Claims Management Regulator in banning inducement advertising, saying there was no evidence that it has any “adverse effect” on clients.
Both the Association of Personal Injury Lawyers (APIL) and Motor Accident Solicitors Society (MASS) have come out strongly against the decision.
An APIL spokeswoman said: “An injured person should not be distracted from choosing the best solicitor by a cash inducement or gift from another who may not be best qualified to deal with his case. We’re extremely disappointed that the Solicitors Regulation Authority did not feel it necessary to take a firm hand on inducements.
“The fact that a higher standard is already imposed on claims management companies but not on solicitors is simply unacceptable.”
For MASS, chairman Craig Budsworth said: “It should be increasingly obvious that offering cash upfront or a free gift like an iPad to attract claimants will not help in the battle against fraud.
“If we are going to clean the system of fraud and reduce motor insurance premiums, this practice must end. Combating the ‘have-a-go’ culture must be a top priority and banning enticements to claim will help reassure consumers that claims are not to be encouraged.”
Mr Budsworth said the Claims Management Regulator’s decision to introduce a ban was a “really positive step forward”, adding: “If we are serious about this issue, the ban should be extended across the entire sector covering both solicitors and insurers – everyone must be held to the same high standard. This dubious practice is partly responsible for bringing our industry into disrepute and must cease.”
A Law Society spokeswoman said: “The society does not have a formal policy on prohibiting inducements but recognises the concerns. The SRA’s guidance is helpful on many points but we strongly question whether its list of factors that solicitors should consider has any basis in law or the code and we are taking this up with the SRA.”
The report from the Institute and Faculty of Advocates recorded a 5% increase in the number of accidents involving bodily injury. One of the authors, David Brown, said: “The data we have collected for the last four years clearly shows a decrease in the number of accidents and you would expect that to correspond with a decrease in the number of injuries claims; instead we have seen an increase in injury claims.
“This could mean that people are driving less safely. However, police data shows that the number of motor accidents involving casualties has decreased. The other conclusion that you can draw is that claims farming is on the increase.”
Meanwhile, answering questions in Parliament yesterday, justice minister Helen Grant argued that “a compensation culture was allowed to develop under the last government”, but added that “we fully expect the industry to pass on the considerable savings that it will make to the public in the form of reduced insurance premiums” as a result of the recent civil justice reforms.
She did, however, reject a suggestion that the limitation period for whiplash claims be reduced.
She also revealed that the transport select committee’s report on whiplash is expected before the summer recess; the government has said it will wait for that report before publishing its response to the whiplash consultation which proposed raising the small claims limit for claims to £5,000 and introducing independent medical panels.