The Government has recently announced proposals for further changes to the legal system in relation to businesses which directly encourage potential claimants to bring a personal injury claim by offering a cash payment. The company then either deals with the claim itself or has separate financial arrangements with another entity to whom it passes the claims.
The Ministry of Justice (MoJ) proposes to ban incentives such as technological gadgets and upfront cash payments for new clients in a crackdown on fraudulent claims. These cash incentives are believed to encourage people to put forward claims where there is either no real merit or injury. There are also concerns that these inducements may be encouraging the ‘cash for crash’ scams.
Clients who have been genuinely injured as a result of someone else’s negligence should be encouraged to pursue a claim through a reputable firm of solicitors in order to get realistic advice about the merits of any claim and the best possible outcome of any claim that may then brought. Many potential personal injury claimants do not always realise that the cost of these incentives will effectively be deducted from their compensation at the end. Alternatively, these incentives may result in claims being rushed through for quick settlement and recovery of costs running the risks of an under settlement for the claimant. TV and radio advertising can be particularly misleading and any such incentives are always subject to stringent terms and conditions which many clients will not meet or may later find disadvantageous.
Philippa Luscombe, partner in the personal injury team at Penningtons Manches LLP, said: ‘Thee proposed changes and the ban on incentives for new clients are to be welcomed. Offering new clients cash incentives merely encourages them to claim even if there is no justifiable case to pursue. This reflects badly on the industry as a whole. Genuinely injured clients should always seek advice from firms who have the specialist expertise to deal with their particular claim rather than being misled by incentives. Taking these incentives away will mean clients will be better represented by the appropriate representative in future cases and that only genuine injury claims are brought.”