By: 17 June 2014

The Government’s decision to ban lawyers from offering inducements to potential claimants has been welcomed by large parts of the claims industry.

Justice Secretary Chris Grayling announced on 7 June that the Ministry of Justice would introduce new measures to reduce the number of false claims and bring down the cost of insurance premiums, including banning offers of common free enticements such as ipads or cash to clients.

The Government also wants courts to throw out applications in full where the claimant has been dishonest; improve whiplash medical assessments; and to introduce rules to restrict the practice of settling whiplash claims without proof of injury.

Claims Management Companies have been banned from offering such gifts since April 2013, but lawyers and insurers have been exempt from any such ban until now.

Russell Atkinson, CEO of National Accident Helpline, said that the Government’s crackdown on incentive marketing was “a step in the right direction” but “long overdue”.

“iPads have nothing to do with real injuries and should not be used to lure in injury victims, real or fake. Sector-leading companies are and should continue to be able to serve real injury victims without the need to bribe them to make a claim with gifts and incentives,” said Atkinson.

First4Lawyers’ head of marketing Andy McCullwick agreed, saying that it was good news that the Government had such practices in its sights.

“Such inducements have only served to harm the claims industry by encouraging people to make claims for the wrong reasons,” he said.

“Making a claim should be a fair and transparent process which allows a claimant to right a wrong and receive justice. Although First4Lawyers have never offered such inducements, CMCs were banned from doing so last year and so it is only fair that lawyers are on a level playing field.”

Anti-fraud firm, APU, however, said that the planned ban was part of a package of reforms that “could have gone several steps further”.

The accident investigation service provider said that the Government needed to provide a much firmer deterrent and to compel insurers, the police and other interested parties to collaborate in the fight against fraud.

“As well as a zero tolerance approach to the fraudsters themselves, there’s a desperate need for increased communication between public and private sectors, which is vital if the rise in motor fraud is to be stopped,” said Neil Thomas, director of investigative services at APU.