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    ACTION ON PERSONAL INJURY COMPENSATION CULTURE

    Government proposes to outlaw cash inducements to pursue injury claim

    The Ministry of Justice intends to address Lord Young’s concerns that the current regulatory system still provides for the encouragement of suspect personal injury claims.

    It is now proposed to prohibit the offering of cash payments or similar benefits as an inducement for making a claim by amending Client Specific Rule 6(b) of the Conduct of Authorised Persons Rules 2007. This is a direct response to Lord Young’s wider calls for change to the restrictions on the advertising and conduct of claims management businesses.

    Lord Young stated in his report;

    “Today accident victims are given the impression that they may be entitled to handsome rewards just for making a claim regardless of any personal responsibility – adding to a real sense that we live in an increasingly litigious society.

    Many adverts entice potential claimants with promises of an instant cheque as a non-returnable bonus once their claim is accepted – a high pressure inducement to bring a claim if ever there was one.”

    Such companies then proceed to auction any claim that appears well founded to the solicitor who will pay the most. Quite apart from encouraging litigation in circumstances when it might not otherwise occur.”.

    The proposals are to be implemented in April 2011 and are currently open to consultation.

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