The Ministry of Justice's intention to ban the payment of referral fees in personal injury cases should be welcomed by anyone who has been involved in an accident and has a genuine claim to make, says Philippa Luscombe, head of the personal injury team at Penningtons Solicitors LLP.
"Do not be tempted by recorded telephone calls enticing you to make a claim. The best thing for anyone involved in an accident is to cut out the middleman - whose only interest in you is as an opportunity to make money - and to contact a personal injury specialist solicitor directly who will be best placed to advise and help you.
"Organisations such as the Association of Personal Injury Lawyers (APIL) and the Law Society should be your starting point. APIL represents specialist solicitors and can provide full details of reputable personal injury solicitors nationwide while the Law Society has a specialist panel for personal injury solicitors with stringent requirements for membership and will provide details of individuals within a claimant's local area."
The issue of referral fees has been an area of much debate and the legal profession welcomes the announcement to ban them. A major problem in the personal injury industry has been the use of aggressive sales techniques by claims management companies to persuade members of the public to make a claim which they subsequently sell onto solicitors for a referral fee. In some cases, potential claimants are even paid a fee for bringing a claim.
Most specialist personal injury solicitors would probably agree that the concept of claimants instructing solicitors based upon who pays the highest fees for the work is an uncomfortable one. This practice has been permitted over the last few years and the advertising spend of claims management companies now far outstrips that of any individual firm of solicitors. They have increasingly dominated the market while reputable specialist solicitors cannot and do not want to compete with them.
Specialist solicitors have long been concerned that these set ups simply result in claimants being passed to the organisation which will pay the most for their claim, rather than the one that offers the best service. Many feel these companies are not acting in the best interests of many genuine injured parties and encourage unmeritorious claims. As a result, the payment of these fees ultimately serves to drive up the cost of personal injury claims as well as increased insurance premiums for everyone.
A major issue is the passing on of private details, often without the individuals' consent, by insurers, vehicle recovery groups, garages and others who become involved in the process in the aftermath of many accidents, particularly road traffic accidents. This results in cold calling, texts and emails to individuals involved in accidents, often from companies wishing to refer a potential case on for a fee.
Desmond Hudson, chief executive of the Law Society, said: ''The Law Society is delighted that the Government has listened to the strong case it has been making for a ban of the payment of referral fees in the field of personal injury litigation. The Society has been calling for just such a ban for two years and it is pleased that the arguments it has made to Ministers have finally been listened to.
"However, the Society remains concerned that the ban is handled in a careful and considered way as the scope for unintended consequences is very high and the Government will need to ensure that enough time is given for the market to adjust to the ban."
The Law Society also strongly rejects any attempt to reduce or ban legitimate marketing of the services of law firms as the public have a clear right to know what their rights are if they have been injured or wronged by the negligence of others. Many law firms feel there is a clear distinction to be made between the claims management companies and the firms of solicitors which are part of a specialist industry marketing themselves as providers of good quality, transparent legal services with specialist expertise.
Says Philippa Luscombe: "Unfortunately, the man in the street who may have been involved in an accident may not appreciate that the claims management companies view potential claimants as simply an opportunity to make money. They are not remotely interested in the outcome of their claim, only in the fee they will earn by referring on their case. Genuine personal injury claims must be dealt with by qualified, experienced solicitors and not by unqualified, inexperienced staff, many of them working within businesses controlled or at least partially funded by insurers."