My Lords, this measure complements significant reforms that the Government have already introduced to control the costs of civil litigation. In particular, it is part of our focus on discouraging fraudulent and grossly exaggerated personal injury claims, as is Clause 45 on fundamentally dishonest claims. In all this work, our intention has been to allow appropriate personal injury claims to proceed at proportionate cost. However, we are determined to root out the disproportionately high costs and frankly unacceptable behaviour that has tainted the personal injury world in recent years.
These clauses address the practice of offering inducements to bring personal injury claims. There are many examples of lawyers offering potential clients money or items such as tablet computers for pursuing a personal injury claim. One recent advertisement read:
“If you bring a successful claim”—
to X Solicitors—
“you will be eligible for a free iPad. We believe in thanking those who entrust us with their claim, and as well as providing clients with a professional legal service, we hope a complimentary iPad can make things easier for you after your accident”.
Another stated:
“On acceptance of your case we will pay you £250 as an upfront ‘welcome’ payment. This payment is on top of your eventual compensation payment”.
Such incentives contribute to the so-called compensation culture by offering rewards for bringing a claim, regardless of its merits. Expenditure on these inducements might also have a detrimental effect on the quality of service provided to the client. Furthermore, in a significant number of cases, the client is then denied the money or benefit initially offered because of terms and conditions. This practice has no doubt developed because of the excessive legal costs in personal injury cases which have already been addressed by our reforms in Part 2 of the LASPO Act 2012, but it is a practice that we need to stop to protect consumers and, indeed, the reputation of the legal profession more widely. We are grateful for the cross-industry support for introducing a ban on the offer of such inducements; reputable lawyers recognise the harm that this does to their profession. The House of Commons Transport Committee has also recently endorsed a ban.
Consequently, these clauses prohibit legal services providers from offering monetary and non-monetary benefits to potential clients as an incentive to make a personal injury claim. They define what is considered to be an inducement and require regulators to monitor and enforce the ban, as breaches of the ban will not be considered as a criminal offence.
Amendment 87 amends the extent provisions in the Bill to make clear that those provisions apply only to England and Wales.
As to Amendment 64A, I thank my noble friend Lord Hunt of Wirral for bringing this issue to my attention. I know that he has a long-standing constructive interest in making sure that the Government get the drafting right on this kind of issue. I am extremely grateful for that. I will ask officials to consider the matter carefully during the Recess with a view to returning to it at a later stage.
Subject to that point, we believe that the new government clauses are a proportionate response to what has been a thoroughly bad practice. I beg to move.
Amendment 64A (to Amendment 64)