Claims Firms Incentives Ban

Claims Firms Incentives Ban.

Many of you will have received text messages, emails and telephone calls regarding claims and compensation not forgetting that day television advertising appears to overrun with compensation claims advertisements.

Some even offer unusual incentives such as cash back, computers and other ‘gifts’.

The Ministry of Justice (MOJ), the body that regulates claims management firms, has confirmed that it will pass laws by April next year effectively banning incentives to make claims.

The insurance industry, that picks up the ‘compensation tab’ is inundated with liability claims and accident claims, with Association of British Insurers suggesting that up to £50 per household could be the additional cost to our insurance policies to cover exaggerated and fraudulent claims.

The MOJ has also suggested that it will pass laws that if there is an element of dishonesty or indeed over stating a claim, then compensation could be banned altogether rather than what tends to happen now is the claim is adjusted to reduce the compensation payment.

Comment

Many people just do not get that we all pay for compensation claims, this can be via increased insurance premiums or in the case of financial advice negligence claims, good financial advisers paying higher levies and professional indemnity insurance premiums to pay for the bad. Ultimately, all these additional costs filter back to the consumer.

No one is against compensation if a person or firm has been negligent or caused injury or pain. The fact that certain claims firms actively hunt for whiplash work (they are quite literally known as ‘ambulance chasers’) and are creating a compensation and claims culture.

We quite literally call the UK ‘Litigation Britain’ and we welcome the MOJ’s move to tighten up the claims industry yet further and even ban claims in full, even only part were proved to be fraudulent.