In COLP and COFA News, Industry Insights, Industry Insights, Jon's Blog

The SRA’s decision not to ban Personal Injury inducements and incentives has put the cat amongst the pigeons, hasn’t it?  And now APIL’s Chief Executive, Deborah Evans, has waded in on the debate landing on the same side as the defendants.  Mark it in your calendar!

So where do you stand on this issue – are inducements wholly inappropriate, or is it time for the regulators to let lawyers get on with business? More importantly, to what degree should the COLP be involved?

“It’s an outrage!” – Anon, Gazette

Those professing incredulity at the decision say that the practice of offering cash incentives and the like is grubby and unbecoming.  The MoJ has banned CMCs from doing the same, so surely the SRA should follow suit?  It does appear inconsistent, and dare I say, slightly unfair on the poor old CMCs.

Solicitors are a profession, and some say that these ‘tacky’ adverts are not in keeping with the image that the profession should strive collectively to protect.  Think trusted advisor, fearless litigator, heart of the community, rather than shouty salesman.

Some would even say that an inducement is akin to a bribe.  (It’s not, by the way – there’s nothing improper about choosing a solicitor based on the freebies, any more than it is improper to book a holiday because kids go free).

I think the SRA got this one right

No, please don’t throw things.

If they had announced a ban the SRA would be accused of over-regulating, hammering the final nail into the small PI firms’ coffin and so on.  We are after all in a difficult post-LASPO environment.  The work has to come from somewhere, and it’s not coming from paying for cases any more (well, that’s the theory anyway).  Like them or not, incentives are a legitimate marketing tool and the public are comfortable with them.

I for one would like to think that the regulator will let firms do business as they see fit, so long as there is no breach of the rules.

And that’s the crux of it, really.  As a profession, with all the ethical responsibility that the position imposes, solicitors should be trusted enough to decide whether something falls on the wrong side of the line.

Which is where the COLP comes in.  You must (a) put yourself in a position of oversight of marketing activities, and (b) ask yourself:

  • Is this marketing in any way misleading?  Much of the argument seems to have been focused on incentives which are rarely – if ever – paid out, e.g. because liability is not admitted early on.  If very few clients are getting their hands on a shiny new iPad, it starts sounding a bit like a con and the advert may well offend Outcome 8.1.  Check the wording.  Are any exclusions clearly explained in a legible font?  Are those exclusions repeated in the initial interview?  No?  Dodgy ground.
  • Does it diminish the trust the public places in you and in the provision of legal services?  “Claim a new PS4 to play whilst you count your compo cash!…Everyone else is doing it, why don’t you make a whiplash claim and grab £500 up-front?”  If these are the sorts of messages your adverts are sending, perhaps it’s worth re-thinking the marketing strategy.
  • Are we remaining consistent with the Principles?  These are the catch-all pillars of legal practice.  Remember that you must:

Act with integrity

Not allow your independence to be compromised

Act in the best interests of each client

Provide a proper standard of service to each client

The future

It’s wrong to say that the SRA have given the “green light” to paying inducements.  What they have said is that it is up to firms to decide whether it is an appropriate form of marketing, which is totally in keeping with the spirit of OFR.  And there is nothing to say that they won’t introduce a ban if the evidence points to firms flouting the rules.

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