We live in strange times when it appears to be a cultural norm that people are encouraged to go to Law by cash inducements.

If you have suffered because a negligent driver smashed your car, the Law has a highly developed structure to enable you to recover your losses. So why do you need additional cash? Why do you need a win bonus to top-up your losses?

Sadly, this puts me in mind of the Pakistan cricketers who were banned recently by the ICC (I realise appeals are pending). I have watched the ebbs and flows of Pakistan cricket for decades – from the perfect batting of Majid Khan to the (then) new reverse swing of Waqar, on to their recent inconsistent occasional brilliance, including losing to Australia in the twenty20 semi-final in 2010 then crushing Australia at Headingley.

I find it hard to understand why these three cricketers needed more than the adulation they already experienced. But clearly, I HAVE misunderstood. They WERE tempted by cash-inducements. Now they have paid the real price – as per the Guardian story here – http://www.guardian.co.uk/sport/2011/feb/06/pakistan-cricket-bettting-scandal-test-match

What has this to do with the Law on the streets of Bedfordshire?

The Ministry of Justice (MoJ) is at this moment engaged in a consultation on this very issue – cash inducements. Should cash-for-crash be prohibited?

This is, of course, about Claims Management Companies (CMCs). With my oft stated views on CMCs it may well be assumed that I would support this proposal. However, I don’t. For this change to have any real effect there must be other major changes.

At the moment, for a CMC to be allowed to carry on business dealing with personal injury (and other claims) they require authorisation by the MoJ. Obtaining authorisation means filling in a form and paying a fee. Nothing more. It’s not a difficult form. And the fee is not high. Once the CMC is authorised it claims the benefit of the MoJ badge – authorised by the Government! That sounds reassuring. I wish it was how it sounds.

Once authorised, the CMC is subject to various regulations including the Conduct of Authorised Persons Rules 2007. This is a 9 page document. The first 3 pages barely count (title page, index page, and definitions page) – so in terms of substance, we are talking about 6 pages of rules – 6 pages full of headings and spaces. In short, it is short! And such rules as there are, are, in my experience, largely honoured in their breach.

And! – there is already rule 6(b) which says: CMC’s must “Not offer an immediate cash payment or similar benefit as an inducement for making a claim.”

The proposed change is to remove the words “an immediate”. In place of these two words, is one word – “any”.

Hence, the proposed new rule says: a CMC must “Not offer ANY cash payment or similar benefit as an inducement to making a claim.”

Of course the Law is all about words, their subtle use and meaning. But, will this change of two words bring about the revolution that is needed to straighten out businesses that depend almost entirely on cash inducements?

Draw your own conclusions.

Article posted on Friday, February, 11th, 2011 at 11:21 am

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