Thursday, 13 June 2019

Questions (61)

Michael McGrath


61. Deputy Michael McGrath asked the Minister for Finance his plans to regulate so-called claims harvesting websites; the number of such sites active in the Irish market; and if he will make a statement on the matter. [24773/19]

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Written answers (Question to Finance)

At the outset, it is important to note that while as Minister for Finance, I am responsible for the development of the legal framework governing financial regulation, my Department does not have a role in the regulation of claims harvesting websites in Ireland nor in the collection of data on the number of these websites.  Allegations of companies engaging in such practices were brought up during the Cost of Insurance Working Group’s consultation process, as well as through representations and Parliamentary Questions submitted to my Department. 

My Department has considered this issue and consulted with relevant stakeholders such as the Department of Justice and Equality as well as the Law Society of Ireland.  From these consultations, I am informed that claims-harvesting websites can hold themselves out as solicitor firms and purport to provide legal services.  The websites frequently refer to claims for personal injury and, in doing so, attempt to solicit and encourage site visitors into making claims for compensation.  Information received from site visitors with an interest in making such claims is then offered for sale to solicitors on an anonymous panel for the solicitors to contact the claimants directly.  As far as the referral of claims to solicitors within these types of websites may be concerned, it is my understanding that there are already stringent rules in place, most notably under the following legislation:

- the current Solicitors Advertising Regulations which replaced earlier 2002 regulations and were introduced on 1 June 2019.  These new Regulations retain restrictions specific on the advertising of legal services in respect of personal injury claims.  The prohibitions on non-solicitors advertising services of a legal nature that may induce persons to make claims for damages for personal injuries, together with the prohibitions on unqualified persons from either acting as a solicitor or pretending to be a solicitor, remain unchanged and will continue to be enforced by the Law Society, and

- section 62 of the Solicitors Act 1954 prohibits solicitors from rewarding or agreeing to reward unqualified persons for the introduction of legal business, i.e., payment of a referral fee.

The Law Society has informed my Department that, within the terms of its functions under the Solicitors’ Acts, it actively pursues claims harvesting websites.  From its various consultations, the Department has been advised that the number of active ‘claims harvesting’ websites operating in Ireland has drastically reduced in recent years from approximately 60 in 2016 to around 11 more recently, although this figure can fluctuate.  The Law Society states that unfortunately, the process of identifying the owners of the websites is often frustrated by the sophisticated ways in which the website owners conceal their identity.  For example, it would appear that many of the websites which are operating in Ireland may not actually be located within the jurisdiction nor within other EU countries.  I understand that this factor increases the levels of complexity of investigations, as it can be particularly difficult to establish who the owners of the relevant websites are.  Notwithstanding these challenges, my Department has been informed by the Law Society that 23 websites that have been removed from the internet since 2014 and since last year, a further three websites have been removed from the internet, with another two websites identified as belonging to a company that has gone into liquidation. 

With the application of section 218 of the Legal Services Regulation Act 2015, solicitor advertising will no longer be regulated by the legal professional bodies as happens at present.  Instead, the Legal Services Regulatory Authority will maintain the restrictions of any advertisement which, in the opinion of the Authority, “expressly or impliedly solicits, encourages or offers any inducement to any person or group or class of persons to make claims for personal injuries or seek legal services in connection with such claims.”  The Authority will be undertaking consultations for the making of regulations for the advertising of legal services by legal practitioners, whether solicitors or barristers, under section 218 of the Legal Services Regulation Act 2015.  It is my understanding that the new advertising regulations are planned to come into operation in Quarter 1 of 2020.

In light of the above, it is clear that the regulation of claims harvesting websites is a complex matter but that the existing solicitor regulations have helped prevent such websites to evolve to become a more prevalent feature of the Irish personal injuries environment, in the way that they are in the UK, for example.  I am satisfied that the relevant professional bodies are pursuing such websites to the extent that they can in light of the challenges that exist.  Notwithstanding this, my officials will continue to monitor the prevalence or otherwise of this issue.  In addition, I would suggest that if anyone is of the view that particular solicitor firms are using such claim harvesting websites, they should report the matter to the Law Society/ Legal Services Regulatory Authority for investigation.