Dáil Éireann Debate, Tuesday - 19 June 2018
272. Deputy Maurice Quinlivan asked the Minister for Justice and Equality his plans to bring forward legislation to regulate claims management companies; and if he will make a statement on the matter. [26933/18]
Amharc ar fhreagraI am replying to this matter as raised by the Deputy in the understanding that the intended reference is to companies, whether legal firms or not, which specialise in assisting claimants to bring forward and process claims, whether in relation to insurance, personal injury, medical negligence or other areas of litigation. This is, of course, an issue which has been the subject of particular debate in relation to the insurance sector where so-called “claims harvesting” companies have been in operation and may be considered to have an undesirable impact on the levels of litigation and costs in that sector.
If the Deputy’s specific concerns are about those companies or firms which specialise in managing or harvesting insurance claims, their regulation will be a matter for appropriate consideration in the context of insurance regulation under the policy aegis of the Minister for Finance and the Central Bank. For my part, therefore, I would have no specific plans to bring forward legislation to regulate claims management companies in that context at this time.
As the Deputy may be aware, this is an issue which has been considered in the context of the ongoing work of the Cost of Insurance Working Group, chaired by Minister of State for Financial Services and Insurance Michael D'Arcy TD, which is undertaking a review of the factors which are influencing the increased cost of insurance, and brings together all the relevant Departments and Offices involved including my own Department.
As part of that work, the Working Group sought the views of the Law Society on the matter of claims harvesting and those preventative measures contained in the Solicitors Acts which are of relevance. In the first instance, section 62 of the Solicitors Act 1954 prohibits solicitors from rewarding or agreeing to reward unqualified persons for the introduction of legal business and provides that any such agreement is void. The Law Society informed the Working Group of its continued proactive approach to breaches of section 62 and has published an updated practice note on claims referrals and section 62 in June 2017 by way of ensuring that the solicitors’ profession is fully informed. The Law Society has also directly notified claims referral companies found to be targeting solicitors about the statutory prohibition on solicitors paying referral fees.
Section 5 of the Solicitors (Amendment) Act 2002 also generally prohibits unqualified persons from advertising a service of a legal nature that could otherwise be provided by a solicitor for a fee or reward. This includes advertising in relation to personal injuries claims in the context of claims harvesting websites. The Law Society has informed the Working Group that 14 claims harvesting websites have been taken down as a result of the Law Society’s investigations since 2014. The Law Society has also instituted High Court proceedings against non-solicitors relating to two leading claims harvesting websites one of which resulted in a High Court order directing its permanent closure. The Working Group’s Report on the Cost of Employer and Public Liability Insurance, which was published in January 2018 and is available on the website of the Department of Finance, refers.
In so far, therefore, as claims management companies are seeking to directly or indirectly engage solicitors in their claims work, the Solicitors Acts 1954 to 2015 are being used as a bulwark against “claims harvesting” and the relevant regulatory and disciplinary provisions under the Acts are being applied rigorously by the Law Society. Under the Legal Services Regulation Act 2015, these are matters which I expect will be taken up by the Legal Services Regulatory Authority in the ongoing roll-out of its functions including of the new public complaints framework and of the new Legal Practitioners’ Disciplinary Tribunal which are scheduled to take place early in 2019. Along with my Department I will, of course, continue to support the work of the Cost of Insurance Working Group including, as appropriate, in relation to those specific matters which have been raised by the Deputy.
