On referral fees ban

According to BBC  The government is to ban referral fees in personal injury claims in an attempt to curb the “compensation culture”.

This is a topic close to my heart as despite my tutor’s advice ‘don’t work for dodgy lawyers’ I very briefly was an intern at one of those ‘personal injury firms’.

One of the things I was helping with was finding Russian-speaking clients so I was coming up to people and saying something very similar to: ‘if your friend, colleague or family member had an accident, you can earn 200 pounds for referring him/her to us’.

Response was very interesting. Some people, rightly, looked down on me. They said that if something was to happen to their loved one, calling people like me would be the last thing they would want to do.

But some were very excited with the opportunity of earning extra cash. So we signed lots of people up.

I left that firm after three days because I hated the concept and didn’t want to be one of those ‘ambulance-chasers’.

When I first saw this news on BBC, I was delighted – I really don’t like this system. However, not long after, my liberal instincts kicked in. I am against banning anything unless it harms others. The rise of insurance prices and annoying text messages trying to sign people up don’t constitute sufficient harm as far as I am concerned.

Also some people actually have series accidents and injuries (caused by asbestos for example) and those personal injury firms with their referral system raised awareness of those health risks and helped a lot of people.  Maybe that is enough of justification for their aggressive marketing and sending out troops of annoying people like I was for three days.

I would welcome a discussion and will wholeheartedly support the ban if I was presented with a case on how this system can seriously harm anyone.

But for now: there you go: this is just another example of things that should not be banned just because we don’t like it.

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One Response to “On referral fees ban”

  1. Meeee Says:

    I don’t think to apply Mill’s harm principle is particularly powerful in this argument as the firms are not doing direct “harm”. However, there is an interesting question to regulated markets as these are obviously driving up the price of insurance so how do you regulate that without stifling what is a legitimate practice (for instance you don’t need an ambulance chaser to sue for personal injury if you have been hurt due to someone else’s fault). However how far you restrict advertisements is a matter of free speech, the point about not selling personal injury details onward is probably an effective and moral remedy to deal with the situation, its not as if people nowadays are not broadly familiar with the idea of personal accident, no win no fee lawyers. This would mean that such an idea is a conscious decision to sue, I agree that information on an individual’s rights to sue under these circumstances should be available to everyone but aggressive marketing all but talks them into it. In this case perhaps the government has got this one right, as it balances the problem and also if you think about it, protects the privacy of accident victims which is an important point not disclosed in the story.

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