Tighter regulation of advertising for companies that offer compensation-claim services, a staple of daytime television in recent years, has moved a step closer, after the Compensation Bill cleared its second reading in the House of Commons.
Bridget Prentice, a junior minister at the Department for Constitutional Affairs, has said that the Government wants to stamp out “high-pressure marketing techniques” that encourage “frivolous claims, by raising false hopes about the compensation available”.
Claims-management companies have come in for criticism in the past for scaremongering and encoura- ging people to turn down initial compensation offers to pursue bigger claims.
Conservative MP for Clwyd West David Jones welcomed the proposed new laws. “Regulation of the activities of these so-called ‘claims farmers’ is long overdue,” he said. “We have seen their marketing campaigns. We have also seen their slogans, such as ‘Where there is blame, there is a claim’. Such advertising can frequently raise unrealistic expectations in the minds of vulnerable people.”
Advertising of “no win, no fee” services has risen sharply since legal aid was abolished for personal injury claims by the current Government in 1999.
The Government and the Advertising Standards Authority have recently funded research on the impact of claims advertising, and found that terms such as “no win, no fee” are often misinterpreted by the public.