114. Deputy Michael McGrath asked the Minister for Justice and Equality 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. [24774/19]
Minister for Justice and Equality (Deputy Charles Flanagan): The issue of claims harvesting, whereby people involved in accidents are pursued by on-line and other entities for commercial gain and encouraged or induced to lodge insurance injury claims, is one which is increasingly complex to govern. Spurred on by advances in business technology and electronic media, those who operate harvesting entities in contravention of the law come from a variety of countries, backgrounds and disciplines that are proving prohibitive in terms of cost and scope to corral under a single regulator.
Even in internet governance terms, these operators can literally change identity overnight when challenged, as they continue to be in this and other jurisdictions, and can operate outside the scope of national or EU law while also seeking to exploit several markets at once. These are the very substantial challenges that remain to finding a cost-effective regulatory response at either national or international level to claims harvesting operations, including as considered by the Cost of Insurance Working Group.
As far as those aspects of claims harvesting which fall within the remit of my own Department may be concerned, the key regulatory focus continues to be on the interface between claims harvesters and those solicitors with whom they would wish to engage in a mercenary manner to the detriment of our insurance regime. This is being applied diligently by the Law Society which continues to take a strict approach against any offending solicitors or claims harvesters in this area as appropriate to the Society's role as the regulator of solicitors under the Solicitors' Acts.
This approach, which has proven highly effective, has a number of key legislative components. Section 5 of the Solicitors (Amendment) Act 2002 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 such advertising in relation to personal injuries claims in the context of claims harvesting websites. Moreover, 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. Under the Solicitors Advertising Regulations as recently updated by the Law Society with my consent under S.I. No. 229 of 2019, it remains the case that an advertisement intended to publicise or otherwise promote a solicitor in relation to the solicitor's practice shall be in such a form as shall not expressly or impliedly solicit, encourage or offer any inducement to any person or group or class of persons to make claims for damages for personal injuries or to contact the solicitor concerned with a view to such claims being made.
From the active engagement by the Law Society and the on-going work of the Cost of Insurance Working Group, I understand 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 in more recent times. It is also understood from the Law Society that 23 websites have been removed from the internet on foot of its efforts since 2014 with further such removals possible. The Society has previously issued relevant practice directions and directly notified claims referral companies found to be targeting solicitors about the statutory prohibition on solicitors paying referral fees. It has also successfully pursued these matters before the High Court and is, therefore, to be commended for the diligent and effective discharge of its particular regulatory functions in response to this threat to our insurance regime.
This strict approach is set to continue under the new advertising provisions of section 218 of the Legal Services Regulation Act 2015. Under that section, such advertising will no longer be regulated by the legal professional bodies as happens at present but by the Legal Services Regulatory Authority. Specifically, section 218(d)(vi) of the 2015 Act allows for the restriction 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 carrying out the required public consultations in preparation for the new legal services advertising regulations coming into operation in Q1 of 2020.
In so far, therefore, as claims harvesting operations are seeking to directly or indirectly engage solicitors in their claims work, the Solicitors Acts 1954 to 2015 are operating as a bulwark against them with recognised effect. Such a regulatory approach will continue under the Legal Services Regulation Act 2015. While, in broader terms, the issue of claims harvesting does not seem at this time to lend itself to an immediately amenable regulatory solution, I will, along with my Department, continue to support the on-going work of the Cost of Insurance Working Group and of the Law Society in this regard.