A small number of legal firms are responsible for a huge number of personal injuries actions, the Law Society has been warned.
There are fears that an unusually high number of spurious claims are clustered around a small number of towns, where certain legal firms are based.
The fear is that these firms are “harvesting” claims, which is against the rules.
Barristers and solicitors face stringent advertising regulations aimed at preventing claims harvesting, which is sometimes called ambulance-chasing.
Minister of State at the Department of Finance Eoghan Murphy has sought the help of the Law Society in a bid to clamp down on spurious claims.
The Law Society has the dual role of being the representative body for solicitors and their regulator.
The issue arose after a series of meetings Mr Murphy held with business groups.
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Businesses claim a disproportionate number of claims are coming from a small number of legal firms. Some towns have more claims than others, the minister has been told by business groups.
Claims costs meant some SMEs are now self-insuring and handling their own claims. “Businesses feel they are targets for claims. We need the help of the Law Society, which can police it,” said Mr Murphy.
“Some solicitors are too willing to take cases without looking at the merits of the claim.
“Solicitors in certain firms in a small number of towns have a reputation for being too willing to believe their client. I am asking the Law Society how it might deal with this.”
Fraudulent claims are given as a reason by insurers for the huge spikes in the cost of motor insurance in the past three years. It is estimated the cost of fraud to all insurance companies is €200m.
It comes as the Law Society insisted it was clamping down on claims-harvesting websites and lawyers breaking its rules on advertising.
Its director general Ken Murphy confirmed the minister had an informal discussion on claims that a small number of legal firms are responsible for a huge number of personal injuries actions.
“One of the matters discussed was the extravagant allegations made by insurance companies about the level of fraud they face but the abject failure of the same insurers, other than in a tiny number of cases, to challenge these supposedly fraudulent claimants in court and to seek their prosecution,” he said.
The society has no knowledge of how many claims any firm of solicitors takes on behalf of their clients, he added.
“If any firm of solicitors attracts a large volume of cases or transactions of a particular kind it is likely to be because of satisfied clients, who testify to the firm’s special expertise in the area of legal practice in question,” he said.
He insisted the Law Society is stringent against rules being flouted.
Last year, the society admitted up to 20 solicitors suspected of bulk-buying personal injuries actions from claims-harvesting websites were under investigation by it.
“Since 2014, 13 claims-harvesting websites have been taken down as a result of the society’s investigations,” he said.
Solicitors connected with such sites face a range of sanctions, including reprimands and a formal direction that all future advertising is approved by the society for a period of three years.
Referrals have also been made to the Solicitors Disciplinary Tribunal on the grounds of professional misconduct.