Spam text message investigation 3

Spam texts: the law on 'nuisance' text messages

Senior figures in the legal profession believe the only way to stamp out the use of cold calling and spam text messaging to generate claims leads is to ban law firms from paying referral fees.

Since 2004 the number of motoring-related accident claims has almost doubled from 400,000 a year to 790,000 Photo: ALAMY

By Jason Lewis, Investigations Editor

9:56PM BST 25 Jun 2011

Until 2004 such fees were illegal and since they were introduced the country has seen, for example, the number of motoring-related accident claims almost double from 400,000 a year to 790,000.

Earlier this year Appeal Court judge Lord Justice Jackson carried out a review of the costs of litigation for the Ministry of Justice. He said referral fees have driven up costs and brought no benefit, and should be banned in personal injury cases and possibly other areas too.

Solicitor John Spencer, whose own firm pays referral fees, backs a total ban on the commission payments. As vice-chairman of the Motor Accident Solicitors’ Society and a senior member of the Association of Personal Injury Lawyers he takes a more hard-line approach than many colleagues, who only want better enforcement of the rules restricting law firms’ marketing and banning cold calling.

“Banning referral fees would choke off the financial incentive for 'claims farmers’ and the others involved in this sordid business from sending out these unsolicited texts.

“The idea that you can buy and sell access to justice in this way is abhorrent,” he added.