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Firms criticise 'no foal, no fee' claims

BUSINESS organisation IBEC has criticised compensation case solicitors for operating a 'no foal, no fee' policy in a climate where fraudulent claims are costing business ?2bn a year.

Calling for tough action against spurious claims, IBEC social policy assistant director Tony Briscoe said fraudulent claims against businesses and private policyholders are often succeeding because of the 'no foal, no fee' basis on which solicitors are taking on cases.

Such a service resulted in a claimant "having nothing to lose, even where their claim is proven to be fraudulent," Mr Briscoe said. "This is the experience of many employers, and particularly abhorrent to the business community."

The cost of claims, including legal costs, was so ridiculously high that often the advice was to settle a dubious case and avoid the significant costs which would occur in fighting the case.

The fact that a personal injury claim could be made up to three years after an alleged incident created considerable difficulty in establishing the situation at the time of the alleged incident, particularly where circumstances involved a "contrived concoction of events".

There are now so many fraudulent claims that the basic premise of insurance cover - the premiums of the many will pay for the misfortunes of the few - is being substantially undermined, Mr Briscoe added.

Now IBEC is calling for:

* All personal injury claims to be supported by a written affidavit, and

* The law should require a judge to deprive the plaintiff of compensation where a claim or part of a claim is made in bad faith.

Employers and public would have to deal with and pay the cost of fraud until the necessary measures were introduced, the IBEC policy chief said.

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