The Irish Law Society is to curb “no win no fee” advertising in the Republic of Ireland.
Under regulations to be introduced shortly, future advertisements will be required to explain to clients that they could be liable for costs and expenses awarded against them by the courts if they lose.
The advertisements will also have to make it clear that clients who lose may have to pay costs – such as the bills for medical examinations necessary for a damages claim.
“No win no fee” advertising by solicitors – which occupies around 10 pages of the space bought by law firms in the current issue of the Dublin Golden Pages telephone directory – has been criticised by representatives of the insurance industry and by the Irish Business and Employers' Confederation. Both have claimed that such advertising amounts to touting for business and has contributed to what they describe as a “compensation culture” in which clients are encouraged to pursue their claims, whether or not they are justified.
The new regulations will replace advertising regulations issued by the Law Society in 1988. According to the society's director general, Ken Murphy, they are designed to ensure that members of the public are not misled by “no win no fee” advertising, so as “to ensure that clients are not subsequently taken by surprise in the event of losing a case”.
He added: “The client must know what the potential down side is and the Law Society is keen to see that no one is misled, albeit indirectly, by such claims in advertising.”
He expected that the new regulations would come into effect by the middle of next month.
Murphy defended “no win no fee” on the grounds that it gave access to justice to people who would otherwise be denied it because of the absence of legal aid in civil cases in the Irish Republic.
He cited a recent report into insurance costs in the Irish Republic, prepared by Deloitte & Touche, which found no direct evidence that the “no win no fee” system increased the number of liability claims.
However, the report did suggest that such advertisements could be misleading as they did not indicate the costs which could be involved if the plaintiff lost.
Meanwhile, an Irish Government minister has called the decision to allow advertising by the profession “a grave mistake”. Equality and law reform minister Mervyn Taylor, who is a solicitor, admitted that he did not think it was now possible to reverse the decision.
But he added: “It may be possible to control advertising. Such a move could come from the Minister for Justice.”