Client data is sacrosanct. It shouldn’t be for sale

Like any busy solicitor, I receive a number of emails from all manner of people on a daily basis. Some of them are from clients who need help, while others are from the other side’s lawyers in a claim we’re handling. Still others fall in the networking category; some are even from old friends.

Fortunately, very few emails invite my firm to break the law. That, though, seems to be the effect of one particular email which a colleague received. I do not propose to identify the sender, and so I won’t even give an extract, but let’s just focus on one thing, for starters: the spelling! I am more forgiving than most of poor spelling. I have mild dyslexia, but in this instance it is indicative of a much deeper problem..

In fact this particular email – a round robin that many other law firms in the personal injury sector will have received – has more spelling mistakes than Fernando Torres has goals for Chelsea. In truth, the latter upsets me more. Torres is a great player but his inability to find the back of the net is a growing problem for my beloved Chelsea (although the less said about how the team threw away a 3-0 lead over Manchester United last weekend, the better).

Moving swiftly on... Perhaps its errant spelling is symbolic of how not all is right with this particular email. Certainly, if it were to be assessed for its linguistic elegance alone, it would come up wanting. But such things are small beer compared to what is really wrong with this email, which was sent by a large claims management company (CMC).

The email seeks to acquire personal injury claims which have stalled, for whatever reason, so that they can be placed with one of the CMC’s panel of solicitors. The incentive is a referral fee which, on the face of it, is far from insubstantial. In fact, it’s some £400 to £500 per case referred.

The problem with this is simple, and it’s to be found in the Data Protection Act 1998 (the DPA). The DPA contains eight data protection principles, which apply to anyone who processes personal data. Law firms and CMCs are governed by the Act, which, among other things, stipulates that data must be processed fairly and lawfully, in accordance with the data subject’s rights and for limited purposes. ‘Data controllers’ – again, for present purposes, law firms and CMCs – must be open and honest about how data is used, ensure that nothing unlawful happens with it, and handle it only in ways that are reasonably expected.

My question is this. Is it reasonable for a client of any law firm to expect that his or her data will be passed on to a CMC, in return for a referral fee? Bear in mind that ‘sensitive personal data’ has an additional level of protection under the Act; it would include matters of health, which, by definition, is what is in issue in a personal injury claim.

It seems to me that what this particular CMC is doing is soliciting a breach of the DPA. Of course, properly conducted law firms will baulk at the suggestion and refuse to play ball, but there are bad apples in every walk of life and some may be tempted. As such, this initiative goes to the heart of the malaise presently afflicting the personal injury sector.

Interestingly, however, harsher penalties are expected for data protection breaches following a review and new proposals by the European Commission. It is proposed that fines are to be linked to annual worldwide turnover of up to 2% (this could be a huge sum, depending on the size of the organisation), or may be as high as one million Euros for serious breaches. It is also proposed that the new law will apply to non-EU companies who market to or collect data about individual citizens based in the EU. Moreover, compulsory notification of data breaches is to be required: the Information Commissioner’s Office must be told of data breaches within 24 hours and the individuals affected without undue delay.

These and other proposed changes mean that data protection law may yet bite those who refuse to take it seriously.

Making headway in the labyrinth

Yesterday I appeared before the House of Commons Transport Committee, which sat to take oral evidence on the rising cost of motor insurance. Giving evidence with me were Paul Evans, the CEO of Axa, Andrew Dismore, of the Access to Justice Action Group, and a man who needs no introduction, the Rt Hon Jack Straw MP. I was representing the Motor Accident Solicitors Society (MASS), of which I am the vice chair.

This was the second time I’d attended a select committee meeting. In November 2010, I gave evidence before Louise Ellman MP, who is the chair of the Commons Transport Select Committee. Then, as now, I found that the experience of engaging with Parliament has its Kafkaesque moments.

As in the Czech novelist’s great novel, The Trial – which sees Joseph K search fruitlessly for justice, having been arrested for a reason that is never specified – the splendour of the surroundings is inescapable. The Palace of Westminster, where I gave evidence in 2010, is awe-inspiring, both in its sense of history and architecture. Portcullis House, where yesterday’s hearing took place, is rather less grand but still has an august flavour, perhaps because of its name: it is so called after the chained portcullis used to symbolise the Houses of Parliament on letterheads and official documents.

But for all the grandeur, the business of actually appearing to give evidence isn’t easy. Last year, it seemed as if I was asked to wait interminably outside an apparently limitless number of doors, rather than ushered directly to the Committee. It was only by dint of determination that I managed to find the room in the Palace of Westminster in which the Committee was sitting. This year, the venue was changed (from the Palace to Portcullis House) at the last minute – but no one thought to tell me. It’s almost as if because everyone within Parliament knows the drill, they forget to tell the rest of us.

Jack Straw, indeed, is a man who knows Parliament like the back of his hand. Perhaps this gave him the confidence to breeze into the hearing a few minutes after it had started; certainly, I was in the midst of introducing myself when he arrived.

Attending a hearing in the company of a heavy hitter such as Jack Straw means that one has to be determined to be heard. Here, my previous Select Committee experience stood me in good stead. I felt that I made MASS’s point: that unless the Government tackles systemic failings within the personal injury industry, a ban on referral fees alone may do more harm than good.

Moreover, albeit that I have long campaigned for a ban on referral fees, I have also consistently said that implementing the ban needs to be handled with great care. Accordingly, a key component of any ban will be adequately defining what a referral fee is, and consequently what it covers. For example, will the Government include ancillary services which are also involved in personal injury claims, such as car-hire companies, in the ban? There are also a myriad of questions over advertising standards and data protection, with unsolicited texts, cold calls and adverts which encourage litigation, being used to the detriment of the public and the injured party alike. We also need answers as to what the advent of Alternative Business Structures will do to the personal injury system. Could a claims management company (CMC) or insurer take over a law firm? Market rumour is indicating that a vast majority of CMCs have expressed interest in doing just that when the time comes.

All these issues, not to mention the practice by which insurers intercept claimants before they have access to independent legal advice, need to be addressed. If they’re not properly looked at, the culture of profiteering in the personal injury sector will continue unabated – and accident victims will be no more likely to obtain justice than Joseph K.

SMS spam is unwelcome and needs to be eradicated

Free Msg: Our records indicate that you may be entitled to £3750 for the accident you had. To apply free reply CLAIM to this message. To opt out text STOP

Far too many of us have received this text message, or something like it. It’s no more and no less than SMS spam, and it’s another example of the endemic dysfunction in personal injury (PI) claims. Let me explain.

Unsolicited text messages promising £3,750 – for some reason, the amount is almost always £3,750 – are sent because of the cavalier disregard for personal data by those who stand to gain by treating PI claims as a commodity. Often enough, these text messages are sent to consumers regardless of whether they’ve actually been in an accident. In fact, recent research from the Direct Marketing Association found that 43 percent of consumers reported receiving such messages.

That statistic strikes me as extraordinary, but to add insult to injury it is often the case the mobile phone users pay for the dubious privilege of receiving a spam text message. On top of that, there is usually a charge to send a text in reply saying ‘STOP’, and yet worse sending ‘STOP’ is unlikely to have the desired effect anyway – the spammers know they’ve got a real person, and so continue with their unwelcome barrage.

It is often difficult to determine exactly who has sent the message, and it is even more difficult to ascertain just how one’s personal data has come to the spammers’ attention. Granted, sometimes SMS spam is sent to mobile phone numbers which are randomly generated by software programmes, but on other occasions it appears on your phone because someone, somewhere, has sold your personal details without your consent.

The practice is abhorrent: SMS spam is being sent because claims management companies, lawyers with questionable motives and a myriad of other organisations which have no regard for the rights or welfare of the public are trying to drum up business. They amount to another shoddy practice in an industry which is in desperate need of reform.

At the same time, then, as it tackles referral fees in PI claims, the government should act to end the unauthorised sale of personal information. SMS spam is unethical and contributes to the rise of our unfortunate ‘compensation culture’. The government should act immediately to toughen its enforcement with steep penalties for non-compliance, but meantime, please read the guidelines below on how to deal with SMS spam from the Direct Marketing Association and endorsed by the Motor Accident Solicitors Society.