The Michigan legislature recently passed and the governor signed a new law that will help get rid of the rampant and repugnant “ambulance chasing” that has increased in Michigan over the past several years.
PA 218 states that for the first 30 days after a motor vehicle accident report is filed with a law enforcement agency, a person or organization is prohibited from “using the report for any direct solicitation of an individuals, vehicle owner, or property owner listed in the report.”
This new law seeks to curb and outright eliminate this form of ambulance chasing. For the first 30 days after an accident, attorneys, “non-profit organizations”, doctors, chiropractors and any other non-qualified individual cannot directly call or solicit a car accident victim.
Although ambulance chasing has been a problem in the profession of personal injury law in the past, it was often sporadic and usually involved minor motor vehicle accidents. However, with increases in information technology and services that publish police reports online – sometimes the same day as the accident itself – ambulance chasing has increased both in its scope and the type of accident victims involved.
For example, our law office routinely hears complaints from new clients who are inundated with phone calls and direct solicitations from attorneys or so-called “non-profit” services hired by attorneys promising them the sun, moon and starts as a result of their car accident. Many of these “runners” and “cappers” – as they are referred to in the industry – get paid for each client they sign up on behalf of an unscrupulous attorney or doctor’s office.
The way the system works is pretty simple. Following a car accident, the car accident victim is contacted directly either by an attorney or on behalf of an attorney or doctor’s office. The victim is referred to a chiropractor or some other medical provider for treatment. Often this medical treatment for the car accident is often not needed. From there, the individual is then referred to a designated law firm for representation, often for legal services that are also not needed.
Recently, I had a client who was told over the phone she could receive $50,000 for a cash settlement and $7,000 in cash per year for 3 years. This person made these promises despite not knowing anything about the car accident, including my client’s injuries and the amount of insurance involved. It was a despicable phone call. These types of promises were already illegal, but now with the new regulation there are some actual teeth in combating this nonsense.
The penalties for breaking this law are severe. For the first violation, the crime is a misdemeanor punishable by a fine up to $30,000. A second violation is a misdemeanor punishable by up to 1 year in prison and a $60,000 fine.
I applaud the state legislature for taking this problem head on. Although I am uncertain how this law will actually be enforced – it looks like attorneys will have to take the bull by the horns and report violations directly to various prosecutor offices – this law was well overdue and will help protect our state’s strong Michigan no-fault law.
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