Personal injury firms are to be banned from offering up-front incentives as part of a pre-election set of reforms from the Ministry of Justice.

While there has been no formal announcement, press reports this morning suggested that the government is preparing several measures aimed at reducing insurance fraud.

As well as a ban on incentives such as cash or laptops, courts will also be given new powers to refuse compensation for claimants who have been dishonest.

The reports say the government is confident it can legislate for the changes before the end of the current parliament in May 2015.

The issue of incentives has divided the legal profession in recent months, with some firms insisting incentives do not encourage fraud, but groups such as the Motor Accident Solicitors Society suggesting they damage the reputation of the profession as a whole.

But there has been little evidence produced to link up-front incentives with fraud or exaggerated injuries. And firms involved in this marketing say the up-front payment can help to supplement lost earnings, while a free computer can help claimants’ get their lives back together.

Hilary Meredith Solicitors, which represents injured service personnel, said: ‘Our seriously or catastrophically injured clients who have iPads can, by accessing features like Facetime or Skype keep in contact with us, with family and with friends.

‘They tell us that the iPad has made a huge difference to their lives and is great value as a rehabilitation tool and when used with the right “apps” has many other practical uses. It allows them to perform tasks that they may otherwise be unable to do or increases the ease and safety with which they can perform these tasks.’

Otto Thoresen, director general of the Association of British Insurers, welcomed the ban on what he described as ‘distasteful advertising’.

‘This only serves to reinforce to unscrupulous claimants that there is a compensation culture to exploit,' he added.

James Maxey, managing director of Manchester firm Express Solicitors, told the BBC the ban would not achieve any reduction in fraudulent cases. ‘This is not the big issue. I don’t think it will change anything,’ he said.