T m , moty updt – Oto 20111
NewsSolicitors’ referral fees to bebanned
Justice Minister Jonathan Djanogly hasannounced that the government will banreferral fees paid by solicitors in Englandand Wales for new personal injury cases. The ban will probably be enacted by anamendment to the
Legal Aid, Sentencing and Punishment of Offenders Bill
(LASPO) which carries the main provisionsof Lord Justice Jackson’s reforms
(see July 2011 Brief)
and which is currently atthe parliamentary committee stage. A Private Members Bill introduced by Jack Straw, which would also ban referral fees,but only in motor cases, received its firstreading in Parliament on 13 September. Itis unlikely to progress, however, as beingonly a Private Members Bill it will probablynot be given sufficient parliamentary time.
Comment: referral fees have received a good deal of recent media attention.They have been blamed for encouraging a “compensation culture” and for pushingup the number of claims and consequently the cost of insurance premiums (especially for motor insurance) in England and Wales.Ironically, the announcement of the bancomes only a few months after the Legal Services Board decided that an outright ban was unnecessary because Lord Justice Jackson’s reforms would meanthat solicitors would be much less able to afford to pay substantial referral fees.