Barristers who outsource work must not “ask for or accept” any payment from third parties, the Bar Council has warned. However, third parties can “for commercial reasons” offer services to barristers at lower than normal rates, so long as the “entire benefit” is passed to lay clients.
Criminal barristers who agree to work for law firms “for no fee” could be breaching the referral fee ban, the Bar Council has warned. The Bar Council said law firms were “wrong to suggest no fee is available” where counsel was “unassigned”.
The turnover of personal injury claims management companies (CMCs) bounced back 27% to £310m last year as the market began to “stabilise”, it has emerged. Applications by personal injury CMCs for authorisation from the Ministry of Justice also increased by almost two-thirds.
Removing the ban on referral fees in criminal cases could lead to “arrest chasing” by solicitors, the Bar Council has warned, and result in “as much public opprobrium” as ambulance chasing. However, the Bar Council backed third-party accounts for solicitors.
The Law Society has launched a sustained attack on plans by the Solicitors Regulation Authority to introduce third-party accounts, allow referral fees in legal aid cases and remove the requirement on firms to carry out reserved activities.
Only one solicitor has been sent to the Solicitors Disciplinary Tribunal for breaching the ban on referral fees in personal injury cases, it has emerged. Meawhile, the head of claims management regulation said the “biggest CMCs are making more and more money”.
Only 5% of solicitors would be interested in transferring their client accounts to a third party, a survey of firms in the south east has suggested. The SRA is consulting on whether to allow the move.
Justice secretary Chris Grayling has promised criminal law barristers that the government will “take measures” to strengthen the Legal Aid Agency’s ban on solicitors demanding referral fees.
Smaller claims management companies (CMCs) have been hit hardest by market changes such as the ban on referral fees, it has emerged.
The Claims Management Regulator has warned over 65 claims management companies about their compliance with the referral fee ban in the first three months of this year, it has emerged.