Referral fee ban is “back on the government’s agenda”

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By Legal Futures

19 May 2011

Dismore: have to keep MPs focused

A ban on referral fees is back on the Ministry of Justice’s (MoJ) agenda, a government adviser revealed yesterday.

However, Mark Boleat, who created the claims management regulation regime, told the Claims Standards Council conference in Manchester that he believed the arguments against a ban are “compelling”.

While “sure [ministers] will have a look at banning referral fees”, he argued that they are “merely one form of marketing expense”, and will just go underground if banned.

The pressure is coming from concern among ministers over personal injury advertising, driven by the referral fee model, he said.

Justice minister Jonathan Djanogly has held a firm line that he is waiting for the Legal Services Board to finish its investigation into referral fees before taking a decision. The board published a discussion document last September and Legal Futures understands that it will shortly – possibly this month – issue its final conclusions and recommendations.

This is almost certain to pursue a policy of greater transparency when referral fees are paid, rather than of a ban.

Mr Boleat, an independent regulation and legal services consultant, also indicated that a proposal to ban referral fees would struggle to win approval from the regulatory policy committee (RPC), an independent body which scrutinises the quality of the analysis in impact assessments accompanying all new regulation proposed by the government.

The committee, of which Mr Boleat is a member, has to certify that a proposal is fit for purpose before it can be considered by the Cabinet’s reducing regulation sub-committee, chaired by business secretary Vince Cable.

Mr Boleat declined to comment on how the MoJ’s impact assessment on the Jackson reforms has been received. However, he said: “My guess is that the Jackson reforms will largely go through.”

The pressures this would bring to bear are likely to lead to the level of referral fees falling, he predicted.

In his address to the conference, former MP Andrew Dismore – who is co-ordinating the Access to Justice Action Group – said David Cameron will be making a major speech on justice issues next month.

Though the prime minister will focus primarily on criminal justice, it will also include civil, he said. It will be the precursor to a major piece of legislation that will encompass criminal, legal aid and the Jackson reforms.

Mr Dismore said a challenge for Jackson opponents was that MPs’ focus will more likely be on sentencing and legal aid when the bill goes through Parliament.

However, virtually every MP in England and Wales has now been targeted by the group’s e-mail campaign and meetings with a large number of them have resulted, delegates were told.

Mr Dismore said the government’s intention is that all of its civil justice reforms – including extending the road traffic claims portal, which is still going through consultation – will be introduced in the autumn of 2012, a timetable he branded “somewhat ambitious”.

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