04 Jul, 2011

Law Society urges government to take immediate action on referral fees

The Law Society has written to Lord Chancellor Ken Clarke urging him to ban referral fees. 

Law Society President Linda Lee (pictured) said referral fees are unethical, and may contribute to rising costs in the justice system.

“We urge the Lord Chancellor to listen to the Society’s long-held concerns about referral fees and take formal action to end them once and for all.

“Last week I met with Mr Clarke to raise our concerns and also met with Chris Grayling MP to discuss this in the context of Lord Young’s review of Health and Safety. 

“We are now formally asking the Government to step in and ban a practice that is ethically wrong, treats accident victims as commodities for sale and adds no value to the justice system.

Writing to Mr Clarke, Ms Lee said:

“We are, as you will be aware, deeply disappointed by the Legal Services Board’s decision in respect of referral fees. We believe in particular that the decision was based on superficial research and did not take into adequate account the very clear concerns that exist. 

“The Law Society supports the recommendation by Jackson LJ that the payment of referral fees should be prohibited, provided that this applies across the entire legal sector.

“It has been argued that referral fees are difficult to enforce and that they provide the money to advertise so that potential claimants are able to pursue claims.  We believe that both these views are misconceived.

Ms Lee said the Society notes that the views of the House of Commons Select Committee in its report on Complaints and Litigation echoes its concerns about claims handlers. 

“We are also pleased that the Association of British Insurers has taken a similar view and we believe that there will be major benefits to claimants and the insurance industry alike if insurers are not permitted to auction claims or sell them on to solicitors or other organisations.

“The Legal Aid, Sentencing and Punishment of Offenders Bill provides an immediate opportunity for government to take action on referral fees.”




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