Commenting on the announcement of a Government ban on referral
fees in personal injury litigation, Desmond Hudson Chief Executive
of the Law Society said:
'The Law Society is delighted that the government has listened
to the strong case it has been making for a ban of the payment of
referral fees in the field of personal injury litigation.
“The Society has been calling for just such a ban for two
years and it is pleased that the arguments it has made to Ministers
have finally been listened to.
“However, the Society remains concerned that the ban is
handled in a careful and considered way as the scope for unintended
consequences is very high. Many law firms have reluctantly had to
base their business models on the payment of referral fees as the
actions of insurers and claims management companies meant they were
forced to do so.
“The Government will need to ensure that enough time is
given for the market to adjust to the ban. The Society also
strongly rejects any attempt to reduce or ban legitimate marketing
of the services of law firms as the public have a clear right to
know what their rights are if they have been injured or wronged by
the negligence of others.
“We believe that the Ministry of Justice is therefore
right to consider carefully how to proceed, particularly in respect
of definitions.
“The Society is however disappointed that the ban will not
be extended more widely - for example into the area of
conveyancing. The Society believes this approach is short-sighted
and does not recognise the clear potential for consumer detriment
that exists in respect of one of the most important transactions
most people make in their lives.
“Consider this, I appoint an estate agent to sell my
house, I pay his fee, without my knowledge he sells my case to a
conveyancer. How is that in the interests of the consumer? The
Society has written to the Department of Business, Innovation and
Skills asking them to reconsider and will be pressing the
Government to include a general prohibition on referral fees
throughout the legal sector. Referral fees are not in the public
interest.'
Ends
Contact: Steve Rudaini, The Law Society
+44 (0)20 7316 5624