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Clarity needed before referral fees ban implemented, says SRA

Regulators and other interested parties must work together to ensure the Government's proposed ban on referral fees in personal injury cases will operate consistently and effectively in the public interest, says Solicitors Regulation Authority (SRA) Chief Executive Antony Townsend.

Mr Townsend was speaking today (31 January) at a roundtable event, organised by the SRA, to discuss how the legislation could best be implemented. Representatives from Government, regulators, claims management companies, insurers and solicitor firms attended the session in London.

Delegates spent two hours considering the issues raised by the ban, which regulators will be required to enforce if the Legal Aid, Sentencing and Punishment of Offenders Bill receives Royal Assent in the spring. The Government announced yesterday a ban would take effect from April 2013.

Mr Townsend told participants: "There are clear challenges associated with carrying out the Government's proposal on referral fees. We are not here to debate the rights and wrongs of the ban. Our aim today, and in the future, is to work towards adopting a workable and consistent approach to implementing it."

Key issues highlighted in feedback, following group discussions, included the need for further clarity and guidance on how the ban will operate in practice, including the definition of referral fees and enforcement policy, timescales for introduction and further analysis of the potential impact the ban may have on the market.

Deborah Evans, Chief Executive of the Association of Personal Injury Lawyers (APIL), said: "Care must be taken to ensure that working arrangements under a ban are practical and do not put the consumer at risk through overly speedy implementation. Firms need clarity on what they can and can't do and sufficient time to change their business arrangements."

The SRA will brief the Ministry of Justice on the issues raised at the forum, which was held at the Double Tree hotel, in Westminster. These issues will also be included in an SRA discussion paper detailing how regulation of the ban may be taken forward.

This will be published in the spring, once the Bill receives final parliamentary approval.

Organisations represented at today's event were:

  • Ministry of Justice
  • HM Treasury
  • Office of Fair Trading (OFT)
  • Legal Services Board
  • Financial Services Authority
  • Bar Standards Board (BSB)
  • The Law Society
  • Association of Personal Injury Lawyers (APIL)
  • Association of British Insurers (ABI)
  • Claims Standards Council (and Accident Advice Helpline)
  • Motor Accident Solicitors' Society (MASS)
  • Association of Regulated Claims Management Companies
  • National Accident Helpline
  • AXA Insurance
  • Amelans/InjuryLawyers4U
  • Spencers Solicitors
  • Minster Law Solicitors
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