legal experts question latest referral fee bill proposals
20 October 2011
Controversial amendments introduced by the Shadow Justice
Minister, Andy Slaughter, could threaten to seriously stall the
Legal Aid, Sentencing and Punishment of Offenders Bill according to
lawyers at insurance law firm Browne Jacobson.
Slaughter’s proposed amendments to the Legal Aid, Sentencing and
Punishment of Offenders (LASPO) Bill include:
- Criminalising referral fee arrangements, though only in
relation to road traffic claims
- A criminal offence of sending electronic communications or
making telephone calls to induce a person to make an injury
claim
- No damages for whiplash arising from road traffic accidents
with an impact speed less that 5 mph, unless the Claimant has a
particular susceptibility to injury.
- Additional regulation of cold calling and of claims management
companies by the Information Commissioner and Legal Services
Ombudsman.
The LASPO Bill is a significant part of the Government’s
strategy for the introduction of a number of the reforms proposed
by Lord Justice Jackson, in particular those relating to
recoverability of success fees and ATE.
James Arrowsmith, a lawyer at Browne Jacobson, commented:
“These are ambitious and controversial amendments which
raise serious evidential and enforcement issues. The timing is also
far from ideal, given reports today of the Labour Party's own
referral fee arrangements and donations from claims management
companies.
“The Law Society has already called for the Government to
‘pause’ progress of the legislation following reports of Justice
Minister Jonathan Djanogly’s links to claims management
companies.
“If a ban on referral fees short of a new criminal offence
is to be introduced then it makes sense to use this bill. This
could be achieved through powers delegated to the Secretary of
State which would allow the detail to be worked out in secondary
legislation or regulations.
“However, the last thing this important Bill needs is
complex eleventh hour changes that will not only increase calls to
put a hold on the bills progress, but could derail it
altogether.”