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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.

Slaughters 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 Governments 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 Partys 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 Djanoglys 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."

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Lakhbir Rakar

Lakhbir Rakar

PR Manager