Bodies policing the referral fee ban have made only a small number of prosecutions in almost five years, new figures have revealed. Both the Claims Management Regulator, run by the Ministry of Justice, and the Solicitors Regulation Authority confirmed to the Gazette that charges relating to breaches of the ban are in single figures – or even zero – every year.
The regulators are responsible for enforcing the ban on paying or receiving referral fees for personal injury cases, introduced in April 2013 through the Legal Aid, Sentencing and Punishment of Offenders Act.
The figures suggest solicitors and claims management companies have had few problems in complying with the law, despite no shortage of investigations into their activities.
Responding to a Gazette freedom of information request, the SRA confirmed it had taken action against solicitors in relation to the ban on five or fewer occasions each year since 2014. The exact number was not disclosed because of concerns that this could lead to the identification of individuals, the SRA said.
The number of referral fee prosecutions rose last week when Manchester sole practitioner Andrew Clinch admitted making unlawful payments (in addition to other rule breaches) and was suspended for 30 months.
Since the ban was introduced, 185 cases have been investigated by the SRA in total, with the number falling each year since 2014.
The regulator says it takes any reports of potential breaches of the ban seriously.
The MoJ confirmed its Claims Management Regulation Unit has visited 1,384 CMCs since the ban. Around 100 have been found to be operating in breach of the ban, with 22 warnings issued specifically for breaches. But no fines have been issued and the regulator has removed the authorisation of just one CMC over a breach since 2013, the response confirmed.
An MoJ spokesperson said: ‘The ban on referral fees in personal injury cases is an important part of our drive to tackle the compensation culture.
‘While we are pleased the ban is being respected, the Claims Management Regulation Unit continues to work with the SRA to monitor compliance and will not hesitate to act in the event of breaches.’