Solicitors must not abandon their principles even if they are forming ventures with new entrants from outside the profession, the Solicitors Regulation Authority’s chief executive said today.

Antony Townsend (pictured) told the annual Association of Personal Injury Lawyers (APIL) conference that the sector was ‘complicated’ by recent moves by insurers into legal services.

Two of the UK’s biggest insurers, Ageas and Admiral, recently announced joint ventures with law firms as they tackle the ban on referral fees.

Townsend’s organisation is responsible for approving potential alternative business structures and he said there will be close scrutiny of such ventures.

‘There are a variety of players here and it’s not clear to consumers who is acting for whom,’ he told APIL delegates.

‘We are looking at the question of insurer ownership in ABS and the question of governance and potential conflict of interest. We need to be absolutely clear that ownership and governance and the independence of solicitors do not get muddled up. It is very important solicitors go back to their fundamental principles.’

Townsend said the question of morality and ethics remained important to legal education and training and would be a key part of the forthcoming Legal Education and Training Review – although he failed to give a date for when the delayed report will be released.

Meanwhile, APIL secretary Stuart Kightley, who runs the PI department of London firm Osbornes, said that forthcoming RTA Portal costs rules will significantly cut income even if solicitors take a success fee from their clients’ damages.

Kightley said firms face an overall 16% drop in income from work coming through the RTA Portal, even if they deduct 25% of their clients’ compensation. Fixed costs fall at the end of this month from £1,200 to £500 for lower-value claims.