A Conservative government would not enforce a blanket ban on personal injury referral fees, shadow justice minister Henry Bellingham told the Gazette this week.

The remarks appear to signal a softening in Tory policy, and go against one of Lord Justice Jackson’s key proposals in his report on civil litigation costs.

Bellingham said that there is ‘nothing dishonourable’ about some solicitors receiving such fees and that lawmakers must be ‘very careful’ about removing a mechanism brought about by market forces. He said a Tory government would consult with the profession on all of Jackson’s recommendations, about which he said ‘some are good news, but others aren’t workable’.

Bellingham expressed concern over another of Jackson’s key proposals, to prevent successful claimants recovering success fees and after-the-event (ATE) insurance premiums from defendants. He said he was also concerned about Jackson’s proposal to implement one-way costs shifting, whereby a claimant does not have to pay a defendant’s costs if the claimant loses.

Bellingham said of referral fees: ‘In a capitalist society, is it right to say we should get rid of a mechanism that the market has put in place? We have to be very careful about making changes.

‘I am quite aware of the damage they can do, but I think they are more a symptom than a cause. If we can start controlling costs in other ways and prevent some cases going to court, then we start to solve the problem.

‘The National Accident Helpline is [an example of] a consortium of solicitors that have got together to share the costs of advertising and marketing, and they work for one another. There is nothing dishonourable in receiving referral fees for that. But ambulance chasers clamouring for easy fees are another consideration.’

Bellingham said that if success fees and ATE insurance premiums were non-recoverable, ‘people might find that solicitors won’t take their case’. He said that one-way costs-shifting could encourage unnecessary litigation, but supported Jackson’s recommendation for improved costs budgeting and a more active role for judges in costs management.

In November last year, Bellingham told delegates at the Motor Accident Solicitors Society’s annual conference that shadow justice secretary Dominic Grieve was ‘very anti-referral fees’.

Bellingham said at the time: ‘I’m probably slightly less violently anti-referral fees but I think there is a very strong case for getting rid of them.’

The Legal Services Board’s consumer panel is currently consulting on referral fees and will report to the LSB board in May. The LSB has commissioned management consultancy Charles Rivers Associates to carry out an economic impact assessment of referral fees.