PERSONAL INJURY: Lord Chancellor makes plain dislike of 'financial traffic' in cases


The Lord Chancellor unexpectedly waded into the debate on referral fees last week, calling for a rapid end to the 'trafficking' of personal injury cases.



Speaking at the Law Society annual conference, Lord Falconer said he was 'keen to see as much pressure as possible to get rid' of referral fees, although he acknowledged it was a decision for the Law Society Regulation Board rather than the government. Briefing reporters, he added: 'I have a distaste for the financial traffic in personal injury litigation.'



Lord Falconer may find himself in conflict with the Office of Fair Trading, whose pressure in part led to the referral fee ban being lifted. A spokesman told the Gazette that so long as 'the solicitor's terms and conditions on referral fees are fair and open, then there should not be too much of a problem'.



Lord Falconer expressed his views in response to a question from Fraser Whitehead, a partner at trade union firm Russell Jones & Walker and chairman of the Law Society's dispute resolution section. Mr Whitehead claimed the reality of referral fees is that a 'very expensive trade' in legal cases has sprung up, which is largely controlled outside the profession and its regulation.



Mr Whitehead said referral fees increase the cost of cases to consumers and also lower quality because of the squeeze on profit margins. Lord Falconer said he agreed 'very strongly' with the sentiments.



Law Society chief executive Desmond Hudson said the time was right for the Regulation Board to review referral fees. 'There is a growing case that the apparent detriment caused to the profession and the public really does pose a question as to whether referral fees can continue,' he told delegates.



Last month, the board agreed to crack down on firms breaching the referral fee rules after a report from its practice standards unit uncovered widespread failures to comply. It also decided to review the underlying principles governing referral fees at its meeting in November.



Board chairman Peter Williamson, who was at the conference, said 'the Lord Chancellor's views will be noted', but refused to comment further ahead of the November meeting.

Neil Rose