The head of the Solicitors Regulation Authority has cast doubt on whether more can be done to tighten the ban on referral fees – despite misgivings about how firms have approached it.
Under the Legal Aid, Sentencing and Punishment of Offenders Act, personal injury firms have been banned from paying referral fees since 2013 but some firms continue to flout the spirit – if not the letter – of the law.
The SRA fined a solicitor £2,000 last December in one of the first public rebukes for breaching the ban, but prosecutions have been rare.
SRA chief executive Paul Philip (pictured) told MPs yesterday that a small minority of the legal profession is ‘doing stuff they ought not to do’.
Giving evidence at the House of Commons justice committee session on legal services regulation, Philip said: ‘The fact is that claims management companies essentially engage in a variety of activities, so of which is legitimate, some of which is definitely not legitimate in terms of advertising and harvesting legitimate claims.
‘The extent to which they do that tastefully or indeed ethically from time to time is questionable. We certainly have a few such solicitor firms in our disciplinary processes at the moment.’
Questioned by Conservative MP Alex Chalk on whether stricter measures might be possible, Philip said the SRA was ‘not too sure’ what more could be done.
‘It is quite difficult because people get round it,’ he said. While cold-calling ’is most definitely unacceptable’ he asked what more could be done.
’Actually it is lawful for solicitors at this point in time to engage in that type of behaviour to a point and those are the types of cases we are looking at in our disciplinary work at the moment.’