The Solicitors Regulation Authority has commissioned 10 forensic investigations into personal injury firms to check their compliance with the referral fee ban, it will announce this week.
SRA chief executive Antony Townsend (pictured) will tell Wednesday’s board meeting that the regulator is stepping up efforts to police the ban, which came into effect in April.
In his report, published today ahead of the meeting, Townsend said 900 firms that relied on personal injury work for at least 50% of their income were contacted in September and October to remind them of their need to comply with legislation.
The SRA has since been in further contact with 45 firms and visited 25 in person to assess how they are approaching the changes and to decide whether they are complying with the ban.
Townsend said visits have continued throughout this month, with the sample including a range of size and type of firms covering a range of PI referral schemes.
He added: ‘The focus of our engagement with firms has been on how firms obtain new personal injury work and what information and advice is given to clients about any referral arrangements.’
The SRA has previously admitted enforcement of the ban is lower down the list of priorities than dealing with the financial stability of firms.
But the authority has been keen to emphasise it will take appropriate action if necessary. This could include revocation of authorisation to practise for the most non-compliant offenders. The first enforcement action is likely to come in 2014.
It has also warned of the dangers of firms focusing too much on complying with the ban and ignoring other elements of the solicitors’ code of conduct.
In the six months following April it found evidence of firms agreeing with a third party to deduct money from clients’ damages, inappropriate outsourcing of work and a lack of transparency about new arrangements.