Tag Results

Justice minister Lord McNally has called for a crackdown on claims management companies and said the government is sympathetic to a referral fee ban, as the Legal Aid, Sentencing and Punishment of Offenders Bill enters its committee stage tomorrow.

The Ministry of Justice seems in undue haste to push the Legal Aid, Sentencing and Punishment of Offenders Bill – snappily nicknamed LASPO – through the House of Commons. Having broken parliamentary convention by not allowing two weekends between presenting the bill to Parliament and the second reading last week, the government wanted it to start the committee stage today. However, after protests from the opposition, this will now begin next Tuesday.

The furore over referral fees has come out of nowhere. In the past three weeks, the Sunday Times, the Daily Mail, the Sunday Telegraph and, this week, The Times with the help of Jack Straw, have all climbed into the trade in claims. There has been an increasing focus on the role of insurance companies – referral fees’ most vehement critic – in actually fuelling them, which has certainly put the industry on the spot. The “if we don’t do it, everyone else will” argument put forward by the Association of British Insurers is not exactly an attractive one.

A potential new professional indemnity insurer has blamed the Solicitors Regulation Authority’s failure to tackle the market’s problems more quickly as the reason it will not be offering cover to law firms this year.

The government today dropped the idea of creaming off interest from solicitors’ client accounts to offset the cost of legal aid. The decision will come as a small consolation to legal aid law firms, which the Ministry of Justice impact assessment says will earn, along with barristers, £430m less from legal aid than they do now.