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The government is to ban referral fees for personal injury work, it announced today. However, it has no plans to take action on referral fees paid to estate agents for conveyancing. The intention is for a regulatory offence, enforced by the relevant regulators

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 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.

There are “significant risks” for law firms offering gifts, entertainment and to pay for expenses as a result of the Bribery Act 2010, the Law Society has warned. While referral fees should not fall foul of the Act, solicitors need to be aware of whether their introducers are behaving in a way that might.

Put six lawyers in a room and you may well get nine different points of view on referral fees. But could the end be nigh for this fierce debate, which has split the profession asunder for many years? As the Legal Services Board recognised in its decision last week – and secretly probably hopes – the advent of alternative business structures could render the issue irrelevant.