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The government needs to provide further clarity and guidance on how the ban on referral fees will operate in practice, the Solicitors Regulation Authority has warned. Issues such as the definition of a referral fee need to be resolved.

Some solicitors are putting barristers under “increasing pressure” to enter into referral fee arrangements, while others are trying to take “improper advantage” of advocates by abusing the ‘one case, one fee’ rules in criminal work, the Bar Council has complained.

The government has rejected a call by MPs to extend the proposed ban on referral fees beyond personal injury work – but a senior backbencher has predicted that it will have to return to the issue.

There is a “growing lobby” to stop claims management companies, solicitors and insurers from using alternative business structures to get around the ban on referral fees, it was claimed yesterday. Insurers were also asked to be honest about whether motor premiums will go down after the ban.

Introducing work to others is a common part of business life – just another cost that businesses incur in ‘selling’ their product. Law firms incur plenty of costs this way. So, asks Barbara Hamilton-Bruce, why is it different for claims management companies? Is their behaviour so abhorrent that the government should consider banning it?