24 May 2013

The Solicitors Regulation Authority (SRA) has issued a statement hoping to clarify it stance on the referral fee ban affecting firms carrying out personal injury work.

The ban, which came into force on 1 April as part of the Legal Aid Sentencing and Punishment of Offenders Act 2012, prohibits the payment of referrals in personal injury cases and was introduced amid concerns as to the high cost of civil litigation, rising insurance premiums, increasing numbers of claims and the perception of a “compensation culture”, where people are encouraged to claim for minor or even fictitious injuries.

Speaking at the Manchester Law Society Personal Injury Conference on Tuesday 21 May, Agnieszka Scott, SRA Director of Policy, reiterated the enforcement stance the Authority has taken.

She said that the SRA is:

“… actively engaging with all firms that want to remain compliant and we’d urge anyone with queries to get in touch to discuss their concerns. As we laid out in our enforcement strategy, while there’s no transitional period for the ban, we were never going to take a heavy-handed approach.

“We said we would show understanding to those firms that wanted to comply, and that’s the approach we are taking. We will be having less understanding conversations with those firms that show no willingness to comply.

“There is also a need for understanding our position too. We are fully committed to helping firms remain compliant and therefore engaging with them on adjustments to their business model.

“But by the same score, the Outcomes dealing with the referral fee ban carry no more or less weight than any other Outcomes in the Code of Conduct. Our approach to enforcement and compliance, including any sanctions in the light of proven wrong-doing, remain the same.”

Firms who want further information should go to the referral fee guidance on the SRA web site.