The Solicitors Regulation Authority (SRA) confirmed last week that there are a significant number of businesses within the personal injury sector who are acting in breach of the referral fee ban since its inception on 1st April.
Chief Executive Antony Townsend, who announced his intention to leave the post recently, sent out a warning at the Legal Futures Conference earlier this month and stressed the SRA‘s concerns that the market’s operation should be balanced against the preservation of the professional principles which included putting clients first.
Discussing the problem he warned: “We do have an enforcement strategy. The fact we haven’t yet had any cases going to the Solicitors Disciplinary Tribunal doesn’t mean that there won’t be any.”
He also informed the conference that a number of arrangements had been investigated since the referral fee ban was implemented but the SRA had interacted in ‘constructive engagement’ with law firms to help firms become compliant quicker without the need to name and shame.
The referral fee ban was brought in as part of the Jackson reforms on the 1st April 2013 and states that solicitors and legal practices can no longer pay claims management companies and other business sources for the referral of claims in an attempt to bring down the number of exaggerated or frivolous claims within the industry.