Government ban on referral fees should be catalyst for further reform
September 9, 2011 at 9:00 AM
Leading personal injury lawyer urges further action on other shoddy practices to ensure access to justice.
Today's announcement by the Ministry of Justice (MoJ) of a plan to ban referral fee payments for personal injury claims marks a milestone in the battle to root out dysfunction across the industry, says leading Personal Injury solicitor John Spencer.
However, glaring questions regarding how and when a ban will be implemented – as well as the need for a clear and accepted definition of what actually constitutes a referral fee – still threaten to derail these efforts and must be addressed urgently.
Spencer has campaigned for years in support of a ban on referral fees, the controversial charges paid by solicitors to insurers, claims management companies and others for obtaining personal injury cases.
John Spencer said:
"For far too long have we been held hostage by a dysfunctional personal injury system, and today's announcement is an important and powerful first step in setting things right.
"I have long argued that referral fees represent the root cause of dysfunction, and create perverse commercial incentives which add no value to claimants and help to line the pockets of many market participants such as insurers and claims management companies.
"As to whether the implementation of today's ban will successfully achieve the goals of the reform, the devil is truly in the details. Any sliver of ambiguity on what constitutes a referral fee, whether by name or not, could be detrimental to these reforms. Absolute clarity must be pursued by the Government in codifying how and when a ban will be implemented in order to truly purge the marketplace of corruption and shoddy practices.
"Further, there is much more to be done to ensure the protection of consumers. Namely, we must now together tackle other questionable practices such as spam marketing by text and telephone, fraudulent claims and other critical pieces of the jigsaw puzzle. Without treating these critical ills as a whole, it will be nearly impossible for the system of justice for claimants to ever truly be healed."
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