We?re still on course for referral fee ban, says SRA
PUBLISHED January 9, 2013
Wednesday 09 January 2013 by John Hyde
The Solicitors Regulation Authority will not ask for a delay to the imminent ban on referral fees, despite warnings that the timetable is being rushed.
The SRA board will meet on 23 January to finalise the SRA Handbook's wording on the ban, which comes into force for personal injury claims at the start of April.
The Law Society has already criticised the Ministry of Justice for forcing through reforms before firms have had the chance to adjust. It has also described as 'disturbing' the idea of a soft-touch approach to policing the ban in its early months.
A spokesman for the SRA told the Gazette that the regulator had always accepted that the deadline for the ban is 'tight' but that it is still working towards the 1 April timetable.
He added: 'There may have been discussions between the Law Society and the MoJ about delaying implementing the ban, but the SRA has not been part of these discussions and has not asked for any delay in the implementation date.'
In its response to the SRA consultation, the Society last month expressed concern that the SRA and Claims Management Regulator would treat the first few months as a 'transition'. '[This means], we suspect, that they will turn a blind eye to non-compliance. This is not satisfactory.'
The Gazette understands that the SRA plans some flexibility for firms that are in the process of amending their business models, but rejects the idea it will turn a 'blind eye' to deliberate rule-breaking.
In its response submitted last month, the Law Society called for more clarity on what the referral fee ban will mean in practice.
The Society said firms that currently pay referral fees for personal injury work would have to find alternative ways of marketing and that the SRA's paper failed to define what was permissible.
'Most advertising will involve an element of payment by results and it may therefore be difficult to ascertain precisely where the boundary is crossed,' it said.
Once the SRA board has met later this month, changes to the regulatory framework should be ratified by the Legal Services Board in mid-February. A final version of the revised handbook is due by early March.