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BAN LEAVES UNANSWERED QUESTIONS

The lobby against referral fees shifted up a gear and then took an early stage victory last Friday when Justice Minister Jonathan Djanogly announced a ban on referral fees. Understandably this got tongues wagging a bit so read on for how things panned out…

Anyone looking for the scoop on the referral fees ban would have had to stay up late.

At one thirty in the morning on 8th Sept, Axa Insurance's David Williams hinted with this tweetwhat would be coming over the next working day.

Jonathan Djanogly awoke listeners that morning to Radio 4's Today Programme with an interview which referred to 'countering the sick culture' and the Justice Minister did his best to imply there hadn't been any change in his tune despite indicating months ago that an outright ban was unlikely.

However it has become clear the MOJ's announcement had something of the political and rather less of the practical about it, a fact which Neil Rose pointed out in his blog on Legal Futures. Of particular note was a fact admitted in the Ministry's own press release:

                "Please note that there is no universally recognised definition of 'referral fees'…"

It is important to put this story into context. The ban announcement came at the culmination of an entire week's news devoted to the topic and one during which some heavyweight lobbyists got behind the campaign.

On Monday 5th September, insurers compared their hymn sheets with some of the UK's largest employers and decided to sing from the same one. Major names including Asda and Whitbread joined the Association of British Insurers' call for a ban under the imposing title of 'The Consortium for Compensation Reform'.

The CCR - a group comprising The Association of British Insurers and other companies including Asda, Lloyd's of London, Argos and Whitbread - came out to attack the no win no fee system and commanded coverage in 18 publications such as here in London's financial freebie City AM, and went on to seize the news agenda in the next day's broadsheets and (where would we be without it) the Daily Mail.

Dissenting opinion remained confined to the pages of the legal magazines and other trade press with the Law Society Gazette reporting how, led by the Access to Justice Action Group, solicitors hit out at suggestions that claimants would receive more compensation if they avoid dealing with a lawyer.  

Post Magazine's Claims Club included on its agenda a debate about referral fees at which Darren Werth, chairman of the Claims Standards Council gave his opinion. To read Darren's speech, click here.