Alternative Business Structures

Lord Faulks Excerpts

Wednesday 19th June 2013 Lords Chamber

[Lord McNally]

I do not think so. However, a lot of examples have sensibly been raised in the House today, some of them hearsay and some from direct experience, which suggest that what we intended to do in LASPO may not exactly be hitting the target, or that, as a result of organisational devices used by companies, the target has been moved. I can tell the House that we will talk to the regulators and look at some of these examples. If necessary, we will look at the powers that we were given under LASPO to make sure that we do what the House intended, which was to stop the practice of referral fees, particularly in the area of motor insurance.

[Lord Faulks]

My Lords, is the Minister regularly invited, as I am, to commit fraud, by which I mean that telephone calls are made by companies inviting one to sue for accidents that did not occur? Do the Government have any plans to deal with this, and are they aware that this is a frequent problem?

[Lord McNally]

I have not had direct experience of that particular problem, but within my family I have had direct experience of just how casually the law is treated in this area and how that has had a direct impact on the cost of motor insurance. Parliament tried to address part of this problem through the ban on referral fees, but there are many murky practices around this area and the House is right to raise these issues. I will return to the MoJ with the clear message ringing in my ears that we should poke a little further into these murky businesses.