Legal Aid, Sentencing and Punishment of Offenders Bill

Bob Blackman Excerpts

Tuesday 1st November 2011 Commons Chamber

[Bob Blackman (Harrow East) (Con)]

I, fortunately, have not been the victim of a car crash or accident at work, although, judging from the volume of texts, e-mail messages and voice calls to my mobile and home phone one might believe that I was confined to a hospital bed or wheelchair. This is one of the aspects that have to be combated in legislation. I therefore support what the Government are doing in trying to prevent this type of activity, although I would like clarification from the Minister on three issues.

My hon. Friend the Member for East Hampshire (Damian Hinds) alluded to the first matter: the definition of “referral fee” and the potential for people to get around it. That is rather important, particularly given that it has been suggested that we make it a criminal offence. While the definition lacks clarity, it will be difficult to make it a criminal offence.

The second important issue is fairness for the individual. If a victim of an accident—for example, someone who has suffered a spinal injury—goes along to their high street solicitor for advice and help, the firm might decide to give that help and advice and start the case, but somewhere along the line it might determine that it does not have the expertise necessary and refer it to an expert solicitor who deals with nothing but such claims. How will the first solicitor be recompensed for their work, if they cannot claim a referral fee? I would like clarification on that point, because, quite clearly, that would require a great deal of professional work for which the solicitor might not receive any recompense. That needs to be clarified.

[Mr Straw]

Surely, the firm would get paid for the costs it had incurred. Indeed, it would not pass on the file until its costs had been paid. Does the hon. Gentleman accept that a further defect of referral fees is that they might skew the judgment of the first solicitor advising the client on the best firm to go to? The solicitor might make a decision on the basis not of which is the best firm, but of which is likely to pay the biggest referral fee.

[Bob Blackman]

The other problem is that if solicitors did not believe that they would get paid for the work, they might hang on to the case and take it to conclusion, despite not being an expert. That presents a huge risk to the individual, who possibly has a case.

[Mr Slaughter]

I agree entirely with my right hon. Friend the Member for Blackburn (Mr Straw). To put it slightly differently, the hon. Gentleman is quite right that firms might want to hang on to work even after it goes beyond their expertise, so an inducement to pass it on might work. I am not saying that in favour of referral fees, but it does happen, and we have to be aware of it.

He is absolutely right about the definition of referral fees. When the Minister announced, rather hastily, in response to my right hon. Friend, that the Government were banning them, he admitted that he could not define “referral fee”. The hon. Gentleman is absolutely right, therefore, that a number of problems still need to be resolved, but those are questions that he should be putting to his Front Bench team. He should be asking why they have not sorted out these matters, including on his point about text messages.

--- Later in debate ---

[Bob Blackman]

As I said, I hope to get clarity at the conclusion of the debate, because this is clearly a problem. I would like these illicit text messages and such like to be criminalised, because they are clearly an abuse of the law. Indeed, as my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) said, they should be criminalised already under the Data Protection Act, because they constitute an abuse of personal data.

I seek clarity on a third issue: the effect on claims management companies of banning referral fees. I sought advice from Accident Advice Helpline, which is based in my constituency. It informs me that only one in six of its 36,000 cases last year were referred to solicitors, with the rest being screened out. Of those, 70% led to a settlement, with 15% dropped owing to “no involvement”. I could go through all the details of the data, but the reality is that Accident Advice Helpline screens the cases, which costs money. If Accident Advice Helpline does not do that, other solicitors will have to do it, at a cost to themselves. I would therefore like some clarity on what the effect will be and how it is proposed that those companies will be funded so that they do not fall foul of the regulations.

[Kate Green]

I, too, am keen to ask the Minister some questions, similar to those put by the hon. Member for Harrow East (Bob Blackman).

I completely share other hon. Members’ concerns about securing much better protection for the consumer, but given that the amendments have been introduced rather hastily I hope that the Minister will assure us that there will be a level playing field for different business types and, in particular, that access to independent legal advice from independent solicitors will be protected for claimants.

I therefore seek a fuller explanation from the Minister of how it is intended that referral fees will be defined. Specifically, to what extent does he see marketing activity by solicitors and others as covered—or not covered—by the provisions? For example, as has already been suggested, if a high street solicitor takes on some work, but realises that he or she does not have the expertise to pursue the case and therefore refers it to another solicitor and arranges some form of fee sharing, how is it intended that this should be treated under the provisions? Some solicitors have grouped together to pool their marketing budgets. Is the intention of the Minister’s amendments to outlaw pooled marketing completely or to cover it in regulation? It would be useful to have some clarification on that.

I welcome what the Minister said in answer to my earlier intervention about alternative business structures, but I am curious to know what his assessment is of the possibility that more and more large claims management companies will seek to handle all such business in-house and will stop using the services of other legal firms or legal experts. Has he made any assessment of the possibility of the provision of such services being concentrated in a way that reduces consumer choice and independent advice, and will he say what steps he might take to address that?