Alternative Business Structures

Lord Beecham Excerpts

Wednesday 19th June 2013 Lords Chamber

[Lord McNally]

My Lords, more than that, LASPO already allows us to extend the powers, if necessary. We therefore want to see the evidence that is emerging. If these groupings of separate facilities and companies seem to be using means to bypass the ban on referral fees, we will revisit our powers under LASPO. I understand the concern of the House on this matter.

[Lord Beecham]

My Lords, is the Minister aware that a solicitor whose practice is a major participant in referral schemes has recently been reported as saying that if a fee is paid for indirect referrals, whereby the client is merely given the name of the solicitor but has not received the name from the referring organisation, it would be outside the scope of the scheme? Is that a correct view?

[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.