Alternative Business Structures Debate
Full Debate: Read Full DebateLord Marks of Henley-on-Thames
Main Page: Lord Marks of Henley-on-Thames (Liberal Democrat - Life peer)Department Debates - View all Lord Marks of Henley-on-Thames's debates with the Ministry of Justice
(11 years, 2 months ago)
Lords ChamberMy Lords, referral fees are viewed with a certain suspicion, particularly when, as in the case of motor insurance, they were rising to about £800 a pop. That obviously fed into the cost of the insurance. After the first look, it was decided that the greatest abuse took place in motor insurance, and so we concentrated on that area. However, we will consult the regulators and consumer groups to see whether our experience of the ban should be extended to other areas.
My Lords, the Solicitors Regulation Authority has approved licences for a number of alternative business structures, where claims management companies and even legal expenses insurers have joined forces with solicitors’ firms. In this way, solicitors effectively get personal injury cases in return for a commercial benefit—precisely what LASPO sought to avoid. Will the Minister make it clear to the SRA and the profession that if ABSs clearly undermine the referral fee ban, further legislation is an option?
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.