SRA confirms ABS workaround for referral fee ban

Published: 19/11/2012

Joint ventures between solicitors and insurance companies or claims management companies as alternative business structures will not be caught by the forthcoming referral fee ban, the Solicitors Regulation Authority announced last week.

The SRA’S Executive Director for Policy, Richard Collins, confirmed the news at the Motor Accident Solicitors Society’s (MASS) annual conference, held in Manchester last Friday.

He told delegates that insurers or claims management companies which convert to ABS status and then handle the legal work would not breach the provisions of the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act 2012.

Mr Collins went on to admit there remained some uncertainty over the clarification surrounding referral fees; he said, deciding whether a payment is made for a referral, is the most difficult issue for the SRA.

Referral fees will be banned from April 2013 as the Government aims to reshape the personal injury industry and thwart fraudulent insurance and accident claims.

Content correct at time of publication