Created: 01 November 2011
Supporting the Government’s efforts to tackle cold-calls from companies dealing with injury claims, Bob asked for clarification on a number of issues.
Firstly, Bob asked for a clear and comprehensive definition of the term ‘referral fee’, this is especially important if there are any moves to make it a criminal offence
The second important issue is fairness for the individual. If a victim of an accident has their case opened by one solicitor who then concludes that it is necessary to refer this case to an expert solicitor, it is important to ascertain how the first solicitor is to be recompensed for their work if they cannot claim a referral fee.
Lastly, Bob sought clarity on a third issue: the effect on claims management companies of banning referral fees. The Accident Advice Helpline, based in Harrow East 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”. 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. Bob therefore called for 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.