Personal injury: Referral fees – LASPO - SRA warning
On 11 October 2013, the SRA issued a Warning Notice to all practitioners who have referral arrangements for personal injury work. It reminds practitioners of the need, when entering into such arrangements, to consider not only whether they may be in breach of the ban in the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO), but whether they are able to comply with their regulatory obligations, in particular the SRA Principles and the Outcomes in the SRA Code of Conduct 2011 ("the Code").
Whilst this notice does not form part of the SRA Handbook, the SRA may have regard to it when exercising its regulatory functions.
The SRA is concerned that in setting up arrangements in a way that does not breach LASPO, firms are failing to consider their wider duties to their clients and others, and in doing so may be breaching the SRA Principles or failing to achieve the Outcomes. Examples include:
- agreeing with an introducer to deduct money from clients' damages;
- inappropriate outsourcing of work to introducers;
- referrals to other service providers which are not in the best interests of clients;
- failure to properly advise clients about the costs and how their claim should be funded; and
lack of transparency about the arrangement.
This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.