Page last updated at 13:27 GMT, Thursday, 7 July 2011 14:27 UK

Ministers considering personal injury referral fees ban

The government is "sympathetic" to banning the practice of personal injury lawyers paying insurance companies for the details of people involved in accidents, Justice Minister Lord McNally has said.

Conservative peer Lord Sheikh said Lord Justice Jackson's review of litigation costs called for a ban on so-called referral fees and asked whether the government would include it in the Legal Aid, Sentencing and Punishment of Offenders Bill which is currently going through the House of Commons.

"The government is sympathetic to the idea of a ban on referral fees and is looking at how to tackle the issue as part of our wider reforms, and how we could do so in a way that would be effective," Lord McNally said at question time in the House of Lords on 7 July 2011.

He added: "Whether the question of referral fees will find its way into the bill is a matter of the study that we are undertaking into ways that this could be implemented.

"We are trying to bring forward a range of the Jackson proposals in that bill. On the issue of referral fees, the Legal Services Board and the Transport Select Committee advised a solution in terms of transparency.

"Lord Justice Jackson's recommendation was for a ban."

Lord Marks of Henley-on-Thames described the practice as "unethical and offensive" and also "deprived" people of having their claims "handled not by the most qualified or competent solicitors".

Lord McNally said the more the issue was in the public domain "the more all parts of the insurance industry, the insurance companies and the solicitors and the consumers will demand - and we will respond to that demand - to ban it".

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