Legal Aid, Sentencing and Punishment of Offenders Bill

My Lords, I think that there is broad agreement across the House about the need to ban referral fees in personal injury cases, as we propose in Clauses 54 to 58. However, there is some disagreement about how it should be done, as this debate has shown. It may be helpful if, in reply, I deal separately with those amendments with which we have some sympathy and those with which we do not. The Government agree with the intention behind Amendments 146A and 148A in the name of my noble friend Lord Hunt of Wirral. I give the House a commitment that we will bring back amendments at Third Reading to address the issues raised by those amendments. However, the Government cannot agree with Amendments 142E and 146. We believe that it is not in the public interest for payments in receipt of referral fees to be allowed in any personal injury cases, regardless of whether the recipient is a solicitor, a charity, a trade union or some other party. If the provision applies to solicitors who pay referral fees, it must also apply to the not-for-profit organisations which deal with them. The Government intend to ban the payment and receipt of referral fees in all personal injury cases, and we are not persuaded that there should be special treatment for not-for-profit organisations, or for solicitors dealing with trade unions, to exempt them from the ban. However, trade unions will of course still be able to refer cases, without payment, to those best able to pursue them. Nothing in the clauses prevents lawyers providing services free of charge to registered charities. A number of points were made in the debate. The noble Baroness, Lady Deech, made a powerful case in favour of what we are trying to do on referral fees. She referred to a case, which we all remember, which shows how the best of intentions can be misused when trying to deal with a problem. I say to the noble Lord, Lord Martin, that I certainly advocate the value of trade union membership, but that there is a danger of trade unions, charities and others having a sweetheart relationship with a firm of solicitors based on referral fees. My noble friend Lord Hunt of Wirral asked me how much of the excess litigation costs can be taken out of the system. My right honourable friend the Prime Minister has announced that we will be extending the road traffic accident scheme to cover claims up to £25,000, and to cover employer and public liability cases. As part of that process, the Government intend to make an objective assessment of the existing costs involved in RTA schemes, and we expect fixed recoverable costs of £1,200 to be reduced significantly as a result. The new fees will come in when the Jackson reforms in Part 2 of the Bill and the ban on referral fees are implemented in April 2013. Although I cannot give a precise figure, the aim, as in other parts of the Bill, is to squeeze out of the system excessive costs, which are undoubtedly there. I hope that, in the light of those responses, the noble Lord will withdraw the amendment.