Lord Young facebooked in bid to ban claims management companies

Lord Young, whose report on compensation culture is expected on 15 October, has been facebooked by a prominent personal injury lawyer over advertising for personal injury work.

In a letter to the Conservative peer posted on the social media platform, Paul Mulderrig said the former cabinet minister should ban claims management companies and only allow reputable personal injury law firms to advertise their services to the public.

Mulderrig urged Lord Young to 'outlaw claims management companies immediately' because 'they don't have any of the requisite professional skills' and are not 'regulated with any force'.

If an outright ban is not acceptable, Mulderrig continued, the payment of referral fees by solicitors to claims management companies should be made illegal and 'suitably strict sanctions' imposed on law breakers.

Criticising the profession's trade body, he added: 'The Law Society has repeatedly stepped back from addressing this issue; referral fees serve only to add a layer of substantial and pointless expense to the process.'

The letter also called for restrictions to be imposed on advertising for personal injury services. Personal injury advertising, Mulderrig suggested, should only be allowed for 'solicitors who can properly demonstrate professional expertise in that field of law', such as Lexcel accredited firms or firms on the Law Society's personal injury panel.

Mulderrig acknowledged that his firm would qualify under these criteria but so would a large number of others, he said.

'If advertising is restricted to proven experts,' he concluded, 'it can only improve the position for accident victims who have legitimate cases.'

Mulderigg is one of many lawyers adding his voice to the wave of protest building ahead of the publication of Lord Young's report on health and safety.

His position on referral fees, for instance, is shared by many lawyers. Respondents to last week's poll on solicitorsjournal.com voted 64 per cent that tougher disclosure requirements, as proposed by the Legal Services Board, would not be sufficient to legitimise referral fees.

Des Collins, senior partner at Collins Solicitors, doesn't like referral fees. Some years ago his firm took over claims from another practice that had been involved with Claims Direct and The Accident Group (TAG), where referral fees had been paid for claims that, he said, should not have been brought. The contracts were honoured but it has left Collins with an unpleasant aftertaste.

Collins' firm specialises in large claims and does not rely on referrals for business '“ he came to public attention for his work representing passengers injured in the Potters Bar and Hatfield rail crashes, and more recently for claimants in the Corby contaminated land case.

Referral fees, he argued, tend to lead to claims which might otherwise not be made. Much as they do in principle provide access to justice, 'it can go too far' and they are 'in practice, difficult to control in a sensible and pragmatic manner'.