LEGAL COMPLIANCE


Welcome to the Nesbit Law Group Compliance department providing consultancy advice to those involved in the personal injury industry.

We specialise in three core areas:

1) LASPO Act 2012
2) SRA Code Of Conduct
3) The Compensation Act 2006


Whether you have a query relating directly to an issue that is specific to your practice or company, or a more generic issue for which you are looking for greater clarity, simply contact one of our specialists through our Online Query Form.

Once we have received your query a fee for the consultation service will be sent for agreement prior to the response being sent.

Please read more to find out more or simply complete the online query form by clicking here.

LEGAL AID, SENTENCING AND PUNISHMENT OF OFFENDERS (LASPO) ACT 2012

The government introduced many changes to the industry on April 1st 2013, as part of the LASPO act 2012, principally regarding the abolition of referral fee payments. Nesbit Law Group are able to provide expert guidance to claims management professionals to ensure that they comply with the laws regarding referral fees set out under the LASPO Act 2012.

Referral Fees

(1) A regulated person is in breach of this section if—
(a) the regulated person refers prescribed legal business to another person and is paid or has been paid for the referral, or
(b) prescribed legal business is referred to the regulated person, and the regulated person pays or has paid for the referral.
(2) A regulated person is also in breach of this section if in providing legal services in the course of prescribed legal business the regulated person—
(a) arranges for another person to provide services to the client, and
(b) is paid or has been paid for making the arrangement.
(3) Section 59 defines "regulated person".
(4) "Prescribed legal business" means business that involves the provision of legal services to a client, where—
(a) the legal services relate to a claim or potential claim for damages for personal injury or death,
(b) the legal services relate to any other claim or potential claim for damages arising out of circumstances involving personal injury or death, or
(c) the business is of a description specified in regulations made by the Lord Chancellor.
(5) There is a referral of prescribed legal business if—
(a) a person provides information to another,
(b) it is information that a provider of legal services would need to make an offer to the client to provide relevant services, and
(c) the person providing the information is not the client; and "relevant services" means any of the legal services that the business involves.
(6) "Legal services" means services provided by a person which consist of or include legal activities (within the meaning of the Legal Services Act 2007) carried on by or on behalf of that person; and a provider of legal services is a person authorised to carry on a reserved legal activity within the meaning of that Act.
(7) "Client"—
(a) where subsection (4)(a) applies, means the person who makes or would make the claim;
(b) where subsection (4)(c) applies, has the meaning given by the regulations.
(8) Payment includes any form of consideration whether any benefit is received by the regulated person or by a third party (but does not include the provision of hospitality that is reasonable in the circumstances).
Effect of rules against referral fees
(1) The relevant regulator must ensure that it has appropriate arrangements for monitoring and enforcing the restrictions imposed on regulated persons by section 56.
(2) A regulator may make rules for the purposes of subsection (1).
(3) The rules may in particular provide for the relevant regulator to exercise in relation to anything done in breach of that section any powers (subject to subsections (5) and (6)) that the regulator would have in relation to anything done by the regulated person in breach of another restriction.
(4) Where the relevant regulator is the Financial Services Authority, section 58 applies instead of subsections (1) to (3) (and (7)to (9)).
(5) A breach of section 56—
(a) does not make a person guilty of an offence, and
(b) does not give rise to a right of action for breach of statutory duty.
(6) A breach of section 56 does not make anything void or unenforceable, but a contract to make or pay for a referral or arrangement in breach of that section is unenforceable.
(7) Subsection (8) applies in a case where—
(a) a referral of prescribed legal business has been made by or to a regulated person, or
(b) a regulated person has made an arrangement as mentioned in section 56(2)(a), and it appears to the regulator that a payment made to or by the regulated person may be a payment for the referral or for making the arrangement (a "referral fee").
(8) Rules under subsection (2) may provide for the payment to be treated as a referral fee unless the regulated person shows that the payment was made—
(a) as consideration for the provision of services, or
(b) for another reason, and not as a referral fee.
(9)For the purposes of provision made by virtue of subsection (8) a payment that would otherwise be regarded as consideration for the provision of services of any description may be treated as a referral fee if it exceeds the amount specified in relation to services of that description in regulations made by the Lord Chancellor.

SRA CODE OF CONDUCT

The SRA code of conduct also underwent changes following the LASPO Act 2012. Nesbit Law Group can provide guidance and consultancy advice on all aspects of the SRA Code Of Conduct, enabling your firm to remain compliant throughout the changes. Below is section 9, most relevant to those working in the Personal Injury Industry:

Chapter 9: Fee sharing and referrals

This chapter is about protecting clients' interests where you have arrangements with third parties who introduce business to you and/or with whom you share your fees. The relationship between clients and firms should be built on trust, and any such arrangement should not jeopardise that trust by, for example, compromising your independence or professional judgement.
The outcomes in this chapter show how the Principles apply in the context of fee sharing and referrals.

Outcomes

You must achieve these outcomes:

O(9.1)
your independence and your professional judgement are not prejudiced by virtue of any arrangement with another person;

O(9.2)
your clients' interests are protected regardless of the interests of an introducer or fee sharer or your interest in receiving referrals;

O(9.3)
clients are in a position to make informed decisions about how to pursue their matter;

O(9.4)
clients are informed of any financial or other interest which an introducer has in referring the client to you;

O(9.5)
clients are informed of any fee sharing arrangement that is relevant to their matter;

O(9.6)
you do not make payments to an introducer in respect of clients who are the subject of criminal proceedings or who have the benefit of public funding;

O(9.7)
where you enter into a financial arrangement with an introducer you ensure that the agreement is in writing;

O(9.8)
you do not pay a prohibited referral fee.

Indicative behaviours
Acting in the following way(s) may tend to show that you have achieved these outcomes and therefore complied with the Principles:

IB(9.1)
only entering into arrangements with reputable third parties and monitoring the outcome of those arrangements to ensure that clientsare treated fairly;

IB(9.2)
in any case where a client has entered into, or is proposing to enter into, an arrangement with an introducer in connection with their matter, which is not in their best interests, advising the client that this is the case;

IB(9.3)
terminating any arrangement with an introducer or fee sharer which is causing you to breach the Principles or any requirements of the Code;

IB(9.4)
being satisfied that any client referred by an introducer has not been acquired as a result of marketing or other activities which, if done by a person regulated by the SRA, would be contrary to the Principles or any requirements of the Code;

IB(9.5)
drawing the client's attention to any payments you make, or other consideration you provide, in connection with any referral;

IB(9.6)
where information needs to be given to a client, ensuring the information is clear and in writing or in a form appropriate to the client's needs;

IB(9.7)
having effective systems in place for assessing whether any arrangement complies with statutory and regulatory requirements;

IB(9.8)
ensuring that any payments you make for services, such as marketing, do not amount to the payment of prohibited referral fees;

IB(9.9)
retaining records and management information to enable you to demonstrate that any payments you make are not prohibited referral fees.

Acting in the following way(s) may tend to show that you have not achieved these outcomes and therefore not complied with the Principles:

IB(9.10)
entering into any type of business relationship with a third party, such as an unauthorised partnership, which places you in breach of theSRA Authorisation Rules or any other regulatory requirements in the Handbook;

IB(9.11)
allowing an introducer or fee sharer to influence the advice you give to clients;

IB(9.12)
accepting referrals where you have reason to believe that clients have been pressurised or misled into instructing you.

In-house practice

Outcomes 9.1 to 9.3 apply to your in-house practice.
Outcomes 9.4 to 9.8 apply unless it is clear from the context that the outcome is not relevant to your particular circumstances.
Overseas practice

Outcomes 9.1 to 9.7 apply to your overseas practice, except where they conflict with the SRA European Cross-Border Practice Rules which will prevail in any conflict.

COMPENSATION ACT 2006

With the introduction of the Compensation Act 2006 all companies operating in the personal injury sector are being faced with a stricter set of regulations within which to operate. Although aimed at claims management companies specifically a significant aspect of the Act will impacts upon the day to day responsibilities of all Solicitors involved. As a result should your practice not fully comply it will be at risk of, among others, a criminal conviction. To ensure your practice is suitably compliant Nesbit Law Group are able to provide a range of services covering the following topics:

• The basic principles
• Identifying and Controlling Exempt Introducers
• Compliant Advertising and Marketing
• Conflicts of Interest

Contact Us



T: 0161 375 1810
F: 0161 850 0089
mail@nesbitlawgroup.co.uk



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