Part 2Litigation funding and costs

Referral fees

56Rules against 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).