Wednesday, 10 October 2012

The Musings of a Grumpy Old Git

I'm feeling grumpy today. I have been in a good mood all day so not quite sure what has turned me sour. Ok well actually I do. Having been  beavering away all day, I decided to have a break late afternoon and turned to the excellent Legal Futures website. Apparently there has been some report or other carried out by the delightfully named 'Espirito Santo Investment Bank' which says (I haven't read the report - I can rely on Neil Rose and his team to tell me all I need to know);


  • Numerous 'external investors' will appear on the scene once the 'floodgates of change' hit the PI market next year
  • There will be just five or six claimant firms likely to dominate
  • Lots of insurers fancy becoming ABS's (I'll bet they do!)
  • Apparently PI Legal services will become - wait for this - you'll enjoy this piece of plain English - 'part of a more integrated supply chain..Service providers will increasingly include multi disciplinary tie-ups which offer bundled services. Size will be critical'. Really - bigger is better and all that?
  • Most CMC's will disappear - if they are merely ticket touts ie selling on PI claims for more than they paid for them,then good. 
  • Their (the CMC's) cases will be picked up by solicitors who have the funds (because they aren't paying referral fees anymore) and the time (because they've no work to do) and they will have suddenly picked up the skills (that they haven't had for all those years they were paying referral fees) and the inclination to go out and market for themselves and pick up lots of new PI cases. That'll be alright then - except wait - I thought the 'five or six' 'size is critical' outfits were going to hoover up all the new claims - so there aren't actually going to be any for the small to medium sized firms after all? Ah, here we go...
  • As a result of the referral fee ban, claimant firms will either look to expand...or ...erm... they won't - in which latter case they will exit the market..
I started to get bored after that. Apparently there are going to be a lot more mergers and basically if you don't merge or form an ABS or get loads of funds invested in your firm to expand then you might as well go and do some conveyancing or become a shipping lawyer or something of that nature. Oh and if you do form an ABS, merge or take on 100 new staff and act the big law firm...don't forget that the only thing that has been decided is that referral fees for PI work are banned (but not yet properly defined blah blah). So you might in fact be spending a lot of money on ABS, merger, expansion and come April you may well find that you can't make RTA/PI pay!


Thursday, 4 October 2012

The SRA and The Hot Potato

                                                                                 

I went to a talk given by a chap from the SRA last week about the ban on Referral Fees in Personal Injury cases and how this will be policed by the SRA in respect of solicitors (the Claims Management Regulator will look after CMC's, I believe). I hoped to glean some nuggets about what will and what won't be allowed. I came away scratching my head, it has to be said. In essence I knew nothing more when I came away from the talk, than when I went in.

I'm not having a go at the SRA man personally. As I have argued before, the SRA have been given a real hot potato to deal with here. An organisation that is already stretched in terms of work and resources now finds itself landed with the job that no-one wanted to do and already finite resources having to stretch even further in order to deal with it all. Add to that that the ban will come into force on the 1st April 2013 and with a formal 12 week consultation period yet to get under way following the responses to a recent discussion paper on the ban, and we will be left with a pitifully short period of time for all this to be in place for the due date.

As the SRA are not in favour of 'rules' as such then the mandatory outcomes will be amended with a few of those 'illustrative indicative behaviours' added and that will be it.

As the SRA has finite resources at it's disposal it seems certain that those firms which presently rely heavily on paying referral fees for work, will be closely looked at to see how they intend to move forward post April 2013.

Perhaps the SRA are being quite cute - cuter than we are perhaps giving them credit for. They know that RTA/PI lawyers are pretty wily characters, who given a rule will find a legitimate way of circumventing that rule. If the solicitor has no rule to 'get round' then he/she is left with taking a chance should they decide to try paying a 'referral fee' that is not a 'referral fee' - and being left with the prospect of being made an example of by the SRA, should it transpire that the 'referral fee' that was not intended to be a 'referral fee' ends up being one after all!

Ok, I hope that that clears everything up!