Unite the Union believes that the ban on referral fees should not impact

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1 Unite the Union response to the Solicitors Regulation Authority discussion document: Proposed Ban on referral fees in personal injury cases This response is submitted by Unite the Union. Unite is the UK s largest trade union with 1.5 million members across the private and public sectors. The union s members work in a range of industries including manufacturing, financial services, print, media, construction, transport and local government, education, health and not for profit sectors. Summary Unite the Union believes that the ban on referral fees should not impact on trade unions like Unite that have traditionally delivered a package of legal services, which are by their nature not directly related to the supply of personal injury cases to panel law firms, but which are derived from competition and economies of scale. Union members and their families who benefit from a broad range of Unite s legal services are not at risk as consumers, but on the contrary would be substantially worse off, if those legal services were curtailed by the ban on referral fees. The impact on access to justice would be adverse, if union legal services are undermined. 1

2 The impact on unions ability to operate effectively in relation to activities they have engaged in since the 19 th century and reinforced by Article 11 of the European Convention on Human Rights will be seriously undermined if the ban on referral fees becomes a ban on union services that have been available before Unions legal services 1. Unite the union legal service is not limited to personal injury claims and never has been. 2. Of course the union provides support in meritorious personal injury cases for members and their families. This has been the case long before the Access to Justice Act Support for members at work is core to the purpose of the union. 3. Unite the union, its predecessors and the trade union movement in general is primarily concerned with the protection and advancement of working people. The pursuit of fair compensation for injured workers is a crucial element to promoting health and safety at work. 4. The interest of trade unions is further reinforced by the content and intended impact of the EC Framework (Health and Safety) Directive (89/391/EEC) and daughter Directive and Regulations. The Directive includes the government s obligation to improve the health and safety of workers. We note the reasons for the amendment to the Management of Health and Safety at Work Regulations 2

3 1999 to introduce a right to claim for damages for breach (see, for example, ). 5. Unite s legal service is and has been much wider than that. Inevitably assistance is available members for meritorious employment claims, from equal pay claims and discrimination to black listing. Long before 1999, such assistance was provided to the union by our panel law firms with arrangements that resulted in Unite the Union and other unions paying well below commercial hourly rates. This was a result of the union s bargaining power, competition and opportunities for economies of scale and coupled with the commitment on the part of panel law firms to the trade union cause. 6. Free wills are also made available to members and this includes joint wills for members and their spouses. This is a beneficial service to society. The history of unions providing free wills begins in the 1980 s. A union law firm planning to steal a march on its rivals invited its union clients to offer the free wills service. The firm offered this as part of a package to attract new work. In fact it was planned that this would not cost the firm as they would store the wills and intended to offer probate services. Other law firms soon followed suit. Other mixed practices with an existing probate department presumably wondered why they didn t think of it. Hundreds of thousands of union members consumers benefitted by having a will and having one for nothing. 7. The union s legal service also encompasses free initial legal advice for members and their families, which has a similar history. A half hour free legal advice service offered to the members of a membership organisation could lead 3

4 to private work for a firm of solicitors. The benefits for society and the reduced pressure on other advice agencies (particularly at a time of savage cuts) are clear. 8. The lawyers also provide free education, booklets and other materials, at union schools and the like. Again they have been doing so for decades. This was also a matter of offering a comprehensive service and commitment, but had the added, advantage perceived by the lawyers, of having and maintaining contact with union officials. 9. There are other aspects to the union s legal service, including conveyancing on favourable terms, which also pre-dates The panel law firms also help with marketing action to promote the union legal service as they have done for decades this includes reference to personal injury claims along with all other aspects of the union legal service. The payment does not relate to the referral of a personal injury claim 10. Unite the union notes the definition of referral fee payment in the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) Section 56 (8) says 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). Trade unions do not appear to be regulated persons and we maintain that the range of legal services that Unite provides does not amount to a form of consideration in the context of the Act. 4

5 11. LASPO Section 56 (1) says breach of the ban occurs when prescribed legal business is referred to the regulated person, and the regulated person pays or has paid for the referral. or in other words if a payment is made in return for referral of a personal injury claim. However, as can be seen from the explanation of the history of union legal services above, those services are not directly related to a payment or consideration for personal injury cases. 12. Paragraph 23 of the Discussion Paper seems to be consistent with such an interpretation namely that the payment by reference to free wills, free legal advice, free education, reduced cost for employment cases and reduced rates for conveyancing being in the nature of services that the union and its members have enjoyed for decades is not a payment for the referral of personal injury cases. 13. We would welcome any opportunity to expand on the role of trade unions and in particular the role of Unite the Union in relation to the provision of legal services and the ban on referral fees. Consumer protection and an outcomes based approach 14. We understand that the SRA is rightly concerned with consumer protection. We are convinced that union members are not at risk. We have no issue with transparency and encourage it. 5

6 15. Unite the union panel law firms are expected to comply with their obligations, including those in Rule 9 of the SRA Code of Conduct. We assist them in that regard, when requested to do so. In addition we comply with the Code of Practice for the provision of Regulated Claims Management Services by Trade Unions. (There are good reasons why trade unions are not formally regulated, which we can explain further if required to do so, but the reasons include the nature of the relationship between union members and their representatives and the activities of union representatives in this context). 16. It causes us no difficulty to explain the nature of our referral arrangements to our members, as required. We do not believe there is any evidence that trade unions are failing to comply with their obligations in this regard, nor any evidence of adverse consequences to union members (or others) from the current situation affecting trade unions. 17. Unite the Union believes that consumers informed by accurate and understandable information would invariably chose union legal services if that option was available to them. This includes family members of trade unionists, who might benefit from the union s legal service. Those who can call on Unite the Union will have a service second to none and which is currently no fee win or lose and not just no win no fee. 18. This service is under threat as a result of the reforms, including threats to base costs, including reductions in fixed fees, in the context of further threats to the small claims track limit in personal injury cases and the loss of recoverability of additional liabilities, as part of the Jackson recommendations. This will 6

7 undoubtedly damage access to justice for injured people throughout England and Wales. Concluding remarks 19. Unite the Union wants to cooperate closely with the SRA to implement the ban on referral fees in a way that does not impact on core union legal services of a nature that we believe is underpinned by Article 11 (Freedom of Association) of the European Convention on Human Rights and Fundamental Freedoms. 20. In any event we would welcome dialogue to clarify any issues and to help focus resources at the issues that matter the most and cause the greatest risk to the public and the regulatory objectives. Unite the Union looks forward to working with the SRA to this end even before the formal consultation later in the year. Howard Beckett Director of Legal and Affiliated Services Unite the Union cc: 7

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