The new offence being created to ban referral fees will cover those receiving the fees as well as the lawyers who pay them, justice minister Jonathan Djanogly said last week.

The minister told a LexisNexis costs conference that he wants the offence to go ‘further than just solicitors’.

Djanogly said he had decided to use a regulatory rather than criminal offence to implement the referral fee ban because of the lower burden of proof. Jurors in a criminal case might have difficulty with the complex scenarios that could arise, such as where an insurer gives a solicitor work but insists that the lawyer buys its insurance in return.

Djanogly noted that the previous ban on referral fees, lifted in 2004, involved too much ‘leakage’ in the system, which he wants to avoid.

The Legal Aid, Sentencing and Punishment of Offenders Bill is on track to become law by the end of the year, Djanogly said. He added that the bill’s provisions, which include Lord Justice Jackson’s reforms to civil litigation, will come into force next October.

The minister said he had not been swayed by ‘special interest groups’ seeking exemptions from the provisions. ‘Sir Rupert Jackson is very firm in his belief that non-recoverability [of certain costs] must be brought in as a package across the board.

There are many different interest groups who feel that they are a special case: clinical negligence, insolvency, professional negligence. They all say that they should have carve-outs. I can see now why he wants it as a package, and we support his view.’

On the government’s separate proposal to raise the small claims track limit, Djanogly said this would benefit many consumers. However, he said reports that a rise in the limit to £10,000 was already a ‘done deal’ were not correct.