The Solicitors Regulation Authority is to canvass personal injury firms dependent on referral fees to ask how they will cope when the government moves to ban the payments.

Richard Collins, SRA director of standards, told a LexisNexis conference on professional regulation that the authority was identifying a group of firms ‘heavily reliant’ on business generated from paying referral fees.

He said: ‘A statutory ban will clearly pose significant difficulties for those firms. We will begin to have a discussion about implications for business and what are the plans for managing that.’

The Law Society, which supported a ban, has urged the government to give firms time to adapt. Chief executive Desmond Hudson has warned of the scope for ‘unintended consequences’, pointing out that many law firms have reluctantly had to base their business models on the payment of referral fees ‘as the actions of insurers and claims management companies meant they were forced to do so’.

How the ban will be implemented remains uncertain. One possibility is that the government will legislate to require professional bodies to introduce and police the prohibition, which will have obvious logistical and resource implications. Or it could opt for a general statutory prohibition on requesting and receiving such fees, with civil penalties for breaching the ban.

A ten-minute rule bill drafted by former justice secretary Jack Straw (pictured), calling for a breach of the ban to be a criminal offence, will have a second reading in January.

Another potential difficulty forecast by some commentators is that insurers may seek cuts in solicitors guideline hourly rates and fixed costs in road traffic claims.