Jack Straw is confident he will succeed in his high-profile bid to criminalise personal injury referral fees. The former justice secretary believes the government will amend its reforms of civil litigation to incorporate the sanction.

The MP for Blackburn said yesterday that Labour’s legalisation of the fees through changes to conduct rules in 2004 had created conditions that have driven up motor insurance premiums.

Earlier this month, Straw tabled a ten-minute rule bill calling for payment of personal injury referral fees to be dealt with as a criminal matter. His initiative came soon after the government announced a ban would be reintroduced for PI cases.

Speaking at an event on Wednesday organised by iloveclaims.com, Straw said he is confident his proposal will be included in the government’s final legislation.

He said: ‘You can sometimes deal with these things by making it a civil matter but if you want to rid the industry of referral fees then you have to make it a criminal offence.

‘I’m not in any doubt this will happen. The government’s intention is to make it part of new clauses in the [Legal Aid, Sentencing and Punishment of Offenders] bill.

‘Once that happens, I also say that those who engage in this process will in my judgement be vulnerable in egregious cases to charges under the Bribery Act.’

Straw, who called for a ban to apply to all legal services and not just personal injury, reiterated his view that referral fees form part of a ‘racket’ designed to raise costs and send insurance premiums soaring.

And he derided Legal Services Board-commissioned research last year which led to the over-arching regulator ruling out a ban, describing it as ‘gobbledygook’. He added: ‘They [the LSB] don’t know what the public feels and haven’t found out about it.’

Straw was sanguine when asked to comment on the perception that he had been ‘gazumped’ by the government.

‘Ken Clarke did what any sensible secretary of state would do, faced with widespread agreement from across the chamber, which was to get his cabinet colleagues to change their previous position,’ he said.

‘I don’t criticise Ken for that, neither do I believe he was dealing in low politics.’

A LSB spokesman said: 'After a review of the impact of referral fees on the legal services market as a whole, the LSB concluded that there was no regulatory case for a blanket ban. Our decision was informed by analysis of a wide-ranging evidence base.

'The announcement by government, in the context of curbing "compensation culture", concerns only personal injury claims, and clearly extends beyond the legal services market. We will continue to work with government to ensure that any specific implications for legal services regulators are understood.'