http://www.guardian.co.uk/politics/2011/oct/17/jonathan-djanogly-stripped-power-ambulance-chasers<snip>
The justice minister, Jonathan Djanogly, has been stripped of his responsibility to regulate firms that "ambulance chase" the public following a Guardian investigation that revealed how he and his family could profit from controversial changes to legal aid he was piloting in parliament.
Djanogly, the heir to a £300m family business, had failed to declare that his teenage children were minority shareholders in his brother-in-law's businesses – two firms that advertise claims and are part of an industry that Djanogly regulated in government.
Claims management companies "ambulance chase" the sick, the sexually harassed and the sacked and put them in touch with no-win no-fee lawyers. The firms collect a payment known as a referral fee. In May the Legal Services Board, the independent body which advises minsters on legal regulation, had said the case for banning referral fees "had not been made out". Four months later – without any consultation or impact assessment – Djanogly announced a ban on referral fees in personal injury cases, but effectively excluded his brother-in-law's businesses, which deal with employment law.
Djanogly admitted last week that Sir Gus O'Donnell, the cabinet secretary, had launched an inquiry into the apparent conflict of interest. In a letter to Labour's justice spokesman, Andy Slaughter, who had raised the matter, O'Donnell said that while there is "no suggestion of any impropriety in relation" to Djanogly's brother-in-law's firms that "for the avoidance of doubt decisions about the regulation of individual (claims management companies) should henceforth be handled by another minister".