Agencies which fail to carry out sufficient checks regarding the suitability of third-party placements could end up in court.

The warning was issued under the revised Employment Agencies Act (EAA) rules, which came into effect last week.

Michel Stein, employment professional support lawyer at Nabarro Nathanson, said: “Where a recruitment consultancy places individuals with a business via a gangmaster, it must carry out reasonable checks [to ensure] that the individuals supplied by the gangmaster are suitable and that there is no risk of detriment with the placement going ahead.

“If the consultancy was concerned that the gangmaster’s operations may affect the suitability of the placement, the consultancy may well have to terminate business arrangements to ensure that it meets the obligations,” he added.

“If the recruitment consultancy fails to make such enquiries,” she added, “and either the individual or the business by which it is hired suffers financial loss or personal injury as a result, the recruitment consultancy may be sued.”

Jim Sheridan (pictured), Labour MP for West Renfrewshire, proposed a bill to crack down on gangmasters in January, just a few weeks before the Morecambe Bay cockle-picker tragedy reopened the debate.

Under the terms of the Sheridan bill, gangmasters, who control gangs of low-paid immigrant workers, would need special licences to operate.