Kevin Barrow, a recruitment specialist at solicitors Blake Lapthorn Tarlow Lyons, believes recruiters face further legal bills this year as they prepare for unprecedented new legislation.

The French EU presidency in the second half of 2008 may push through the Temporary (Agency) Workers Directive, giving temps rights to pay, benefits and security of employment equivalent to those enjoyed by comparable perms.

Barrow said: "Recruiters should support trade associations in resisting this Directive and reassure clients that its adoption is still not certain. Think about any categories of worker you could employ yourself or engage via third party employers, and start preparing contracting models likely to fall outside the Directive."

Looking at other key developments, the Court of Appeal decision about rights of temps in the James v Greenwich appeal is due any day. It is possible the Court will issue new guidelines which could give temps employment rights against end users and/or staffing companies.

Barrow advised: "Any decision is unlikely to be as far-reaching as it first appears and will be likely to focus on the extent of control and supervision by the end user."

Any recruiters who place directors or company secretaries into perm or interim positions have been required, since 15 December, to adopt new anti-money laundering procedures. Failure to adopt these procedures is a criminal offence.

Barrow said, get qualified advice, and if you are caught adopt immediate compliance and sign up to the new register.

"Be very careful about maintaining turnover in any recession by bidding for 'payroll only' deals at discounted margins."

Since 6 January, employment businesses potentially became liable for tax debts of contractors under the managed services companies (MSC) regime.

"Question contractors and their advisers to make sure you do not inherit their tax debts," Barrow said. "Be particularly careful about offshore arrangements, the recent growth of which HMRC are not happy about."

New 2008 pension legislation may make it compulsory for employment firms to contribute to pensions for temps. This may also affect umbrella contractors.

Barrow advises recruiters to study available pension arrangements, perhaps subsidised by commission payments from major insurers, and look at how recruiters can supply temps in ways falling outside the new pension regime.

Recruiters should also take heed of the increased criminal penalties for breach of the data protection legislation, and a crackdown on illegal workers from spring 2008, with much more severe criminal penalties.