Referral fees.
The momentum against referral fees seems to be gathering pace as the Mail on Sunday weekly prints complaints from professionals and members of the public.
The system is iniquitous.
From a solicitor's point of view it corrupts the core duties found in the Solicitors' Code of Conduct. Who is the client? - the buyer/seller and/or the estate agent.
A solicitor takes 100% of the risk in any transaction yet does not take 100% of the fee.
From the client's point of view how can he trust a solicitor who has "paid" to receive that client? Will that solicitor try to appease the estate agent if a dfficulty arises to the detriment of the client because he fears he might get no further work from the estate agent?
The public should be totally free to chose a solicitor or coveyancer without running the risk of offending the estate agent.
It is undoubtedly true that estate agents pressure clients into using conveyancers sometimes on the other side of the country promising a better and cheaper service than that found locally without revealing their ulterior motive.
Countrywide for example make it a disciplinary matter if a client is not told to use Countrywide Property Lawyers. In short a employee can be sacked if they do not toe the line.
I have even come across cases where the fee is demanded in order that the estate agent can pay his negotiators.
I do however think that clients also have a responsibility here. They must demand their rights and not meekly succumb to the seduction of the estate agent.
The Law Society is calling for an end to these fees as has Lord Justice Jackson in his recent Review of Civil Litigation Costs.
Sooner or later they will go but how long must we wait? Will they arise in a different form?
Referral fees have long been
Referral fees have long been a part of life in personal Injury cases. They have spawned a whole empire of companies whose sole purpose is to find accident victims to"sell" them to solicitors. I have an email a week, often more ,offering to provide leads to injured clients.
I cannot see that these companies add anything to the claim process or do anything to improve access to justice. The cost of the middleman has to be borne by someone, and only too often it is the solicitor.
What also seems inevitable is that the cost has to come the other side somewhere...and that does affect access to justice. Solicitors of course only have themselves to blame by not doing enough to attract clients or offer the services they need. Problem is there are many ways to say "thank you"...whatever they are called, referral fees or free lunches have been part of business for centuries and i am not convinced we can get rid of them....Solicitors just have to smarten up and take on the referrers at their own game
Richard Paremain
At one seminar I attended
At one seminar I attended recently the speaker likened referral fees particularly in the personal injury field to advertising expenses.
Personally I cannot see any similarity.
If a client responds to an advert he is at least exercising free will. When a referral fee is paid the client is being manipulated.
At one seminar I attended
At one seminar I attended recently the speaker likened referral fees particularly in the personal injury field to advertising expenses.
Personally I cannot see any similarity.
If a client responds to an advert he is at least exercising free will. When a referral fee is paid the client is being manipulated.