Referral fees plague
Following the demise of HIPs various seemingly reputable organisations have immediately devised plans to join the referral fee bandwagon in the ostensible guise of assisting Domestic Energy Assessors (DEAs).
DEAs it will be remembered provide Energy Performance Certificates(EPCs) which are supposed to provide an indication of the energy efficiency of a particular property.
The EPC is the one document which has survived the suspension of HIPs and has to be "commissioned" before a house can be marketed.
NHER and SAVA are now actively promoting a scheme called "Partner Property".This has been dreamed up by eTech and Ipacks2go (formerly Hip2go) and will exploit DEAs by allowing them to offer free EPCs so long as the home owner uses a conveyancer supplied by Partner Property. Partner property then pay the DEA for the EPC and pays a referral fee if the unsuspecting punter uses the conveyancing firm supplied by Partner Property.
Is the home owner told anything about this? I doubt it.
Does the Dea know anything at all about conveyancing? No.
Does the DEA have a clue about the level of service being offered? I doubt it.
Will the conveyancing firm be local? I doubt it.
Does the scheme restrict freedom of choice? Yes,
Is this another example of the exploitation of the weak by the powerful to advance the interest of the powerful? It most certainly is.
Referral fees
This appears to be yet another attempt to "hijack" Solicitors' Clients and rather supports the concerns raised by the Legal Service Consumer Panel in its recent Report:
-Price, not quality, dictates who gets the work;
-Clients are subjected to high-pressure sales techniques;
-Non-disclosure is prevalent; and
-Panels are restricted, mainly consisting of larger, national firms.
To try to combat such threats, why don't Solicitors offer similar incentives? They could, for example, arrange the EPC and then refund its cost if they deal with the conveyancing? A group of local firms could join together for advertising and marketing purposes and still offer Clients freedom of choice between local, quality firms. Such a promotion could also highlight to unsuspecting potential Clients the alternative promoted by Partner Property and others.
Martin Gregory
Lateral Law Limited
Putting Solicitors First
The Locum Solicitor
I believe that the problem
I believe that the problem has a very simple explanation.
When an owner decides to sell his he turns to an estate agent as a matter of course.
The estate agent ruthlessly manipulates everyone who comes through his door to squeeze the maximum amount of money from the client in all possible ways.
While this situation continues the solicitor is at the mercy of the estate agent.
I took the view that the introduction of HIPs presented solicitors with an opportunity to wrest the initiative away from the agents for the benefit of clients. I certainly tried to do that but even this has now been taken from us.
The latest advice to the Legal Services Board suggests that referral fees are acceptable provided that there is disclosure and regulation. There is also an assertion that clients do not pay more when a referral fee is paid. I know that this is not true.
http://www.lawgazette.co.uk/news/second-blow-supporters-referral-fee-ban
I know that if I paid a referral fee of £300.00 for each conveyance I would be out of business within a few weeks.
Do referral fees work?
You may have already read my latest article about referral fees, raising similar concerns to Ian, but here is the link: www.legalfutures.co.uk/regulation/solicitors/do-referral-fees-work
Martin Gregory
Lateral Law Limited
Putting Solicitors First
The Locum Solicitor