Referral fees

When Lord Justice Jackson and the Law Society agree, can consensus be far behind? Unfortunately, the answer is either ‘no’ or, if it is, it is a very long way behind. First, there was the economic impact analysis, commissioned by Charles River Associates, which found that not only do referral fees in personal injury work and conveyancing not harm consumers, but they actually result in cheaper conveyancing fees and improved access to justice for injured people. It found no case to ban them or to take any other regulatory action. It found in respect of personal injury cases, success rates in motoring claims have not declined while there was no evidence of solicitors under-settling claims because of the pressure of lower margins. Contrary to the claims of the insurance industry, the report also found no evidence of increases in referral fees having led to an increase in the price of legal services. Quality was not affected. The report continued: ‘Evidence of the number of complaints is low, customer satisfaction is high and the speed of transaction appears to be faster for those who pay referral fees.’