Referral crackdown begins

Solicitors caught breaking their professional rules on referrals of business face disciplinary action as the Solicitors Regulation Authority’s (SRA’s) get-tough policy kicks in.

The SRA is sending a warning card to every solicitor in England and Wales, reminding them of their duties and warning of the disciplinary consequences if they don’t follow the professional rules.

The disciplinary body has warned that unless solicitors toe the line, a blanket ban on referral  fees cannot be ruled out.

Referral arrangements, including those where solicitors pay fees to people like claims managers and estate agents for introducing work, are allowed under certain conditions.

However, they must not undermine the solicitor’s duty to act independently in the client’s best interests, and clients must be told about any referral fee. The SRA has found that in many cases solicitors are not complying with the rules.

Peter Williamson, chair of the SRA board, says: “We are telling solicitors to live up to their professional standards and be open about referral arrangements. The consumer needs to be able to make an informed choice about instructing a solicitor, and needs to know about any referral fees that are being paid.”