News releases
Solicitors get final warning on referrals
30 January 2007
A crackdown on solicitors who are breaking their professional rules on referrals of business has begun.
The Solicitors Regulation Authority (SRA) is sending a strongly-worded warning card to every solicitor in England and Wales, reminding them they risk facing disciplinary action if they don't follow their professional rules.
Referral arrangements, including those where solicitors pay fees to people like claims managers and estate agents for introducing work, are permitted 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.
"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", said Peter Williamson, chair of the Solicitors Regulation Authority Board.
"I hope the warning card will reassure those solicitors who are following the rules, but will alert those who aren't that disciplinary action is likely. It is essential that solicitors give independent advice and act in the best interests of their clients", he said.
The warning card highlights the bad publicity that improper referral arrangements have attracted. It reminds solicitors of their core duties and tells them to check their referral arrangements are compliant.
Claims management firms will come under a new regulator from March 2007, and solicitors will only be able to deal with regulated companies in personal injury cases.
The SRA Board decided on a tough programme of enforcement alongside an information campaign. It will review the situation later in the year and will consider a ban on referrals fees or other measures if solicitors cannot be made to work within the rules.