Devil is in referral fees detail

Harry Kanter has reason for doubting whether payments to third parties will improve service to clients. For instance he wonders how the practice of solicitors accepting referrals will promote competition, apart from that which will be created among those persons and companies who are able to introduce potential clients and thus enjoy another source of income.

He also doubts whether the new rules will ensure the independence of advice. Since the commercial dynamic between referrer and referee could be such that referrers will be tempted to prefer solicitors who are prepared to pay more for introductions per se, rather than on the grounds of ability, experience or appropriate specialisation.

He notes that at the end of the day someone is going to have to pay the costs of referrals, and the most likely candidate for this is the client, whether directly or indirectly. In an ironic twist, he foresees commission arrangements leading to a new income stream for solicitors from the undoubted litigation that will follow.

Article in the Law Gazette

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