Referral fees and why we should hate them

Referral fees are banned. The Bar Council’s new code of conduct explicitly states that barristers must not “pay or receive referral fees”, and additionally “making or receiving payments in order to procure or reward the referral…may also breach public trust.”

Moreover, not only are barristers forbidden to receive payment for a referral (whether the client is aware of it or not) such fees constitute a bribe and therefore, a criminal offence, under the Bribery Act 2010, and is applicable to claims for damages for personal injury or death.

The premise is simple: if those engaged in the law cannot keep their own rules, they aren’t worthy of the profession. Despite this, the subject of referral fees still seems ambiguous, but they are bad news. Here’s why:

  • Distortion of justice: protecting incompetence and fostering lies

A client must have access to the best person for the case, with sound knowledge of the law and advocacy, as well as compassion. Legal representatives exchanging money should play no part in the referral system. Once we treat client as a commodity we neglect to treat them with the common decency they deserve. Good barristers need not bribe solicitors to gain employment, and no solicitor should be recommended unless they are brilliant.

  • Inhibition of competition

Barristers at the bar are self-employed, and work must be allocated to those who are deemed most appropriate for a case. Referral fees bring work because the referee (usually a solicitor who is also obliged to promote justice) is making money out of giving it to you. Additionally, they reward big firms and distort the market. Bigger doesn’t mean better when it comes to the quality of barristers.

  • Quashing the junior bar

Once the culture is established, good junior people can’t refer work or buy it in so they don’t get work – grossly unfair to those who are the keenest to make their mark in the profession, make an honest living, and add value to the legal system.

Referral fees are utterly inimical to what we stand for. Even a disclosed referral fee can never be truly transparent. Real transparency would be telling the whole truth about why they are being paid, and how we treat clients as goods to be bought and sold.

Put simply, the new code of conduct is the best barometer to set standards against. I’m interested to hear any counter-view.

Simon Myerson QC is an associate of myBarrister.co.uk, the direct-access barrister service