Law Soc to make decision on payments for referrals

There is broad support for the move, as it will formalise the common scenario of lawyers paying such groups as claims management companies in return for work. These on-average £75 payments per case have been something of an embarrassment for the Law Society, because they clearly fly in the face of its own rules.
However, the Law Society has reservations. “We cannot predict how payments for referrals would affect the profession's reputation, as we do not know how the public regard such payments,” its paper on the subject says. It feels that clients may be misled into thinking referrals are on the basis of the solicitor's expertise, whereas in reality the solicitor is taking the case for “the introducer's financial benefit”.
Also, payments for referrals lead to higher fees or reduced standards, and the clients' choice is restricted to those able to pay for the case.
In its consultation response paper, the Association of Personal Injury Lawyers, while accepting that the current ban should be removed, views removing it “with concern”. Its paper states: “Removing the ban… will only replace one unlevel playing field with another, as it will result in the richer, probably larger firms being able to pay for more claims than the smaller firms.”
Also, the ban may lead to a loss of reputation arising out of the public and media's concern that solicitors paying for work may lead to conflicts of interest.