A fine affair on fees

The following letter was originally published in the Gazette:

"Dear Editor,

Whether the original ban on referral fees is reinstated (see [2004] Gazette, 4 June, 14) or the amended rules, which offer ‘greater clarity for the profession’, remain in place, the key question will be one of enforcement.

Given the Court of Appeal has confirmed the unlawfulness of the referral fees paid in The Accident Group scheme, what punishment does the Law Society propose for offending firms? If none, then the issue of whether the ban should be lifted is irrelevant as the rules will continue to be flouted.

As the referrals in both The Accident Group and Claims Direct (also held to be unlawful) were via firms of solicitors, it should be easy to obtain details of member firms and the number of referrals made. A simple fixed fee fine per case could be introduced – say, £100.

There are certainly many solicitors who will already have suffered losses from the decisions concerning non-recoverability of the referral fees – but the responsibility for discouraging breaches of the practice rules rests primarily with the Law Society. Does it have the courage to act?

Simon Gibbs"