Anger over Law Society proposal to kill off solicitor referral fees

23 November 2009 | By Natalie Thomas

The Law Society has sparked anger at its decision to lobby the govern-ment and the Legal Services Board to ban referral fees involving the legal profession.

If successful, the move could bring an end to the payment of fees for referring any legal work inclu-ding conveyancing, will writing and claims management cases.

Eddie Goldsmith, senior partner at Goldsmith Williams, says the decision could seriously affect mortgage brokers.

He says: “If referral fees are banned it would affect a lot of brokers who have arrangements with solicitors and claims firms.”

The Law Society, which repre-sents all UK solicitors, has adopted a motion to make representations to the government and the Legal Services Board that referral fees do not have a place in markets for legal services and should be banned.

But it is the Solicitors Regulatory Authority not The Law Society that has the power to change the rules so the motion will be subject to consultation in the coming months.

In a motion to its governing council The Law Society says: “As referral fees have the potential to limit access to justice and reduce the quality of legal services The Law Society should make representations to the government and the Legal Services Board encourag- ing the banning of referral fees by providers of legal services.”

Goldsmith adds: “It’s hard to understand why The Law Society wants to ban referral fees now, when it took the decision to allow them just five years ago.”

Bob Bhalla a solicitor at Gordons Property Lawyers, says: “We pay referral fees and have never had a complaint about them.”

Tim Robinson, mortgage mana-ger at IFA Pearson Jones, says: “We have built a number of strong relationships with legal firms which are mutually beneficial. All our clients know what the referral fee is paid for.”

If you enjoyed this article, sign up here to receive daily email updates from Mortgage Strategy and Follow @mortgagestrat