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Solicitors debate referral fees
Thursday 30 April 2009 by Jonathan Rayner
Solicitors are ‘crap at marketing’ and need claims management companies (CMCs) to fill the gap, a delegate told the APIL conference. A debate, ‘Referral fees and advertising – is it too late to put the genie back in the bottle?’, chaired by TV presenter John Stapleton (pictured), aroused strong passions.
The delegate who made the comment said solicitors rely on CMCs to be the ‘front end of their route to market’. A barrister rejected the justification, reminding the conference that the bar prohibits all buying or selling of clients. He said the ban on referral fees should be reinstated. ‘Admit a mistake was made and do a U-turn, like reversing the downgrading of cannabis,’ he said.
Kevin Rousell of the Ministry of Justice claimed the ‘cowboys’ had been driven out of the CMC industry, but what remained was ‘less transparent’ and more difficult to tackle.
A solicitor from Salford wondered what could be done about ‘phoenix CMCs’, while Susan Jones from the Insurance Fraud Bureau accused CMCs of ‘inventing hundreds of claims’.
A solicitor who had been in the profession for 40 years described referral fees as ‘potentially the biggest conflict of interest possible’, but conceded that they enable firms to have ‘reasonably sized personal injury departments’ which could share ideas and resources to the benefit of clients.
When the motion was put to the vote, the overwhelming majority of delegates were in favour of banning referral fees –* again.
Thursday 30 April 2009 by Jonathan Rayner
Solicitors are ‘crap at marketing’ and need claims management companies (CMCs) to fill the gap, a delegate told the APIL conference. A debate, ‘Referral fees and advertising – is it too late to put the genie back in the bottle?’, chaired by TV presenter John Stapleton (pictured), aroused strong passions.
The delegate who made the comment said solicitors rely on CMCs to be the ‘front end of their route to market’. A barrister rejected the justification, reminding the conference that the bar prohibits all buying or selling of clients. He said the ban on referral fees should be reinstated. ‘Admit a mistake was made and do a U-turn, like reversing the downgrading of cannabis,’ he said.
Kevin Rousell of the Ministry of Justice claimed the ‘cowboys’ had been driven out of the CMC industry, but what remained was ‘less transparent’ and more difficult to tackle.
A solicitor from Salford wondered what could be done about ‘phoenix CMCs’, while Susan Jones from the Insurance Fraud Bureau accused CMCs of ‘inventing hundreds of claims’.
A solicitor who had been in the profession for 40 years described referral fees as ‘potentially the biggest conflict of interest possible’, but conceded that they enable firms to have ‘reasonably sized personal injury departments’ which could share ideas and resources to the benefit of clients.
When the motion was put to the vote, the overwhelming majority of delegates were in favour of banning referral fees –* again.
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