Patrick Allen rallies against anti-referral fee rhetoric
The proposed ban on referral fees is a profoundly anti-consumer measure, based on prejudice and the interests of insurers, which cannot be justified by the facts or practicalities.
Contrary to the spin from the Association of British Insurers, referral fees are not paid by insurers or clients and are not a recoverable item in the bill of costs of a successful claimant. They are a marketing overhead paid by some solicitors to acquire work. If solicitors could acquire that work more cheaply in their own marketing campaigns, they would do so. However, they mostly lack the expertise and reach, which comes with big spending, to operate in a highly competitive market.
Evidence about the workings of referral fees was painstakingly gathered by the Legal Services Board (LSB) between 2009 and 2010. The LSB could find no detriment to consumers in the payment of referral fees, only benefits. Referral fees have played an important part in freeing up the personal injury market, by providing information about claims, and assisting injured people to make contact with a lawyer. The
