I come from a depressing, end-of-the-line town called Clacton-on-Sea. You probably stayed there in a caravan once, but had the fortune to leave after a long rainy weekend. Not me, I was stuck there, with just candyfloss and those two-penny machines to see me through to 18.
Now, I’m allowed to say what I like about Clacton. But if any outsider ever dares do the same, they’ll have me to deal with. (Not much admittedly, but it sounds threatening.) Which brings me (and stick with me on this one) to referral fees.
This week poor David Fisher’s ears must have been red hot, for he has been the talk of the legal world. The AXA manager spoke only for a few minutes at a parochial Commons meeting on insurance, but his words lit the blue touch paper.
Fisher alleged that some personal injury firms are still paying referral fees for work and ignoring the SRA-policed ban.
There have been two markedly different responses. The first lot, from comments below the story, was full of fury towards Fisher – how could he possibly know? Where’s his evidence? Mind your own bloody business! My Twitter timeline told a different story – most solicitors reacted with a weary indifference. A collective ‘well duh’, if you will. Of course there are some still paying for cases – how naïve would you have to be to believe otherwise?
Is this the ‘Clacton syndrome’ at work? Do solicitors resent being told home truths if they come from an insurer on the outside? I have no evidence whatsoever that any firms are paying referral fees – why would there be any? There aren’t many unlawful activities that are carried out in the full glare of publicity. But will some be ignoring SRA rules? You’d have to guess so.
After all, plenty paid referral fees before they were legalised in 2004, and that was before the PI sector had grown so accustomed to using them as a crutch.
These are desperate times, and some will turn to desperate measures. If the penalty from the SRA is being struck off, what does it matter if your business is likely to fail anyway? The SRA has approached the business of policing the ban with all the enthusiasm of a teenager flipping burgers for minimum wage. Once there’s an inkling you’ll get away with it, some will take the chance.
The truth is there are plenty of firms paying into collective marketing schemes or joint advertising pools or group work-grabbing initiatives, or whatever euphemism you want to use. They’re all lawful but they’re propping up the same system as pre-ban. Ditto with the insurer-claimant joint ventures, in which all the profits that came from the referral fee conveyor belt are retained but behind a cloak of respectability.
Too often the claimant lobby has suffered from wilful blindness to the rogue elements in its midst. Too often it has defended the indefensible, leaving the government the easy job of lumping everyone in together and creating LASPO. If Fisher was talking rubbish, let him. But if there was any element of truth to his claims, it’s up to everyone in the industry to be honest and admit it.
I may deny Clacton is a sinkhole ‘til I’m blue in the face, but that doesn’t mean it’s not true.
John Hyde is a Gazette reporter
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