No tears for fee-ban victims

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My goodness, the SRA is pushing things tight on the referral fee ban.

This week saw the consultation published for the nature and scale of the ban and how exactly the regulator chooses to enforce it. The consultation will be done by Christmas, before a series of regulatory box-ticks culminating in the final guidelines finished and laminated by March.

We hope. This is, of course, the SRA, an organisation with a record of time-keeping that suggests it would be late for its own funeral. Even the publication of the consultation was a day overdue – caused, we are led to believe, by the board members being absent on an away day last week.

But let’s not lay into the SRA too much (calm down at the back). This timetable of course, was not theirs – it was the government that shoe-horned the referral fee ban into the Legal Aid, Sentencing and Punishment of Offenders Act, which got royal assent in April this year. It was also the government that insisted on next April to implement it, clicking its fingers to see how high the SRA could jump.

There’s no doubt this reform will leave those relying on referral fees (either law firms needing clients or insurers selling their own customers’ details) in something of a bind. They will have, at best, a couple of weeks from the final rules being set to the ban coming into force.

Well boo-hoo for them. You’ll have to excuse me if I don’t break down in tears at the prospect of referees and referrers in a spot of bother. This is, after all, an industry which has blighted the legal profession, turning claimants into commodities and encouraging the worst kind of practice.

And the argument about lack of time to prepare is spurious at best. The ban was announced in September 2011. The terms have been set down this week and are fairly comprehensive. And it’s not as if they come as a surprise.

If you buy clients’ details from insurers, you’re breaking the rules. If you’re paying a claims management company for every 10 cases they bring your way, it’s outlawed. These are referrals and you’re paying a fee. What’s so complicated about that?

Lawyers can take heart from the leeway the SRA guidance offers them. Group marketing and schemes were always likely to fall outside of scope and so it has proved. There is nothing to stop you forming an alliance with other local firms, pooling resources and sharing out the clients that come your way. Equally, if a person has told a marketing company or website they’re happy to pass on their details, there’s nothing to stop law firms picking them up.

Yes the timetable for this ban is a rush job. And yes there will be some businesses struggling to cope with the effects. But let’s not lose too much sleep worrying about them.

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