When did lawyers become less reputable than insurers?
The government has announced that lawyers and claims firms are to be banned from offering incentives such as free tablet computers to encourage people to make insurance claims. It might come as a surprise to the government that it has never occurred to me to offer cash or computers to prospective clients (nor, I suspect, has it occurred to you).
It is difficult getting paid, let alone paying for the work. The unfortunate thing about this headline from the government is that lawyers once again are all accused of making false claims and raising the public’s insurance premiums. When and how did lawyers become less reputable than insurers?
I was approached this week by a company that wanted a referral fee for introducing new clients. It seemed to be an attractive deal with lots of enthusiastic new clients willing to pay large costs and all I had to do was pay for the work. This coincided with me beginning to look at the annual delightful task of renewing the indemnity.
Like Christmas it seems to come earlier and earlier, but when I look at my diary I was thinking the same at this time last year. We are told that, like car insurance premiums, it should decrease. Perhaps there will be an independent panel of experts to dissuade unhappy clients from suing us or videos of how clients have made false claims against lawyers. Perhaps not.
One of the many questions you are asked on the forms is if you have any referral fee arrangements. I always have said no because, well, the answer is no. I hastily looked online and found that although referral fees are banned for personal injury claims they are not for other types of law. Why are they not banned? The Law Society, to be fair, has called for the ban to be extended.
Back in 2011 it said: ‘The Society is, however, disappointed that the ban will not be extended more widely – for example into the area of conveyancing. The Society believes this approach is short-sighted and does not recognise the clear potential for consumer detriment that exists in respect of one of the most important transactions most people make in their lives… Referral fees are not in the public interest.’
I suppose some firms have done very well from referral fees. Money well spent if only a few firms pay for clients. But once the majority of firms do it, the only people making a profit are the referral companies and tablet computer manufacturers.
David Pickup is a partner at Aylesbury-based Pickup & Scott