Barristers have reacted furiously to the potential introduction of referral fees in criminal work. Referral fees in crime would ‘corrupt’ the market and reduce standards, they argue.
The Solicitors Regulation Authority’s April consultation on cutting red tape, ‘Improving regulation: proportionate and targeted measures’, asked whether the ban on making payments to introducers of legal aid customers, or those who are the subject of criminal proceedings, should be retained.
It cited ‘economic imperatives’ potentially arising from the dramatic changes that have taken place in the criminal market over recent years.
In particular, solicitors and solicitors firms are now more involved in advocacy, while some expect to see barristers’ chambers delivering criminal services beyond advocacy.
In its response to the consultation, the Criminal Bar Association (CBA) said the payment of referral fees goes ‘against the interests of vulnerable clients, the rule of law, the administration of justice and public interest’.
The association said it was ‘concerned’ that the SRA ‘thinks it is appropriate even to consult on this issue’.
‘The payment of referral fees is no more than a system of buying and selling cases – and ultimately of treating clients as a tradeable commodity,’ it said.
‘Given the tight margins, the inevitable consequence of permitting referral fees to be paid would be a reduction in the quality of the service provided. While this might suit the commercial interests of the parties to the referral fee, such an arrangement cannot be in the interests of the public or the user of the service.’
The CBA said there was ‘no justification’ for using public money to create a ‘secondary market’, and warned that removing the ban would increase demands for payment of referral fees at other stages in the provision of legal services.
‘The CBA is aware, anecdotally (because no one has yet blown the whistle) that instructing solicitors have demanded payments from counsel to secure instructions in better paid legal aid cases,’ it alleged.
The Bar Council joined the criticism. Alistair MacDonald QC, the chair, described referral fees as ‘nothing more than a kick-back’.
‘It is difficult to see how the payment by a solicitor of a referral fee to secure instructions is compatible with his or her duty to act independently in the client’s best interests and not to act in a manner that is likely to diminish public confidence in the legal profession,’ he said.
‘The payment of referral fees conduces a state of affairs in which cases can be sold to the highest bidder. These are public funds. Such bartering should have no place in a properly regulated system.’
The CBA insisted there still remains ‘a vital distinction’ between the role of litigator and advocate, adding that lifting the ban would ‘poison all publicly funded criminal work’.
It wants referral fees, which exist ‘solely to benefit solicitors’, to be banned altogether.
The SRA consultation itself alluded to allegations that referral fees are already being paid directly or indirectly – for example, to acquire advocacy cases or to ‘swap’ multi-handed cases. The regulator said it had seen little evidence of this, but the CBA responded: ‘Anecdotal evidence suggests the practice of ‘swapping’ cases among solicitors is widespread in most multi-handed trials.
‘If the SRA is serious about rooting out improper behaviour, is should simply sample multi-handed cases across the nation. We suspect [there are] many examples where firms of solicitors become involved that lack any reasonable connection to place or client, or indeed any particular or specialist expertise.
‘To the question “why was such a firm instructed?” there may be no easy answer.’