The Solicitors Regulation Authority (SRA) reports that the level of compliance in relation to referral arrangements remains low. Antony Townsend makes plain his disappointment (see [2008] Gazette, 6 November, 1). It appears that the SRA does not understand why this is happening. We believe we do, and that the reason, and the SRA’s lack of understanding, show the widening gulf between regulator and regulated – but that is a debate for another day.

We also note, as is normally the case on this issue, that nothing is said as to whether any prejudice was caused to clients; that is, whether non-compliance really made any difference at all – but that too may be a debate for another day.

In the meantime we can fix it.

We have all had our pink laminated cards indicating that the SRA is ‘cracking down’ and that does not seem to have worked. Is it time to spend resources rather more constructively? The solution to non-compliance in relation to referral fees can be described in a single sentence: Send Out Compliance Packs.

A compliance pack would contain:

  • A model standard adaptable clause for insertion in every written agreement with introducers recording the obligations and commitments of the introducer to ensure regulatory compliance;
  • A flexible template for disclosure of the arrangement by the introducer to its customers, to be used in brochures, leaflets, letters or as a script for call centres;
  • A similar template for disclosure by solicitors to their clients;
  • A draft protocol for insertion in the office manual, adding to client-care checklists and the like, establishing modest and proportionate systems for monitoring compliance by the introducer and reviewing the arrangement;

And that’s it.

We have been giving advice and offering drafts of this kind to clients of ours since 2004, and in modified form since July 2007.

If the SRA truly has a will to encourage compliance by helping solicitors to get it right (as distinct from expending resources to penalise solicitors for getting it wrong) and/or if the Law Society is motivated by a desire to support and guide its members to minimise the risk of falling foul of the rules, the race will be on.

Will it be Chancery Lane or Leamington Spa that will first give practitioners this help?

Will it be the SRA Referral Arrangement Guidance Pack, or the Law Society Practice Note on Referral Arrangements?

Will they perhaps combine and provide a joint compliance pack?

To adopt this suggestion may require a change of mindset from one or both organisations. If so, this might be to the benefit of the profession. And in the meantime, if anyone in Leamington Spa or Chancery Lane needs a bit of help with the drafting…

Andrew Hopper QC and Greg Treverton-Jones QC, Authors, The Solicitor’s Handbook 2008