A law firm and two solicitors have been fined for allowing payment of referral fees long after the practice was banned.

Imran Rashid and Hafizah Begum, from Greater Manchester firm Adamsons Law, continued paying for claims for 21 months after referral fees were prohibited In April 2013.

The Solicitors Disciplinary Tribunal heard ledgers for ‘marketing fees’ actually recorded that individual payments were being made to introducers, and agreements were made whereby money was paid where the client had signed a retainer. Terms of business were finally changed from March 2016.

The firm was also found to have instructed medical agencies to carry out checks on clients which were directly linked to the introducer who referred the client.

However, the tribunal decided that Rashid, the director and sole shareholder, had not intended to breach the rules and that he relied on others to ensure the correct procedure was followed. Rashid told SRA investigators these were not intentional breaches of the code of conduct and that, if anything, he took steps to reduce the element of risk.

He denied initiating contact with third parties to send work to the firm and believed he was acting in compliance with the terms of the ban. Since the misconduct was uncovered, Rashid stated that his firm had since been visited by the SRA and was found to be compliant.

The tribunal said Rashid had allowed the payment of prohibited fees but that the level of harm was low,

Begum, whose family had invested £80,000 into the firm before she was appointed head of personal injury, pleaded that she was inexperienced and naïve. and trusted people within the firm with more knowledge of the rules. She confirmed she had received no training on referral fees, had no authority to make payments, and believed her firm’s marketing spending to be legitimate.

The tribunal said her level of culpability was higher than that of Rashid, and she was financially motivated to ensure she introduced more cases to the firm. It said she was responsible for knowing current legislation and capable of running the department, but had not acted intentionally and no harm was caused.

Both individuals were fined £5,000 and the firm was fined £2,000. The firm and Rashid must each pay £4,000 costs, while Begum must pay £16,000.