A claims management firm says it has signed up almost 100 legal practices to a business model designed to sidestep the impending referral fee ban.
Chris Georgiou, managing director of Accidents Direct, said he has spent 18 months refining a panel scheme which he says will not breach the referral fee ban as it stands.
In the scheme, firms pay a flat annual fee of £40,000 to have claims referred to them by Accidents Direct – but crucially there is no payment related to individual claims nor is there a set number of specified claims. Panel members also pay £2,000 per share for a maximum of 15 shares in the business.
The Solicitors Regulation Authority, which will police the ban when it comes into force in April, last week indicated that models where a third party is ‘paid per client’ would amount to a referral fee. But group marketing schemes that reflect the actual cost of advertising would be allowed.
‘Everything we’re doing is clean and transparent,’ said Georgiou. ‘The SRA don’t mind solicitors pulling together and having an annual set fee. The government are not targeting professional firms like ourselves but people dressing up a marketing fee.
‘We don’t do any cold calling and our firms are legitimate. We’re not damaging the industry.’