The tedious discussions regarding whether referral fees are right in principle or unacceptably distort the market will undoubtedly continue ad nauseam.

The views of the various parties are so entrenched that it seems unlikely an acceptable common ground will ever be reached. If the situation is to be changed, legislation will undoubtedly be required.

Whatever the rights and wrongs of the matter, there is one area where the market is being distorted.

I had a client who came to see me on a personal injury matter and upon investigation it became apparent he had legal expenses insurance.

The client was an intelligent man who gave me clear and concise instruction and (apparently) had no difficulty understanding my advice.

I explained the effect of the Insurance Companies (Legal Expenses Insurance) Regulations 1990 relating to the client’s right to choice of solicitor.

The client contacted the insurer to notify them of his claim and, in the course of a lengthy conversation he became very confused and in the end became convinced - as a result of what he had been told - that he had no choice but to use a panel solicitor, whatever the circumstances of his case and throughout all stages of the proceedings.

When I contacted the insurer the claim department agreed that I had given the client correct advice.

At the least, the insurer had failed to give the client a clear understanding of his rights so that he knew where he stood, and at worst the client had been misled.

If this was an isolated incident then I would shrug it off, but it is not. It would appear as if the desire on the part of the insurer to secure the referral fee the panel solicitor will pay causes that insurer to give confusing or wrong advice.

I have no objection to the insurer doing its best to secure a high level of referral fee income (although I am opposed to referral fees in principle), but misleading their client is unacceptable.

If a client chooses to use a panel solicitor, fine, but they should do so on a clear understanding of their rights and the commercial imperative of the insurer.

Howard Shelley, QualitySolicitors CMHT, Walsall