The RAC this week said it would not rule out introducing referral fees for law firms handling its personal injury claims.

The Gazette revealed last week that Shoosmiths has agreed to pay the Automobile Association what is believed to be a substantial referral fee per case as part of its deal to act as exclusive provider of legal services to the association's customers (see [2005] Gazette, 28 April, 1).



Jonathan Gulliford, head of legal services at the RAC, told the Gazette this week that he was waiting to see how the ongoing review of the year-old referral fee rule turned out before deciding whether his company would follow suit. 'I'm never going to rule anything out,' he said.


At present, the RAC charges its 24 panel firms a flat 'panel membership fee', which Mr Gulliford said falls within the referral fee rule because of the latter's broad nature.


However, he insisted that the fee - which is at different levels depending on the size of the firm - is there to cover administrative expenses, such as IT and auditing, rather than to make a profit.