The Solicitors Regulation Authority has warned firms there will be ‘no transitional period’ after the referral fee ban comes into force next Monday.
The regulator today published guidance and support for personal injury firms trying to adapt their business models to get work without paying for referrals.
The authority has also confirmed that case studies on compliant models will be made available as and when they are reported, but it has again stated that it will be firms’ own responsibility to make sure they are compliant with the new rules.
Agnieszka Scott, SRA director of policy, said: ‘There are so many possible variations of how referrals could work and an infinite number of business models; some will be compliant, some will not. It will therefore be for individual firms to review their current business models and identify whether they are compliant with the ban.’
Scott said those with concerns about their firm's ability to comply with the ban or about the impact the ban will have should contact the SRA so risks can be identified and managed at an early stage.
‘Firms need to remember that the ban comes into immediate effect on 1 April. There is no transitional period,’ she added.
The SRA is enforcing the ban through two new mandatory outcomes, which will be found in chapters six and nine of the Handbook, and which state that ‘you are not paid a prohibited referral fee’ and that ‘you do not pay a prohibited referral fee’.
On top of the two new outcomes, the code of conduct will seek to define referral fees, while indicative behaviours illustrate how the outcomes can be achieved, avoiding the need to include detailed prescriptive rules.
But speculation is already mounting that firms relying on work from referral fees are preparing their own models to get around the ban.
Deputy costs judge Mark Friston tweeted last week that he had seen five ‘workarounds’ that were ‘enough to satisfy me that it can properly be argued that payment is not for a referral’.
But Kerry Underwood, founder of Hertfordshire firm Underwoods said firms had yet to realise ‘the game is up’ with regard to referral fees. ‘Staggered at firms who think referral fee ban is something to be got round. They are banned,’ he tweeted.
The guidance and support is available on the SRA's website. The rule changes will be in the seventh version of the SRA Handbook, due to be published next week.