I read with interest that the Legal Services Board commissioned an ‘economic analysis’ which concluded there was no evidence that referral fees harm consumers.

In 2008 we were offered the chance to be on a ‘panel’ for a building society-owned estate agency. The basic premise was that we were to pay £200 per conveyance, of which £100 was kept by the ‘panel manager’ and £100 was paid by the ‘panel manager’ to the building society’s estate agency.

We were assured, however, that by the time the various 'add ons' were taken into account, their conveyancing fee structure would ensure we made just as much profit.

On a typical transaction the scheme was 16% more expensive than Bell Park Kerridge charges.

My 'economic analysis' was that the clients were paying 16% more, and the solicitor was having to pay £200 to an unnecessary link in the conveyancing chain.

Yesterday I read my son’s copy of The Negotiator (28 May 2010), which is a magazine for estate agents. My attention was drawn to an article titled ‘HIPs are gone. Long live HIPs’.

The author (the managing director of an estate agency) argued that agents could still market HIPs to certain clients. I quote: ‘But who will pay the HIP fee? There are two opportunities here. First, find a conveyancer or solicitor prepared to advance the pack in exchange for a new client. You may also receive commission.

Second, what better way of justifying a rise in your commission level? While the cost of a HIP may represent between 5% and 10% of your commission, if you add in a few other service enhancements, it is surprisingly easy to double your fee if you know how to present your case, thereby making the cost of a HIP a worthwhile investment.’

It costs around £55 for an Energy Performance Certificate, and around £146 for a personal local search and drainage search. If solicitors are prepared to pay around £200 to get work, where the typical fee might only be £400, I have to wonder – what gives?

Is the solicitor going to stay in business long? Are there going to be short cuts in the legal work which will lead to claims? Is the solicitor's independent judgement being compromised?

It would appear I am in a minority in finding referral fees to be just plain wrong. However, it is a sizeable minority.Is it time for a split profession, where those who wish to pay referral fees can do so, leaving the remainder to get back to basics and look after clients?

James Bell, Bell Park Kerridge, Carlisle