The Solicitors Regulation Authority will try to appease firms worried about the lack of ‘safe harbour’ advice on coping with the ban on referral fees by publishing genuine case studies of acceptable business models.
The regulator last week repeated it will not pre-approve models that may flout the ban, which comes into force in April.
The offer of case studies drawn from real examples that have been investigated by the regulator follows calls for more clarity from the profession.
Executive director Richard Collins told the SRA board: ‘It’s very clear that the government struggled to define what a referral fee is. The range of possible arrangements is pretty much infinite and it’s simply not possible for us to come up with a set of words which would give absolute clarity.’
Some of the 49 respondents to the SRA’s consultation wanted it to pre-approve arrangements before the ban. In its response, the SRA said it would rely on the flexibility of outcomes-focused regulation to police the ban.
Definitions of ‘prohibited referral fee’ and ‘payment’ will be added to the SRA Handbook in an effort to clarify what is allowed under legislation.
The Ministry of Justice said the ban on referral fees in personal injury must go ahead in April, amid concerns about the rising costs in litigation.