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SRA Calm Referral Fee ban fears

The Law Society Gazette has reported that the SRA have moved to calm fears over interpretation of LASPO in relation to the forthcoming ban on referral fees in PI cases.

Richard Collins, Executive Director of the SRA has been reported to have announced that, although the SRA will not give ‘Safe Harbour’ advice to firms seeking to compy with the new ban on referral fees in PI cases, it is intended to produce case studies in the SRA handbook that will give examples from real examples schemes that have been investigated by the regulator.

Mr Collins said to 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.’√جª¬ø

On 20.3.13, the SRA published the consultation on the Referral ban, which concluded that there was a lack of clarity in respect of LASPO.

‘It is clear from the responses that there is scope for interpreting the provisions in LASPO in different ways and that there is some lack of clarity about which practices and business models which might be affected by the ban, particularly in relation to issues such as “pooled marketing resources” and payments for services. Many respondents felt that the SRA should provide clarity, either through prescriptive rules or detailed guidance describing exactly the kinds of arrangements that will or will not be acceptable.’√جª¬ø

Examples are given at http://www.sra.org.uk/sra/consultations/referral-fees-2012.page#part-4√جª¬ø

In order to deal with the confusion, some guidance has been given and an enforcement strategy has been produced at Part 4 of the consultation. This makes it clear that the overriding principles in the Code of Conduct 2011,  chapters 6 (your client and introductions to third parties and chapter 9  (Fee sharing and referrals) will apply. It is clear that transparency is the key consideration, together with independence and professional judgment.  


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