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Bar attacks LSB over referral fees

6 June 2011

The Bar Council has said it is “surprised and disappointed” that the LSB failed to ban referral fees.

A spokesman said referral fees were “prevalent” in criminal cases, despite not being allowed under legal aid contracts.

Ruling out a blanket ban, the LSB said in its report on referral fees last week that frontline regulators could impose their own bans if they could provide sufficient evidence to explain their actions (see Solicitors Journal 155/21, 31 May 2011).

“There can be no halfway house compromise in relation to advocacy, where the right of the consumer to the optimal choice of representative in court cannot be allowed to be prejudiced by referral fees,” the Bar Council spokesman said.

“This is not a decision that allows greater freedom in the legal services market; it simply allows greater potential freedom for the consumer to be exploited.”

Peter Lodder QC, chairman of the Bar Council, added: “History reveals a lack of any effective regulation of such fees. There is no reason to think that these new proposals will make any difference. The Bar Council will continue to call for their abolition.

“Further, the requirement on the approved regulators to justify any ban on referral fees is particularly alarming. The justification is abundantly clear from the Bar Council’s consultation response and that remains unchanged.

“We will be urging the LSB to look again at its proposals, as we simply cannot understand how they will benefit consumers of legal services, which must be a priority.”

The Law Society had also criticised the LSB’s decision.

Linda Lee, president of the Law Society, said the LSB had “chosen a path which will involve yet more complex regulation of solicitors rather than tackling the middleman charging referral fees”.

She went on: “This is a mistaken decision by the LSB, which has failed to act in the public interest. Its decision will only help those who wish to make money out of consumers but who add no value.”

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