It's time to confine referral fees to the past

The regulation of legal services is in the spotlight once again. Society deserves and wants a legal profession it can trust to act in the best interests of the consumer and the public while maintaining the constitutional principle of the rule of law. There are tensions between those obligations and it is not always easy to meet the high standards we set for ourselves.

The Legal Services Board was created by statute to help in that aim. It provides over-arching regulation of the Solicitors Regulation Authority and the Bar Standards Board. Its purpose, under that statute, is to assist the legal profession to maintain and develop standards in regulation and education and training.

The public does not want or expect public funds to be used for anything other than the proper and efficient provision of good-quality legal services.

An issue which seems to stand out in opposition to that objective is referral fees. The Bar Council has been campaigning against this for some time. It cannot be right that public money is used by lawyers to buy and sell cases among themselves. That is even more acute in times of financial stringency '“ we have to be able to account for the money we are given to provide legal services.

It is increasingly becoming an issue in the provision of advice and advocacy in publicly funded criminal cases.

It would be unacceptable if someone went to their general practitioner and were told that their condition required surgery and they were to be referred to a consultant who specialised in their medical problem, only to discover that the same consultant had only been selected because they were prepared to pay 25 per cent of their fee back to the referring GP. Our taxes are meant to fund the services, not kick-backs to direct their allocation. It means the patient gets the surgeon willing to pay for his case rather than the one best able to perform the surgery.

A black and white issue

The analogy translates well into the legal services market. Both the solicitors' and Bar's codes of conduct prohibit the payment of a fee to obtain work. As well as a regulatory offence, these 'fees' are essentially bribes, as defined by the Bribery Act.

As long as the LSB does not outlaw this, it appears to be a grey area. It is not. It is a black and white issue.

Barristers are used to being called reactionary and backward looking; it makes for a good headline, even if it is a stereotype. It may be that accepting the impact of statutory regulation has not always come easily and there were those who felt that as we had regulated ourselves well we did not need external supervision.

But, within the new regulatory rubric, We have been asking the LSB to act decisively, and in the public interest, on referral fees for some time. We are not the ones standing in the way of progress

Solicitors do not want to be trading in or selling their clients' cases either. They want to be able to choose the right person, in house or out, for the job.

This is a specific area in which regulation can be brought into force that will meet the best interests of the public, the consumer, the profession and satisfy its requirement to support the rule of law.

It is important to see the connection in this abuse of the system to the cuts in fees paid in this area of work. One has brought the other in its wake. That may explain what has happened but even such drastic cuts cannot justify its happening.

Worrying consequences

Both the solicitors and barristers involved in publicly funded work should join in trying to stop this practice. We all suffer if we lose the public's confidence. That would, inevitably, lead to further government intervention, which could lead to a government public defenders' scheme, in which all are salaried and there is no scope for choice on the part of the consumer or the provider.

Canny defendants may eventually realise that their cases are commodities that can be sold either to the solicitors in the current market or to the Bar directly if public access opens up.

It is not too difficult to work out the total disaster that would follow that sort of abuse of the system. Nor would it be too difficult to tally up the number of criminal offences involved on all sides. But, most importantly, this is not 'market forces', it is simply wrong.

Only a minority of practitioners, both barristers and solicitors, are involved. That is still too many.