Sponsored Guest Post: The Real Impact Of Changes To Referral Fees

The Real Impact Of Changes To Referral Fees
BY Loyalty Law
Whilst all solicitors are rightly focusing on the impact that banning referral fees will have on their business model; namely going from a steady supply of new client leads to suddenly having to generate all new enquiries themselves, there are other perhaps even more important matters to consider.
I believe that the biggest problem with these changes will come some months after the new rules (whatever they are when they are finalised) have been put in place. At the moment clients can make a claim following an accident and keep all of their compensation which I believe is the only fair model. After all, one day a victim is minding their own business, the next someone has injured them and their life might be changed forever through no fault of their own, so why should they then suffer financially too?
However, Jackson believes that the claimant should have a financial interest in the claim, so is suggesting that any after the event insurance premium, and the success fee (capped at 25%) should be paid out of the claimant’s compensation. So in future the court or a negotiated settlement will tell a victim that they need £500,000 compensation to rebuild their life, and then if Jackson gets his way in the very next breath up to £125,000 will be taken straight off the victim to cover legal fees. Clearly that is not fair.

However, that is just one small part of the problem, because in my opinion with a few months of this system coming into place, the press will start attacking solicitors for taking compensation from these innocent victims. They will not be interested in the fact that it was the Government who changed the law to make this happen. They will have no concern that the success fee is designed to compensate you for running every case without payment of your legal fees until the end of the action, or that it is also designed to cover all of those cases that you run to trial but which ultimately fail, leaving you with absolutely no payment for all of your time and effort.
No, all they will care about is making sure that no solicitors ever charge a success fee, leading to a huge reduction in the number of firms who can act for accident victims, and a dire reduction in the quality of service available for personal injury clients.
Loyalty Law for whiplash claim compensation, accident and injury claims experts


One thought on “Sponsored Guest Post: The Real Impact Of Changes To Referral Fees

  1. Everyone talks about referral fees in civil claims, but we need to remember the dubious practice of solicitors selling criminal clients to one another for a slice of the (legal aid) fee – and barristers giving some of their fees to solicitors to get a brief. It’s against the rules but fairly widespread, only no one wants to take action. It’s corrupt, anti-competitive, and probably an offence under the Bribery Act.

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