Friday, 15 July 2011

The Referrals Industry needs to be cleaned up not banned

The government is worried the current referral system has created a US-style "compensation culture", in which people are encouraged to launch frivolous claims by law firms who have bought their contact details and are offering to work on a "no win, no fee" basis.

Those in favour of a ban say it would force lawyers to win clients purely on the basis of quality and cost, as well as bringing legal fees down.

However a ban will make it harder for less well off people to gain access to justice, particularly if law firms are banned from working on a "no win, no fee" basis.

Handled correctly, the referrals system is a useful marketing tool for lawyers, and nothing more sinister for consumers than a form of targeted advertising.

The problems are occurring from unscrupulous claims management companies, who are illegally selling on details without the authority to do so. In this respect the industry needs to be cleaned up. 

However many insurers provide a valuable service in terms of quality control. service delivery and best practice for panel solicitors, which ultimately benefits the Client.

With Law firms having to work so much harder to stand out from the competition, something that is only going to get more difficult with the launch of the legal services act in October, it doesn't seem  fair  to ban a legitimate and successful marketing tool.

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