Many will applaud the SRA's crack down on referral fees, but how will it be policed?
The right-thinking among us may have been tempted to applaud the announcement by the Solicitors Regulation Authority that it intends to “name and shame” the miscreants of the profession. In a bold, unprecedented move, the SRA says that it will publish details of a law firm’s complaints history on its website. The purpose, evidently, is public edification. “This is all about bringing in a new culture,” declared Anthony Townsend, the authority’s chief executive. “It is about professional regulation in the public interest, and not professional regulation for the profession.”
Townsend’s organisation appears to have put its money where its Stentorian mouth is. Minions were tasked with sending out so-called “warning cards” to the solicitors of England and Wales. There are some 100,000 solicitors in England and Wales, and each has apparently received a warning card reminding them that they face disciplinary action if they fail to disclose kickbacks paid to estate agents, insurance companies and others for referring work.
This brave new world does not stop at so ambivalent a frontier. The SRA will despatch teams of inspectors to roam the nation, their brief being to check that the law firms are playing by the rules. The emphasis seems to be on rehabilitation rather than excommunication, courtesy of the ancient device of public humiliation. “We are moving into quality assurance, not drumming villains out of the club,” Townsend says.
Interestingly, the SRA does not believe that referral fees should be banned per se. This would be far too Draconian. Instead, Townsend would like solicitors to ensure that they disclose the existence of referral fees to the public. It is this, presumably, that will be the first thing on an inspector’s mind should he knock at your door.
Now, far be it from me to cast doubt on the SRA’s noble scheme, but it strikes me that it has one or two flaws. The first is one of policing. Just how skilled will these inspectors be? I assume they will be kitted out in appropriate inspector’s regalia, but in this day and age, mere sartorial elegance is only half the PR speech. It will be no good knocking on a law firm’s door, one tucked away in the Welsh valleys, brandishing a copy of a warning card and wearing on gumshoe’s hat if a quiet “No, the senior partner’s not here, please come back in three years” will see them off. These people will need tenacity, they will need nerve, and most of all they will need a map.
No doubt the SRA has thought of this, and so my fears will be unfounded. However, may I suggest, by way of anticipating a second potential flaw, that the inspectors are hewn from the ranks of disgraced lawyers, those whose always-so-curiously-inoffensive names appear in the Gazette as the struck off and the suspended? Surely there can be no better gamekeeper than a poacher who has become an SRA inspector.
Assuming, therefore, that the inspectors are ex-lawyers and that they are armed with a map and oodles of raw nerve, there remains one last problem. Even if they successfully penetrate their quarry’s lair, amass evidence and promulgate Townsend’s desired public reprimand, the SRA will still have to deal with the libel lawyers. These people, for whom very few publications to third parties are free of legal risk and whose client base has been known to include their brethren, could rack up fees to the tune of 100,000 first-class postage stamps quicker than the time it takes to say: “Shouldn’t the profession be questioning the ethics of a referral fee system in the first place, rather than spending money issuing warning cards and sending out teams of elite inspectors amid the luxuriant Welsh valleys and the fields of England’s green and pleasant land?”