LLS Blog: Steve Cornforth discusses whether referral fees should be expanded or abolished.

The Law Society thinks so. In November 2009 they voted to lobby for the abolition of the fees.

This reversed the previous policy which was in favour. Whilst the Law Society cannot force abolition they are certainly an influential voice.

The argument against referral fees is that they limit choice and cannot guarantee quality.

So if somebody suffers an accident, their case could be handled by the firm willing to pay the highest fee, which does not mean that they are the ones best equipped to deal with the matter.

There is no doubt that a whole industry has grown based on gathering and selling cases.

On the other hand, there are those who will argue that they increase access to justice.

Despite statements about a "compensation culture", it is still a minority of victims of accidents who pursue claims.

This might be through fear of the legal process or ignorance of the right to claim. It is argued that a claims management company which acts as a "go-between" can increase awareness, meaning that justice becomes more widely available.

It will be interesting to see how this argument develops.

My own view is that banning of referral fees is unlikely in the short time.

In 2011 we will see the arrival of Alternative Business Structures under the Legal Services Act 2007.

This means that major corporations can own law firms - so called Tesco Law. Won't they see the buying of work as part of the normal world of business? Or does the very thought of that make us want to get rid of referral fees as soon as possible??

Discuss!

* Steve Cornforth is deputy managing partner of EAD Solicitors