UK Law Society To Hold Postal Ballot On Referral Fees

by Robin Pilgrim, LawAndTax-News.com, London

27 July 2004

Following a vote held at the UK Law Society's annual general meeting last week to decide whether a postal ballot on the Society's decision to lift a ban on referral fees should be held, it has emerged that a motion to allow the ballot was passed by 60 votes to 40.

In January, the Law Society voted by a 43-34 majority in a council meeting to allow the payment of referral fees by solicitors. This represented a significant victory for advocates of reform within the legal profession, and was welcomed by many, who argued at the time that the Law Society was more likely to be allowed to continue in a recognisable role following the government's review of the legal sector if it approved the modernising proposal.

Under the new regime, solicitors would be permitted to enter into agreements with other businesses such as estate agents, banks, and marketing companies for the introduction of new business. However, a group of 45 Law Society members, led by council member for sole practitioners, Tim Readman signed a motion earlier this year condemning the lifting of the ban, and calling for a postal ballot in order "to test the profession's acceptance of these decisions".

Arguing against the postal ballot last month, president of the Law Society, Peter Williamson told the Law Gazette that:

"The new rules on referral fees offer increased protection for the public and greater clarity for the profession. They have been determined after full consultation and were agreed by the Master of the Rolls."

However, despite the Council's objection that a postal poll "would reflect poorly on the Society's credibility as a regulator acting in the public interest", a vote on the reintroduction of a referral fee ban is set to take place in the short to medium term, although no definite date has been set.

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