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SRA's warning over unethical referral arrangements

28 February 2007

The Solicitors Regulations Authority (SRA) has sent out 130,000 warning cards to solicitors in England and Wales this week to remind them that will face disciplinary action if they make unethical referral arrangements.

The warning card carries a checklist of questions that solicitors should ask themselves about their referral arrangements, such as, "Am I being up-front with my clients about the nature of these payments?" and "Am I able to advise my client independently without fear of offending the introducer and at the risk of losing a valuable stream of work?"

The SRA explained that the cards highlight how improper referrals can cause damage to public confidence. It also warned solicitors of the need for transparency and disclosure when they are making payments to introducers of work.

Peter Williamson, chair of the SRA Board said that those solicitors who allow referral arrangements to undermine their role as independent advisers "let down their clients and the profession".

He commented: "Public confidence in solicitors has been damaged by a number of cases in which solicitors have placed their own advantage above their clients’ interests. The SRA is determined to stamp this out."

The Law Society said that it is also supporting the SRA’s campaign so that solicitors are clear on the operation of the referral fees rule. "It is useful that the SRA is providing this reminder to help solicitors ensure their practices meet the requirements of the code," said Fiona Woolf, president of the Law Society.

The warning card is part of the SRA’s information campaign to protect clients by boosting compliance with the rule. A programme of investigation and enforcement, including visits to firms known to operate referral arrangements, is also underway. Information about the rules on referrals can be found at www.referrals.sra.org.uk

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Risk & Compliance Regulators Financial services & Tax Contracts & Rights