CLC review finds no justification for ban on conveyancing referral fees

A review by the Council for Licensed Conveyancers has concluded that there is no justification for a ban on conveyancing referral fees.

"An outright ban on all referral fees that some have called for could not possibly be justified in relation to conveyancing on the evidence," Anna Bradley, chair of the CLC, said.

"We proposed, and the LSB has granted, a proportionate regulatory response in the form of additions to the transparency requirements already in place."

Bradley said the CLC's review found no evidence of consumer detriment through the lack of a ban, an assessment shared by the LSB and its consumer panel.

Following a consultation earlier this year, Bradley said the CLC "determined that the biggest threat to consumers posed by referral arrangements was the level and timing of information given to its consumers".

As a result, she said the CLC had made additions to its disclosure of profits and advantages code to ensure that referral fees were managed by licensed conveyancers in an "open and transparent way".

These specify that agreements with third-party referrers should be in writing and subject to periodic review and clients should be informed in writing of the arrangement's existence no later than when accepting instructions, or when introducing a client to another person.

Clients should also be told that they have a choice of provider and informed of the nature of the arrangement, including any payment, with whom it is made, and any impact, including on the legal costs they are charged.

Licensed conveyancers will have three months to comply with the code following its publication.

In its decision notice on the rule change application, published today, the LSB said it was pleased that CLC was introducing requirements that will make referral and fee sharing arrangements more transparent for clients, reflecting the board's own guidance.