Government to wage war on referral fees between solicitors and barristers

A statutory ban on referral fees in criminal cases is among new proposals announced by the government at the start of the new legal year.

There are concerns in the legal profession that fees paid by advocates in exchange for instructions are more prevalent than previously thought.

The government believe the practice is widely abused by law firms who refer clients to advocates with whom they have a financial relationship, which denies clients the choice of barrister.

The government has issued a consultation paper setting out a package of measures to ensure the quality of criminal defence advocacy, reducing the influence of financial incentives on choice of advocate, and support clients' rights to make an informed decision on who should represent them.

Following concerns highlighted by Sir Bill Jeffrey in his review of independent criminal advocacy in May 2014, the government is seeking views on a panel scheme of publicly funded criminal defence advocacy; a ban on referral fees; and stronger measures to ensure client choice and prevention of conflicts of interest.

These measures seek to address the level of disquiet among judges and practitioners over the standards of advocacy, found in the Jeffrey report. Sir Bill also suggested that the market was not operating competitively so as to optimise quality.

Launching the consultation, the justice minister, Shailesh Vara, said: 'This government is determined to ensure we continue to have vibrant and effective advocacy in our courts. That is why we cancelled proposed cuts to criminal legal aid for barristers earlier this year, and today we are going further.

'The payment of referral fees to secure instruction is unacceptable - which is why we want to change the law in order to tackle this issue. The guiding principle in advising clients on their choice of advocate must always be the competence and experience of the advocate - rather than their willingness to pay a referral fee.'

The Bar Council has welcomed Ministry of Justice's (MoJ) consultation, with its chairman, Alistair MacDonald QC, commenting: 'We have been calling for an effective ban on referral fees for some time. We welcome these proposals to preserve and enhance the quality of criminal advocacy, for which we and others (including Sir Bill Jeffrey) have been calling for some time.'

He continued: 'We shall study the proposals very carefully including the proposal to introduce a panel for publicly funded advocacy. Any such panel will need to be independent of government if it is to satisfy the public interest and command the support of the legal profession. The Bar will be constructively engaged in the consultation on these important proposals.'

The Lord Chancellor, Michael Gove, said he wished to tackle the issue of referral fees earlier this year when he told a gathering of judges that such 'inappropriate payments' would not be 'tolerated'.

Responding to the announcment, president of the London Criminal Courts Solicitors' Association (LCCSA), Jonathan Black said he was 'appalled' that as hundreds of solicitors firms awaited to hear about whether their futures were secure the MoJ deem deemed it appropriate to 'dance to the tune of those who see referral fees as a major issue'.

'The LCCSA and CLSA have consistently agreed that referral fees are not an appropriate in the criminal justice system,' said Black. 'We need to ensure that they are defined fairly in any response to consultation. We have only heard limited anecdotal evidence of its existence from those that raise this complaint with the MoJ.

'It is significant that while the MoJ feel able to cut access to justice and close down firms without primary legislation they will need legislation for this. We note  with disappointment that once again, Mr Gove in his forward  makes overtures as to the need for quality advocacy while dismissing the genuine concerns as to the quality of representation as firms race to the bottom after the implementation of the new contracts. He has clearly been led to believe that in the post duty contract landscape, the bar can only survive with the implementation of such measures.'

Black added that while the government's proposals arise out of concern over the future of the Criminal Bar, little was being done to ensure the security of those hundreds of firms and their staff that were likely to go to the wall next year following reforms to legal aid.

'Given the personal impact that this will have on many as they lose their livelihoods in the name of austerity, we would suggest  that the MoJ focus on that rather than rare arrangements which probably affect 1 per cent of the budget and complained about by a disproportionately small minority who seem to have the ear of Gove,' remarked Black.

John van der Luit-Drummond is deputy editor for Solicitors Journal
john.vanderluit@solicitorsjournal.co.uk | @JvdLD