Tuesday, January 19, 2010

Banning Referral Fees for Personal Injury Cases Would End Up Damaging Both Consumers and Law Firms

A proposal from Lord Justice Jackson to ban referral fees for personal injury and other litigation cases would ultimately damage consumer interests, says Contact Law, the UK’s leading provider of client introductions to a network of over 500 UK law firms.

(PRWEB) January 20, 2010 -- A proposal from Lord Justice Jackson to ban referral fees for personal injury and other litigation cases would ultimately damage consumer interests, says Contact Law, the UK’s leading provider of client introductions to a network of over 500 UK law firms.

 
  • Malpractice can be routed out by proper enforcement of existing rules
  • Referrals allow consumers to navigate complex legal market
  • Compliant referral systems fully transparent

A proposal from Lord Justice Jackson to ban referral fees for personal injury and other litigation cases would ultimately damage consumer interests, says Contact Law, the UK’s leading provider of client introductions to a network of over 500 UK law firms.
“Everyone wants to see the cowboys shut down but that is best achieved by proper enforcement of the existing rules”
Contact Law, part of Thomson Reuters, says that sharp practice in the referral of personal injury cases should be dealt with by stricter enforcement of the Claims Management Services Regulations by the Ministry of Justice rather than a draconian ban on a fast evolving industry.

James Vintin, Managing Director of Contact Law comments: “Everyone wants to see the cowboys shut down but that is best achieved by proper enforcement of the existing rules”

“I think it is common to every new industry that there are some sharp practices that either get evolved or regulated out of existence. I think the business of matching consumers to the right law firm is going through that process now.”

“There is no doubt that referral businesses are needed to stimulate competition and to help consumers navigate round an incredibly diverse and complicated legal profession – that is a conclusion the Office of Fair Trading has also come to.”

Contact Law says that many professionally run referral networks both inside and outside of the personal injury area are now delivering real value to consumers by carefully selecting exactly the right law firm for that consumer from a wide panel of quality-assessed law firms.

Although some insurance companies and unions are still referring personal injury work to just a handful of preferred law firms, a network like Contact Law will choose from over 100 different pre-screened law firms covering all areas of law, not just personal injury.

Contact Law says that without referral networks in place it is remarkably time consuming and difficult for individuals to navigate the UK’s legal market.

James Vintin says: “Consumers would have to be fortunate enough to have relevant and reliable personal recommendations or have to interpret the sales and marketing literature of law firms. Whereas a good referral network like Contact Law can rapidly match a consumer’s exact requirements to an appropriate law firm.”

“Calls to ban referral fees for personal injury cases are misjudged considering the many benefits referrals bring to both consumers and law firms. With the legal market currently facing the huge challenges of the Legal Services Act, referrals are more important than ever in linking consumers to relevant legal practices.”

“So-called ‘Tesco Law’ threatens to undermine the survival of many law firms while simultaneously reducing the standard of legal advice available to consumers. An effective referral network can connect consumers looking for high-value, high-quality legal advice with a law firm to match their demands.”

“Like price comparison websites, a good referral network provides consumers with more control over pricing and service levels. Consumers are able to use referral networks to set their requirements – such as a fixed fee pricing structure, no-win-no-fee or a specialist firm in a niche area – at the outset. Additionally, referral companies such as Contact Law provide up-front free advice to consumers, which can be difficult to access from traditional law firms.”

“Banning referral networks would also deny the legal profession all the benefits of the internet and call centre revolution and leave it mired in the past just as the profession is being opened up to deep-pocketed competitors.”

James Vintin says one of the biggest benefits of the referral system is that it creates a healthy legal ecosystem, with lots of law firms able to compete for work from smaller clients without having to invest heavily in their own advertising budget.

Comments James Vintin: “Consumers deserve to have choice and accessibility in the legal marketplace. The competition driven by effective referral networks like Contact Law encourages law firms to focus on the value they bring to the transaction with their consumers.”

“Law firms benefit too because they know they can rely on the quality and value of their service offering to win them business, rather than having to depend on the size of their marketing budgets. Because consumers can find them under a referral system, even small, niche practices can flourish, regardless of where in the country they are located.”

According to Contact Law current regulations mean that compliant referral systems are completely transparent and law firms always work in the best interest of their clients whether they receive work through referrals or not.

James Vintin adds: “Under current rules a compliant referral system is completely upfront so that consumers know who they are paying and what they are getting for their money. It is far more transparent than the underground systems it replaced. Banning referral fees would be a backwards step to a much less effective and more secretive system.”

Contact Law points out that the relationship between a referrer of legal work and a law firm is governed and dictated by that law firm. As long as that law firm is serious about their duty of care to the client they would not enter into a contract with a claims management company or other form of referrer that could damage the client’s interest.

Says James Vintin: “Law firms are obliged to work for their clients’ best interests and this obligation means that no law firm should accept work it was unable to handle. The issue of referral fees on this point is a bit of a red herring.

Notes to Editors:

Contact Law is the UK’s leading provider of client introductions to UK small and medium-sized solicitors firms. The business is based in London where its team of trained case handlers manage the introduction of thousands of client enquiries every month to its network of solicitors across the UK.

Thomson Reuters is the world’s leading source of intelligent information for businesses and professionals. We combine industry expertise with innovative technology to deliver critical information to leading decision makers in the financial, legal, tax and accounting, scientific, healthcare and media markets, powered by the world’s most trusted news organization. With headquarters in New York and major operations in London and Eagan, Minnesota, Thomson Reuters employs more than 50,000 people in 93 countries. For more information, go to www.thomsonreuters.com.

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[Via Legal / Law]

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