The Solicitors Regulation Authority has rejected calls to ban solicitors from offering cash or gift inducements to potential clients.
The regulator has said there was no evidence to suggest clients are harmed by law firms offering advance payments for their cases.
Claims management companies have been barred from offering inducements by Ministry of Justice rules since the end of April.
Agnieszka Scott, director of policy for the SRA, said today: “We have often been asked to look at similar measures for solicitors, but we have not found anything to suggest that it is a significant problem or that clients’ interests are put at risk.
“We have no evidence which suggests that inducements encourage spurious claims to be made. We want this situation to continue.”
In personal injury cases referral fees and inducement payments to clients have often been paid up front.
Conveyancing has never operated that way. Referral fees have always been paid on completion but in some rare cases on exchange.
Inducement fee have never really been paid to clients. The timing is probably due the fact that about 30% of transactional conveyancing cases never reach a completion.
With the green light from the SRA on inducements might some businesses that refer conveyancing to their panels reconsider the point in time that they require payment ?