The Council for Licensed Conveyancers (CLC) has rejected Law Society calls for a ban on referral fees in conveyancing.

The CLC issued a consultation paper last week which said they had found little evidence of significant detriment to consumers from referral fees.

Ruth Matthew

Some including the Law Society are calling on the Government to extend the referral fee ban already seen in personal injury, although they currently have no plans to.

The CLC said that they did not provisionally feel that a blanket ban would be justified by the evidence seen to date.

They added that they were concerned that a ban could in fact create perverse incentives which lead to more harmful behaviour, such as ‘under the counter’ inducement fees.

The CLC did say that the current regulatory requirements do not go far enough to ensure consumers are consistently provided with sufficient and timely information to ensure an informed choice can be made.

The CLC plans to add requirements that all referral arrangements with third parties are in writing and should be periodically reviewed.

Further, clients are to be given more detailed information, such as how any payment is calculated and how they are affected by the arrangement.

They will also be told of any restrictions or limitations affecting the introduction and of their right to shop around.