Referral fees - does the consumer benefit?

Very interesting to see the Government now pick up the issue of referral fees being paid by lawyers for information about possible personal injury claims or for such claims to be referred. Despite the majority of the legal profession being against the concept of referral fees they are permitted. The kind of issues mentioned today (false claims being made, deliberate accidents being caused and unwanted texts being received encouraging a claim) are symptomatic of referral fees. That is not to say they are the only cause - false claims have always been made and will always continue to be made.

Does the consumer benefit from a third party being paid for their claim to be passed to a solicitor? An argument in favour is that the third party has the ability to advertise people’s rights and make them alive to the fact that they might have a claim. Law firms don’t generally have the financial ability for that level of advertising. Against is that an intermediary is making a profit (which ultimately must increase the cost to the consumer or negligent party) , that matters are not always referred to the right specialist (referral agencies only refer to firms on their panel who have agreed to pay a referral fee) and firms who pay referral fees often engage junior staff to process claims as the only means of making it pay.

Good quality service comes at a price – mostly it is worth paying the extra. Keep an eye out for our articles over the next few months about referral fees paid by some law firms to estate agents for conveyancing referrals. Have you ever been told by an estate agent that you must use a certain law firm? Have you ever wondered why? Is it compulsory? Our first article on the topic will be on our website next month.

Bettina Brueggemann, Managing Partner, Hart Brown

Do estate agents provide good customer care?

In her latest trip down the high street, Mary Portas “Queen of Shops” has been targeting businesses and questioning their customer care. So far we have seen her at the door of fashions outlets, furniture stores and mobile phone shops. This week the Secret Shopper’s target was estate agents.

Public perception of estate agents seems to be that they are deceitful, unscrupulous, manipulative and un-trustworthy. So what did Mary Portas consider they could change in order to provide their clients with better customer care?

She took on a family run firm of estate agents who didn’t initially appear to think that they needed to change their ways. However, as the exercise continued Mary proved to them just how important it is for the public to have clear, concise and truthful information. After all, buying a house is probably one of the biggest financial decisions anyone will make in their lifetime and people don’t like to be misled.

Mary put the agents through their paces in a country house where, after 15 minutes of training, they took the general public on guided tours. This proved to them just how important it is to have knowledge and expertise of the particular property they were showing off.

The agents took this on board and put it to good use, embracing the issue of their property details, radically changing them to reflect both the good and the bad aspects of the properties on their books. This attitude to selling is not only upfront and honest but to potential buyers it is straightforward, accurate, honest selling. No terrible clichés, jargon or estate agents patter.

Mary surveyed the prospective buyers who had viewed properties with the benefit of the new style property details. She was amazed to hear that 100% of those prospective buyers thought they were honest, trustworthy, specialists in their field with expert knowledge of both the properties and the area generally. This was a great result.

Honesty is certainly the alternative way for estate agents to market property and it will be asking them to change the habits of a lifetime but could the industry make the change to embrace these radical ideas? Refreshing thought!

Debbie Beswick