Arrangements with Third Parties Flashcards
what must an arrangement with a third party comply with?
- Arrangements between a solicitor and a third party (i.e. estate agent or claims manager that ‘introduces’ the solicitor to their client) must comply with StaRs
what must the solicitor do when entering into an arrangement with a third party?
- The arrangement should not jeopardise client-solicitor trust
- The solicitor must still be able to act independently
- The solicitor must not abuse their position by taking unfair advantage
- If the client is introduced to the solicitor by a third party, the way the third party acquired the client must comply with StaRs, i.e.: cold calling = not permissible
what is ‘commission/other benefits’?
commission, referral fee, fee-sharing, discount or rebate
what is fee sharing?
o Fee sharing = the solicitor makes a payment to the third party reflecting a % of their net or gross fees for a particular period
what are the rules regarding fee sharing?
o Any fee sharing agreement must be in writing
what is the position regarding a solicitor receiving commission/another benefit?
- Solicitor-client relationship is a fiduciary relationship so they cannot make secret profits. Clients must be informed of any financial benefit the solicitor will receive
can a solicitor keep commission/another benefit?
only if the client agrees, unless it is in connection with criminal proceedings
The solicitor/firm and the third party cannot receive any payments in relation to clients subject to criminal proceedings
when are referral fees prohibited?
- Referral fees are prohibited in some PI cases, i.e.:
o Claims for damages following personal injury or death; and
o Where a claim for the above and a separate claim are referred together, the solicitor cannot accept referral fees for either - A payment that appears to be a referral fee will be unless proven otherwise
