Industry must seize the chance to end referral fees.

See story: Referral fees face regulation

The age-old joke among liability insurers has you facing Hitler, Stalin and a lawyer with only two bullets in your gun. Obviously you shoot the lawyer twice and then pistol-whip him to make sure he’s dead.

Now even the lawyers own regulatory body the Solicitors Regulation Authority is starting to take a similar view. The reason is simple: referral fees.

Roy Hebburn, Allianz’s divisional claims manager summed up referral fees recently when he said: “They are invidious, totally unnecessary, drive unhealthy behaviour and bring no benefit at all to the customer, the insurer or to members of the public. The referral fee creates claims and inflates claims.”

His words have had a hearing at last. Not only is the review taking place but the regulator has said that the purpose from the outset is to deter the use of referral fees.

We are finally getting the response the government missed when it failed to make referral fees illegal.

Now is the time for action. Liability insurers and those solicitors opposed to referral fees – Thompsons, the major trade union solicitors claims it hates them too – need to put their case coherently and cogently to the Solicitors Regulation Authority.

And, with a meeting in December possibly discussing the issue, it must be done with haste.

With the regulator already on our side the danger is complacency. We must avoid that. Just scrapping referral fees without facing is not an option – the aim must be to reduce the cost of handling claims while ensuring that solicitors are fairly rewarded for providing a good service to clients who need it.

My suggestion? – Don’t tell anti-solicitor jokes to the regulator.