Claims Direct Test Cases Tranche 2 Issues [2003] EWHC 9005 (Costs) (03 January 2003)

Claims Direct Test Cases Tranche 2 Issues [2003] EWHC 9005 (Costs) (03 January 2003)

The payment of £395 plus VAT to MLSS Ltd is, at least in part, a referral fee as it constitutes a reward for the introduction of work to the panel solicitor. Such payment breaches the Solicitors Introduction and Referral Code 1990 and the Solicitors Practice Rules 1990. Any part of the MLSS fee that cannot be...

Source-derived case information.

Citation
[2003] EWHC 9005 (Costs)
Parties
Claimant: Claims Direct panel solicitors; Third Party: Medical Legal Support Services Ltd (MLSS); Third Party: Mobile Doctors Ltd; Third Party: Poole & Co; Defendant: Defendants (various insurers)
Jurisdiction
England and Wales
Judgment Date
03 January 2003
Procedural Posture
Costs Assessment / Civil Procedure / Judgment on Preliminary Issues (tranche 2)
Outcome
Partially allowed; referral fee element irrecoverable
Legal Topics
Referral Fees, Solicitors' Professional Conduct, Recoverability of Disbursements, Insurance Premiums, Counsel's Fees
Civil Procedure Legal Profession Regulation Costs Referral Fees Solicitors' Professional Conduct Recoverability of Disbursements Insurance Premiums Counsel's Fees

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Parties

Claims Direct panel solicitors

Claimant

Medical Legal Support Services Ltd (MLSS)

Third Party

Mobile Doctors Ltd

Third Party

Poole & Co

Third Party

Defendants (various insurers)

Defendant

Procedural Posture

Costs Assessment / Civil Procedure / Judgment on Preliminary Issues (tranche 2)

Legal Issues

  1. 1 Is the payment of £395 plus VAT to MLSS Ltd a referral fee?
  2. 2 If so, does the solicitor's agreement to pay it breach the Introduction and Referral Code?
  3. 3 What are the consequences of such a breach?

Ratio Decidendi

The payment of £395 plus VAT to MLSS Ltd is, at least in part, a referral fee as it constitutes a reward for the introduction of work to the panel solicitor. Such payment breaches the Solicitors Introduction and Referral Code 1990 and the Solicitors Practice Rules 1990. Any part of the MLSS fee that cannot be justified as payment for work actually done is irrecoverable as a disbursement. The irrecoverable element cannot be recovered from the paying party, and the solicitor may not recover it from the client unless a specific written agreement exists. The retainer is not wholly unenforceable, but the referral fee element is not recoverable.

Court Disposition

Partially allowed; referral fee element irrecoverable

Orders

  • Any part of the MLSS fee constituting a referral fee is irrecoverable as a disbursement between the parties.
  • Solicitors may not recover the irrecoverable element from clients unless a written agreement exists.