Solicitors demand end to estate agent 'bribes'

More and more solicitors are speaking out against their colleagues who effectively ‘bribe' estate agents to give them conveyancing work by paying them referral fees.

Some law firms are paying estate agents up to £300 in order to secure the conveyancing work that must be carried out each time a property changes hands.

There is a groundswell of opinion now damning this practice as entirely unethical, giving rise to commercially-motivated advice being meted out to people buying and selling property.

The process of transferring the ownership of a home is a legal transaction, and a solicitor or licensed conveyancer needs to be employed to deal with the legal paperwork (contracts and so on), and to over see the payment of the funds involved.

Homebuyers are free to appoint a solicitor of their choice, or use a conveyancer. However, in some instances estate agents will recommend a particular solicitor is used, and the fear is that homebuyers can feel pressured into taking up their recommendation.

According to the Office of Fair Trading, 56% of sellers select their solicitor on the advice of their estate agent, while 46% of buyers do the same. Where the solicitor has paid a ‘referral fee’ to the estate agent, some feel that this is tantamount to a bribe.

According to guidelines from the Solicitors Regulation Authority (SRA) and the National Association of Estate Agents, consumers involved in a property transaction should be informed of any referral fees paid, but in reality many are not aware of any such arrangements.

“Solicitors are paying bribes to get work and ordinary consumers, who ultimately pay for it, are being ripped off,” says Laurence Mann, of AL Hughes & Co solicitors in Streatham, South London.

“This is no different from paying dodgy sheiks for arms contracts and it undermines the integrity of the profession.”

Mann says some of his clients have been told by estate agents that if they used his firm, not the recommended solicitors who are paying a fee, they would lose the opportunity to buy the property.

Over the past three months, the Law Society Gazette has been inundated with letters complaining about referral fees.

However the Law Society does not have the power to regulate the profession. That is the role of Government and the Legal Services Board.

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