"Legal fees" adverts to be clarified
14 Sep 06
Society's draft guideline would require commission or referral element to be shown
Advertisements offering fixed rate "legal fees" or similar will have to disclose any commission or referral element, if a draft practice guideline by the Law Society of Scotland is approved.
The Society is consulting its members over a draft approved by the Professional Practice Committee on the recommendation of a working party. The issue has been under review since the Society's annual general meeting in March, when Glasgow solicitor Graeme McCormick expressed concern over new advertising rules before the meeting.
The working party, which included Mr McCormick, was set up to examine the topic, which arises for example when a lender or estate agent advertises a fixed charge for legal fees but the solicitor who carries out the work receives a smaller sum, the lender keeping the rest as commission.
The guideline now recommended is a revised version of the existing guideline on advertising fees (which covers the need to include mention of outlays and VAT). In relation to advertisements of “legal fees”, whether by solicitors or by others on their behalf, it states that any fees quoted should be the fees to be charged by the solicitor and should not conceal a commission or referral fee to be paid to a third party. Any such commission or referral fee should be shown separately in the advertisement.
The Professional Practice Committee is calling for comments from solicitors, to be sent to Bruce Ritchie at the Society, by 30 September so that they can be considered at its October meeting.
The draft guideline reads:
"Where fees for the services of a solicitor are advertised either by the solicitor or by another body such as a financial institution the wording should not be misleading. If the fees advertised are not inclusive of VAT and outlays, the advertisement must mention VAT and outlays with no less prominence than the fees. Where 'legal fees' or similar expressions are used, the fees quoted should be the fees to be charged by the solicitor and the figure quoted should not conceal a commission or referral fee to be paid to a third party. Any such commission or referral fee should be shown separately.
"Failure to comply with this guideline may mean that fees advertised are inaccurate and misleading and therefore in breach of rule 7(1) of the Society’s Advertising Rules. In terms of rule 10 of those rules, breach of any of the rules may be treated as professional misconduct."