Payments: Referral fees under the spotlight once more
Group action law firm Keller Lenkner UK is planning a claim over the cyber-attack that continues to affect clients of conveyancing giant Simplify, it has emerged.
A month on from the attack that forced Simplify to take down its systems – affecting Premier Property Lawyers, DC Law and JS Law – clients continue to complain about stalled transactions and poor communication from their lawyers.
It has also prompted the launch of a petition calling for a ban on referral fees in conveyancing.
Simplify’s most recent update last week said: “An ever-growing proportion of our conveyancing colleagues are back up and running on core systems and progressing transactions.
“We continue to prioritise the most urgent cases, and are working with clients to help them move forward towards exchange and completion
“We very much regret any uncertainty and disruption that our clients and others may have experienced. Our team, supported by external experts, are working non-stop to get the remainder of our systems safely back up and running, with progress being made every day.”
Group action law firm Keller Lenkner UK, which specialises in data breach and cybercrime litigation, said it was investigating various aspects of the crisis as part of its intention to bring a claim, “such as potential data lost, delayed/cancelled transactions, financial implications and more”.
In a message to the ‘When conveyancing goes rogue’ Facebook group – set up in the wake of the attack and which now has 1,400 members – the firm stressed that, as it did not handle conveyancing, “we have no conflicts or concerns about standing up for justice, regardless of how big the opponent”.
Simplify has previously said it did not believe that client data was compromised as a result of the attack.
Simplify has arrangements with various major estate agencies to funnel work in its direction. The petition on Change.org [1] was started over the weekend by Julie Close, who works for a firm of licensed conveyancers. It argues that the payment of referral fees to estate agents “is not in the best interest of the public”.
It continues: “The payment of referral fees denies the consumer choice [and] allows for an environment where estate agents can apply pressure or manipulation to use the ‘pet’ conveyancer…
“Often there is no transparency and full disclosure that a referral fee is involved and the amount being paid. The payment of referral fees to gain conveyancing business denies investment into improving systems, training and delivery of quality services.
“Instructions should be gained by delivery of a quality service, repeat business and recommendations from previous users. It will necessitate that the conveyancing companies to become more ‘client focused’ rather than looking at other opportunities to buy business.”
So far, more than 200 people have signed the petition, which this morning garnered support from the National Leasehold Campaign, which tweeted: “We know the use of ‘pet’ solicitors has played no small part in the #leaseholdscandal.”
The payment of referral fees in conveyancing has been the subject of debate for many years. In October 2020, a report from National Trading Standards’ estate and letting agency team called for mandatory disclosure of referral fees [2], instead of a ban.
The government has asked it to keep monitoring the situation.
Separately, Conservative MP Bob Blackman, a member of Parliament’s levelling-up, housing and communities select committee, said he would support the committee investigating what had happened.
He told the Daily Express: “Whilst [Simplify] are working around the clock to restore their systems, we have heard numerous stories of home buyers not being able to complete or exchange. Indeed we have heard several stories of people having to sleep in their cars as they had to leave their old house and had not been able to complete on their new home.
“I would certainly welcome an investigation by [the] committee to investigate how this happened and what steps are been taken to prevent such an incident from happening again.
“Whilst it remains down to [Simplify] how they handle the situation, I would welcome any efforts to offer some sort of compensation.”