Noble Law Solicitors of Morden received the most severe sanction the Solicitors Regulation Authority (SRA) can impose without a referral to a disciplinary tribunal.
It was found to have paid a prohibited referral fee, failed to pay damages to the correct individuals, failed to disclose a financial interest that a company had in referring the personal injury matter to the firm, and failed to provide prior written notification of its costs to clients.
Noble Law as also ordered to pay the regulator’s costs of £1,825.
It is the latest in a series of disciplinary actions taken over referral fees. In May, the head of marketing at a Manchester law firm was banned from working in the profession after he accepted kick-backs from referral fees, while in February the owner of another Manchester firm was suspended for pursuing PI cases without the consent of clients and paying prohibited referral fees.
In January, a law firm in Blackburn was rebuked after paying more than £200,000 to an unauthorised claims management company for referrals.
Earlier this month, Richard Collins, the SRA’s executive director for strategy and resources, revealed that, since the ban was introduced, the SRA has received around 260 reports of possible referral fee ban breaches, of which 11 have led to the regulator imposing sanctions on individuals and firms, with a further seven cases referred to the Solicitors Disciplinary Tribunal.
He said the low numbers were not surprising for two reasons: “One is that firms generally try to comply. The other is that firms have continued to find ways to attract clients in PI cases.”