Conveyancing referral fee query

googler wrote: »

So ... you hired them on the basis of a fee illustration which specified this referral fee, but now feel you shouldn't pay it ..... because?

Thabk yoy for replying.Firstly, the paragraph quoted is buried outside the main points of the illustration. I.e. in the small print. And the fee is not itemised

Secondly, because the wording used is "paid by the solicitors themselves and not by you". It does not say "paid by the solicitors on your behalf".

I don't know how that sentence can be misinterpreted. Nor am I saying that I am right and either of you are wrong.

ACG wrote: »

I think you are misreading the statement.
You will not be paying them directly, you will be paying your conveyancers the amount which you agreed with them and they will pay everyone out from that which will include the £420 odd pounds.

I have 2 solicitors I work with, one I get nothing from but they are local and on the average side of pricing. The other, I receive a kickback of £150 but they are cheaper than almost any other solicitor even with the £150 included. But with those 2 solicitors, if there is a problem at the legal stage I will do what I can to help. If a customer uses their own solicitor then I do not get involved with the solicitors.

A £350 referral fee seems like a lot in my opinion.
Whoever referred you has done alright, but realistically if the cost is the same as what you agreed to, there is not a lot you can do.

AVG, thank you for your insight. Perhaps I have misinterpreted it, I don't know (see above comment). To me, the language is clear and unambiguous- they pay, I do not.

As far as I see it, I am paying (not exact figures here) £1000 Conveyancing fee and £400 referral fee. Separately itemised on the completion statement, with the illustration stating that there is a referral fee which is paid by the solicitors and not by me.

If the statement showed £1400 Conveyancing costs and the illustration has the referral fee hidden in the small print- ok, suck it up. But it does not. Its a separately billed item that is not listed in the illustration as a billable item.

I hope this explains why I am questioning this.

I have found the following guidance from the Law Society which seems very clear to me....

Q. Can I pass on the cost of the referral to my client?


A. Referral fees are simply part of the cost of running your practice, in the same way as other marketing costs. They may be taken into account in calculating the fees to be charged, either generally or in respect of particular clients, but they may not be charged directly to the client. You may, for example, charge a higher fee for clients referred by a particular source, to take into account any referral fees payable; or you may choose to spread the cost of referrals across all of your clients. Either way, all referred clients must be informed that a referral fee is being paid and, where appropriate, the amount of the payment.


A referral fee is not a disbursement and may not be charged to the client as such, nor treated as such for accounting purposes. It is not a liability that you have incurred on the client's behalf in the course of acting for the client. It is your liability, incurred by you before the client instructed you. By including the referral fee as a separate item on the client's bill or in a quotation (whether or not it is described as a disbursement), you would be suggesting that the client is responsible for paying the referral fee, when this is in fact your liability under whatever agreement you have entered into with the introducer.

I'm not being sore here. If the fee is correct and proper, then no problem. But this guidance is also unambiguous.

ACG wrote: »

My understanding is that if you agreed a fee of £1,000, that is what you will pay.

That £1,000 will include your referral fee.

Give them a shout and ask the question, but I honestly think that is how it will be. £350 is a bit cheeky for just passing on a name and number but estate agents usually charge every penny they can.

Thank you, that's exactly what my understanding of the illustration was...

Total is £1000. You pay this please (oh by the way, we have to tell you there's a referral fee and the £1000 we're charging you might be more than what you'd have paid if you came to us directly)