Transparency for who? Regulating Referral Fees

Neil Rose has suggested that the LSB’s suggestions for regulating referral fees may be transparency gone mad.  I’m not sure I agree.  I’ve not had a chance to look at the LSB’s proposals in any detail at all, but it seems to me Neil’s post misses the point of the kind of transparency the LSB are interested in.  It would be a mistake to judge transparency provisions solely or mainly in terms of their impact on the consumer.  As I have argued elsewhere, consumers are unlikely to be significantly influenced by greater transparency.  As a consumer-facing iniative, transparency is right in principle but likely to be ineffectual in practice.  But, and it is a big but (with a few ifs), there is the potential for transparency about the actual agreements to have an impact independent of what consumers think or do.  Transparency has the potential to open up this murky area to far greater scrutiny by regulaltors and others.  The regulators would have more information, as might journalists and researchers  and other interest stakeholders.  Insurance companies would take an interest.  Consumer bodies might also.  The debate about the ethics and public interest in relation to these agreements may become both more informed and more contested.  This is likely to have a significant influence on behaviour in a way that consumer-focused disclosure will not.

Of course this raises a number of questions, with commercial confidentiality being one of those, but it is a proposal which merits serious thought.

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About Richard Moorhead

Director of the Centre for Ethics and Law and Professor of Law and Professional Ethics at the Faculty of Laws, University College London with an interest in teaching and research on the legal ethics, the professions, legal aid, access to justice and the courts.
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