Sunday, December 9, 2007

THE Law Society is moving to tackle the hot-button issues of touting in property deals and entrapment

THE Law Society is moving to tackle the hot-button issues of touting in property deals and entrapment, even as lawyers say fees paid to agents have been going up.

The lawyers note that lawyers who pay such referral fees get a lucrative payoff. Their comments come in the wake of the suspension of three lawyers on Tuesday.

They had been caught offering referral fees to a private investigator pretending to be a property agent. The private eye was hired by unknown lawyers.

But even as the Society said it is moving to tackle these issues - touting and entrapment - many lawyers say its task is fraught with difficulties.

Under the law, lawyers are guilty of misconduct if they engage in touting practices and pay an agent to refer a client to them in return for a fee.

But lawyers told The Straits Times it is prevalent.

The going rate for such fees now is about $500 - from about $150 five years ago - for each conveyancing file which brings in about $2,000 per transaction to the lawyer.

A lawyer with 10 years’ experience said: ‘Each property file is worth about $2,000 and if an agent can bring in 20 files a month, that’s easily $30,000 - enough to cover rental and staff costs.

‘The agents will tell you: ‘I have a conveyancing case, how much will you pay me?’’

There is thus significant money to be made, especially if the agent can bring in the cases in bulk.

The Law Society said moves are already afoot to tackle touting. A spokesman said the practice is difficult to detect, especially when there is ‘an absence of evidence from the parties concerned’.

But an ad-hoc committee had been appointed to see if ‘current detection and enforcement procedures could be streamlined and enhanced’.

The committee will also look into the issue of lawyers ‘privately engaging investigators to detect suspected unethical conduct’, the spokesman said.

A decision to set up the panel came in the wake of a failed attempt in late 2006 by lawyer Rayney Wong to stop a disciplinary committee which had investigated him for touting.

In throwing out his request at that time, Justice V.K. Rajah also called on the Law Society to deal with the problem of lawyers hiring private investigators to entrap competitors they suspect of using touts to drum up business.

Yesterday, the Law Society’s spokesman said that once the recommendations of the committee are out, it will tackle the question of whether it should take on a greater investigative role.

Many lawyers see this as a solution to touting. But they are split over the issue of an absolute ban on referral fees.

The sole proprietor of a law firm and a litigator of 10 years said: ‘I accept that it is an offence, but to me it’s business. If an agent brings in business for you, wouldn’t you give him a commission? A car salesman would be paid a cut for every car he sells. But in our case, it is against the law.’

Mr Mark Goh, of Mark Goh & Co, disagreed. ‘The legal profession cannot be equated with a commercial company…We owe a duty to our clients and society,’ he said.

Allowing such fees can open another can of worms, said sole-proprietor Patrick Tan of Patrick Tan & Associates. ‘There’s nothing to stop another lawyer from handing out a higher fee to an agent to get the file. If one gives $200, another might give $500.

‘Where does it stop?’

Source : Straits Times - 7 Dec 2007

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