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Misleading Lawyer Advertising Prompts New Hudak Bill 12 Proposal



There is a lot of discussion in legal circles surrounding “Revenue for referral-based advertising”. If former MPP Tim Hudak has his way, his Bill 12  proposal will have a strong affect on the way the firms in question, do business. If successful, Hudak’s bill would ban referral fees in auto insurance cases except on successful completion of claims.

   (7.2) Subject to subsection (7.3), no licensee shall, directly or indirectly,

  (a) Solicit or accept a referral fee from another licensee in exchange for directly or indirectly encouraging or otherwise arranging for a client to retain the other licensee to receive legal services with respect to a personal injury claim; or

  (b) Pay a referral fee to another licensee in exchange for having the other licensee directly or indirectly encourage or otherwise arrange for a client to retain the licensee paying the fee for the purpose of receiving legal services with respect to a personal injury claim.

Hudak Proposed Bill 12:

If you live in Toronto, or travel major highways and streets in southern Ontario leading to cottage country, they are hard to miss. In high traffic, lower speed areas you will see the country side dotted with giant billboards promising legal help, along with large and easy to read contact information. You can see them on buses, sporting venues and benches too.

Adverts for personal injury lawyers have long been a part of the landscape in the U.S. They run alongside the highways and clamor for attention, side by side with other billboards.

It turns out that some of these Ontario firms that conduct extensive advertising campaigns are in the business of finding business, then passing it on. The advertising law firm will pick the cases they prefer. Those remaining files are then offered up to other legal firms, not necessarily to the most qualified, but to the one who pays the most for the referral.

This type of referral for revenue based advertising has recently set off ethic alerts with the Law Society of Upper Canada. In an intern report, the law society wrote “These firms engage in mass advertising campaigns both in order to take on certain cases internally, and in order to earn revenue by referring certain cases out to selected licensees for a referral fee.”

The Law Society of Upper Canada is a self-governing body of lawyers and paralegals. Since 1797 the society’s responsibility is to provide the highest standards of law and justice to the public while making sure that it’s members follow “high standards of learning, competence and professional conduct.”

It is a sensitive subject to many reputable lawyers. Any deviation or failure to adhere to the standards of excellence Canadians have come to count on reflects on the legal profession as a whole.   Consequences can be disastrous in the short term for the individual personal injury client and in the long term for our long held traditions of respect and trust for someone whose job is to uphold the law.

Please note: The Kahler Personal Injury law firm does not conduct any revenue for referral-based advertising and does not support lawyers advertising when they have no intention of taking on the case.

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