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Fl. Supreme Court Takes Tough Stand on Lawyer Referrals

Pointing to what it described as "significant risk" for the public, the Florida Supreme Court on Thursday called for cracking down on lawyer-referral services that cater to accident victims.

Justices directed The Florida Bar to develop a rule that would prevent attorneys from accepting referrals from any service that is not owned or operated by a lawyer. In doing so, the Supreme Court bluntly rejected a narrower proposal approved by the Bar's Board of Governors, saying the board "disregarded the potential harm to the public that non-lawyer-owned, for-profit referral services present."

The issue focuses, at least in part, on businesses that refer auto-accident victims to attorneys and to medical providers. Justices pointed to potential conflicts of interest involving attorneys and the services, some of which advertise heavily for customers.

"While the action we take today may be viewed by some as severe, we conclude it is absolutely necessary to protect the public from referral services that improperly utilize lawyers to direct clients to undesired, unnecessary, or even harmful treatment or services,'' the court ruling said. "Our action today will also prevent conflicts of interest, such as where a lawyer feels compelled or pressured to refer a client to another business operated or controlled by the owner of the referral service so that the lawyer may continue to receive referrals from that service."

The Bar in 2011 formed a special committee to delve into the issue after receiving complaints about advertising by lawyer-referral services and seeing increased concerns about the services' activities, according to the Supreme Court ruling.

The special committee issued a report in 2012 that included recommendations such as preventing lawyers from accepting client referrals from people or businesses that also refer the same clients for other types of professional services. But the Bar Board of Governors approved less-restrictive steps to try to address the issue.

Supreme Court justices, who have final say on rules dealing with attorneys, tossed the issue back to the Board of Governors on Thursday, with instructions that appear to go even further than what the special Bar committee recommended. Chief Justice Jorge Labarga and justices Barbara Pariente, R. Fred Lewis, Peggy Quince, Ricky Polston and James E.C. Perry fully agreed with the decision. Justice Charles Canady agreed with rejecting the Board of Governors' proposal but said he would move forward with the special committee's recommendations.

The eight-page decision does not name specific lawyer-referral services that could be affected by the change.

But in a document submitted in November, Broward County-based 1-800-411-Pain Referral Service objected to the Bar's proposal, arguing that already-existing rules address issues such as conflicts of interest. It also said the Bar was targeting only a group of lawyers who get referrals from the services.

"The underlying conduct at which the proposed rules are aimed, however, is not unique to referral service participants,'' the document said. "Many lawyers, from all areas of practice, have relationships with referral sources. Many lawyers face situations in which their personal interest in obtaining client referrals could potentially or actually conflict with their duty to put their clients' interests first. Many lawyers face situations in which they might be tempted to solicit prospective clients. Existing Bar rules govern these situations."