6e. Ethics Flashcards
Seven mandatory principles
What are the Seven Mandatory Principles?
- Uphold rule of law
- Uphold public trust
- Act with independence
- Act with honesty
- Act with integrity
- Encourage equality, diversity and inclusion
- Act in best interests of client
Seven mandatory principles
Where two or more principles conflict, which takes precedence?
The principle which safeguards the wider public interest takes precedence over an individual client’s interest
Discrimination
What is the legal obligation to provide reasonable adjustments to disabled clients and employees?
Such that they are not placed at a substantial disadvantage compared to those who are not disabled.
Costs of the adjustment must not be passed on.
Misleading Others
What are three ways in which a solicitor may mislead a client or the court?
- Affirmative acts
- Omissions
- Being complicit in the acts or omissions of others
Undertakings
What is an undertaking?
Within what timescale must an undertaking be performed?
Statement, oral or in writing, irrespective of use of the word undertaking…
…made to someone who reasonably places reliance on it…
…that you or a third party will do/refrain from doing something, or cause something to be done.
Within whatever timescale is agreed, and if no time agreed, a reasonable time
Undertakings
Who can give an undertaking?
How will an ambiguous undertaking be construed?
Anyone, including non-lawyers
Against the party that gave it
Undertakings
What is the duty where an undertaking is given dependent on a future event, and it becomes clear the event will not occur?
In what way is a solicitor bound by an undertaking?
Notify the recipient of the undertaking
Personally
Evidence and Witnesses
What must witness compensation never be based on?
The nature of the evidence or outcome of the case
Respect for the Court
What standard must all assertions, representations, and statements made to the court be?
They must be properly arguable
Respect for the Court
What must you draw the court’s attention to?
Relevant cases and statutory provisions, and any procedural irregularities, which are likely to have a material effect on the case, even if it would harm your client’s case
Authority to Act for Client
If you have reason to suspect the authorised person’s instructions do not represent your client’s wishes, only when can you act?
When you are satisfied that the instructions reflect the client’s wishes
Authority to Act for Client
Is a solicitor allowed to represent, e.g. a husband and wife, and only take instructions from one?
Yes, provided it is established at the outset that the other party consents to the arrangement
Authority to Act for Client
What happens if a client’s instructions cannot be ascertained?
You must continue to act to protect your client’s best interests
Service
What two things are required of the service provided to clients?
- Competent (you have the skill)
- Timely (you have the time to dedicate to the matter)
Client money and assets
What must you do if you receive a financial benefit as a result of a client’s instructions?
Account to the client for it, unless the client has already agreed otherwise
What must you do to money and assets entrusted to you by clients and others?
Safeguard them
Referrals and Introductions
What three situations would be governed by the standards concerning referrals and introductions?
- You refer a client to a third party
- A third party refers a client to you
- You share your fees with a third party
Referrals and Introductions
What interests must a client be informed of when there is a referral?
Any financial or other personal interest you have in a referral
Referrals and Introductions
What are two requirements of fee sharing arrangements with third parties?
- Must be in writing
- Clients must be informed of any relevant fee sharing arrangement
Prohibited Referral Fees
What are two other types of cases in which the payment of referral fees is prohibited?
- Personal injury
- Death
(this includes ancillary claims in addition to the main claim)
Prohibited Referral Fees
What presumption does the SRA apply when it appears a prohibited referral fee has been paid?
The payment is presumed to be prohibited unless you demonstrate otherwise
Other Business Requirements for Solicitors
What is required of a solicitor carrying out any reserved legal activities in a non-commercial body?
You must ensure that the body maintains indemnity insurance
Other Business Requirements for Solicitors
Where a solicitor is carrying out reserved legal activities in a non-commercial body, what is the required scope of the insurance?
Adequate and appropriate cover in respect of all services (even those which are not reserved legal activities and would otherwise not require insurance but for the reserved legal activities)
Other Business Requirements for Solicitors
Under the Legal Services Act 2007, what are six things considered to be reserved legal activities?
- Exercising right of audience
- Conducting litigation
- Preparing instruments relating to real or personal property
- Preparing probate papers
- Notary services
- Administration of oaths
Other Business Requirements for Firms
What is the standard a firm must maintain in monitoring its business affairs?
A firm must actively monitor its financial stability and business viability, as well as all material risks to the business
Other Business Requirements for Firms
If there are multiple managers in a firm, how is their responsibility split?
It is joint and several
Other Business Requirements for Firms
What are five things within the purview of a firm’s Compliance Officer for Legal Practice?
- Ensure compliance with terms of firm’s authorisation
- Ensure compliance with SRA regulatory arrangements
- Ensure the firm does not cause or contribute to a breach of the SRA’s regulatory arrangements
- Ensure prompt report is made of any breach
- Ensure SRA is promptly informed of any facts or matters the COLP believes the SRA may wish to investigate
Other Business Requirements for Firms
What are three things within the purview of a firm’s Compliance Officer for Finance and Administration?
- Ensure compliance with SRA Accounts Rules
- Ensure prompt report is made of any breach of SRA Accounts Rules
- Ensure SRA is promptly informed of any facts or matters the COFA believes the SRA may wish to investigate
Conflicts of Interest
What are the two types of conflict?
- Own interest conflict: conflict between solicitor/firm and client
- Conflict of interest/client conflict: conflict between two or more clients
Conflicts of Interest
What is not considered to be sufficient to create a conflict?
General business interest, e.g. two clients operating in the same industry, alone (unless related of course)
Conflicts of Interest
In a conflict situation, can a different solicitor within the firm act for the second client?
Generally, no. The conflict provisions cover the entire firm.
Conflicts of Interest
What must you do if a conflict arises before retainer?
- Decline to act, or
- Act only for the client(s) whose interests you can best represent
Conflicts of Interest
What must you do if a conflict arises after retainer?
- Inform all clients
- You can continue to act for one party, but be mindful of confidentiality issues going forward
Conflicts of Interest
Can a client consent to a conflict of interest?
No, the solicitor is bound if there is a conflict
Conflicts of Interest
What must you do if there is an own interest conflict or significant risk of one?
Decline to act
Conflicts of Interest
Are all financial interests in a client’s business an own interest conflict?
Yes
Conflicts of Interest
When might a client leaving a gift of significant value to the solicitor in a will not be considered an own interest conflict?
If the solicitor is satisfied the client has taken independent legal advice regarding making the gift
Conflicts of Interest
What is another exception to a client leaving a gift of significant value to the solicitor in a will being an own interest conflict?
If the solicitor’s ability to advise could not be said to be affected by the financial interest, e.g. drawing up parents will where solicitor and siblings are treated equally
Conflicts of Interest
Should you represent a client (1) against someone with whom you have a personal relationship and (2) when you have a commercial interest in a business adverse to the client?
No, you should decline to act in both situations
Conflicts of Interest
Can a solicitor advise a client on how to rectify a mistake that the solicitor has made?
Not if one of client’s options would be to bring a claim against the solicitor for professional negligence
Conflicts of Interest
What is the definition of client conflict?
What is a good test to consider whether you have a client conflict?
Where a solicitor owes separate duties to act in the best interests of two or more clients, and those duties conflict
If you are representing two or more clients in the same matter/retainer, and your advice to one is different than your advice to the other(s)
Conflicts of Interest
What must you do if there is a client conflict or significant risk of one?
Decline to act, unless one of two limited exceptions applies
Conflicts of Interest
What are the (1) substantially common interest and (2) competing for the same objective exceptions to a client conflict?
- Two or more clients have a clear common purpose in relation to a matter and a strong consensus on how it is to be achieved
- Two or more clients are competing for an objective, which if attained by one will make it unattainable for the other(s)
Conflicts of Interest
Regarding the competing for the same objective exception to a client conflict, what is an objective?
An asset, contract, or business opportunity via:
- Liquidation or other insolvency process
- Auction or tender process
- Bid or offer which is not public
Conflicts of Interest
Even where there is a valid exception to a client conflict, what conditions must be met before you can act?
- Client has given informed consent, given or evidenced in writing
- Effective safeguards are in place to protect confidential information, where appropriate
- You are satisfied that it is reasonable to act for all clients
Conflicts of Interest
In the context of the conditions required even when there is a valid exception to a client conflict, what should a solicitor consider when determining whether it is reasonable to act for all clients?
- Will the clients benefit from the solicitor acting for each of them?
- Will there be extensive negotiations between the clients?
- Is there an imbalance in knowledge or bargaining power between the parties?
Duty of Confidentiality
What are two instances in which you do not have to keep a client’s affairs confidential?
- Disclosure is required or permitted by law
- The client consents
Duty of Confidentiality
What are five instances in which disclosure of a client’s confidential information is permitted by law?
- Solicitor discloses client’s will to an attorney under Lasting Power of Attorney
- Solicitor is being used by client to perpetrate a crime/fraud
- Statutory requirement, e.g. disclosing tax affairs
- Statutory duty, e.g. money laundering
- Court order or police warrant
Duty of Confidentiality
What are three instances in which breach of the duty of confidentiality may be justified?
Is disclosure made after one of the three instances acceptable?
- To prevent a criminal offence that will result in serious bodily harm
- Where the client has indicated they intend to commit suicide or serious self-harm
- To protect a child or vulnerable adult
No, disclosure must take place before the fact as the point is the prevention of harm
Duty of Confidentiality
For how long does the duty of confidentiality last?
Forever. It continues beyond the end of the retainer and the death of the client.
Therefore, client always includes former client
Duty of Disclosure
What is the duty of disclosure?
Any individual advising a client must make that client aware of all information relevant to the client of which the individual is aware
Duty of Disclosure
What are four instances in which disclosure to the client is not required?
- Client gives informed consent, in writing to non-disclosure
- You believe disclosure would cause serious injury to a person
- Legal restrictions are imposed due to national security or prevention of a crime e.g. tipping off
- You are only aware of the information because it is contained in privileged documents disclosed to you by mistake
Conflict between Confidentiality and Disclosure
What are the two exceptions to the rule that you should not act for client A where A has an adverse interest to current/former client B for whom you hold confidential information which is material to A?
What is meant by material information?
- Effective measures have been taken which result in there being no real risk of disclosure, e.g. team working on A’s matter will not have access to B’s file, or
- B gives informed consent, given or evidenced in writing
It must be relevant and of more than consequential interest to the client
Notifying SRA of Certain Events
What three events must a solicitor notify the SRA of?
- Subject to any criminal charge, conviction, or caution
- Insolvency event
- Aware of material changes to information about you or your practice provided to the SRA
Notifying SRA of Certain Events
What five events must a firm notify the SRA of?
- Indications of serious financial difficulty
- Insolvency event
- Intention or awareness that it will cease operating as a legal business
- Any change to information in the register
- Aware of any material changes to information about the firm, or its managers, owners, or compliance officers provided to the SRA
Reporting Actual and Potential Breaches
What must you do if you become aware any person or body (including yourself) has committed a serious breach?
Ensure that a prompt report is made to SRA/relevant regulator
Report any facts or matters which you reasonably believe are capable of amounting to a serious breach
Reporting Actual and Potential Breaches
What are six allegations that are taken seriously by the SRA?
- Abuse of trust
- Dishonesty
- Taking unfair advantage of clients
- Misuse of client money
- Sexual or violent misconduct
- Criminal behaviour
Reporting Actual and Potential Breaches
What are four factors that could aggravate conduct to a serious breach?
- Deliberately or wrecklessly disregarding their obligations
- Taking advantage of vulnerability
- Causing harm that could have been reasonably anticipated
- Pattern of repeated misconduct
Solicitor May Inform SRA Indirectly
How can you satisfy your obligation to report via a COLP or COFA?
When you make a report to a COLP or COFA, do you have to follow up?
Make the report to the COLP or SOFA on the understanding that they will provide the information to the SRA
Generally, the obligation is discharged and you are not required to check
Solicitor May Inform SRA Indirectly
What must you do if you are not satisfied the COLP or COFA agrees with your assessment of the seriousness of the breach?
Make the report directly to the SRA
Admitting Mistakes to Clients
What must you do if you make a mistake and a client suffers harm as a result?
- Put matters right (as far as possible)
- Provide a full explanation of what happened and the likely impact promptly
Admitting Mistakes to Clients
Why would a firm generally not act to put things right until after their insurer is notified?
Because depending on what the insurer advises, the firm may be placed into a conflict with the client
What is the first thing you must identify in any matter?
Who you are acting for
Informing Client of Regulation
What things must you inform the client of at the outset?
- How the services are regulated
- How this affects protection available to the client
- Which activities will be carried out by you
Keeping Client Informed About the Matter
What must a client be able to make informed decisions about?
- The services they need
- How they matter will be handled
- The options available to them
Keeping Client Informed About the Matter
What information must a client receive about pricing?
The best available information about:
- How the matter will be priced
- Likely overall cost, both at engagement and as matter progresses
If it becomes apparent initial costs will increase, you must notify the client and do not wait until the end of the matter
Complaints Handling
What three things must a client be informed of in writing at the outset?
- The right to complain
- How and to whom complaints can be made
- The right to complain to the Legal Ombudsman
Complaints Handling
How should complaints be handled?
Promptly, fairly, and free of charge
Publicity
What must you ensure that publicity in relation to your practice is not?
Inaccurate and misleading
Publicity
Is public advertising e.g. on billboards allowed?
Generally, yes
Publicity
What can you not do?
- Make unsolicited approaches to members of the public in order to advertise legal services
- Advertise in a targeted or intrusive way
Publicity
What is an exception to the rule that you may not make unsolicited approaches or advertise in a targeted way?
You may approach current and former clients to advertise legal services
