Chapter 1: Regulatory and Legal Environment

Question 1

Regulatory Environment - Introduction

Answer 1

This element explores the meaning of ‘professional’ and introduces the concept that as lawyers our conduct is regulated and that we have obligations to our clients and the public

Question 2

Regulatory Environment - Introduction

Answer 2

‘Professionals are governed by codes of ethics and profess commitment to competence, integrity and morality, altruism and the promotion of the public good within their expert domain. Professionals are accountable to those served and to society’. As legal professionals, we are accountable to our clients and to the public.

Question 3

As lawyers we are legal professionals. What does ‘profession’ mean?

Answer 3

• ‘Any type of work that needs special training or a particular skill, often one that is respected because it involves a high level of education’, Cambridge English Dictionary
• ‘An indicator of trust and expertise’, Professional Standards Council, Australia
• ‘Professionalism comprises the personally held beliefs about one’s own conduct as a professional. It is often linked to the upholding of the principles, laws, ethics and conventions of a profession as a way of practice’, Professional Standards Council, Australia

Question 4

What does ‘ethics’ mean?

Answer 4

‘moral principles that govern a person’s behaviour or the conducting of an activity’, Oxford English Dictionary

Question 5

Key aspects of being a legal professional:

Answer 5

• Professionalism requires knowledge, skill, expertise and a high level of education and training
• but also trust, ethics, morality and integrity.
• Trust and morality are important because legal professionals owe a duty to promote the public good, not just the interests of their clients.
• These principles apply to you as lawyers, in your personal life as well as your professional life.

Question 6

As a lawyer you will need to comply with:

Answer 6

• Legal
• Regulatory
• Ethical

Question 7

Summary

Answer 7

• Professionalism requires knowledge and expertise but also trust and morality.

-Legal professionals owe a duty to the public as well as to their clients.

-Lawyers need to comply with legal, regulatory and ethical requirements in their personal as well as their professional lives.

Question 8

Regulators

Answer 8

This element explores the regulatory bodies that govern the conduct of legal professionals.

There are a number of bodies that regulate the legal profession

Legal Services Board regulates all lawyers in England and Wales.

Solicitors Regulation Authority (‘SRA’) regulates solicitors, law firms and individuals who work for businesses authorised by the SRA.

Bar Standards Board regulates barristers.

Chartered Institute of Legal Executives (‘CILEx’) regulates legal executives.

Council for Licensed Conveyancers regulates licensed conveyancers.

Costs Lawyers Standards Board regulates costs lawyers

Question 9

To whom can a client complain?

Answer 9

• Law Firm
• Legal Ombudsman
• SRA
• Solicitors Disciplinary Tribunal

Question 10

Law Firm

Answer 10

The SRA requires that every law firm has a complaints procedure.

If a client is unhappy with the service, the client’s first step is to follow the law firm’s complaints procedure.

Question 11

Legal Ombudsman (‘LO’)

Answer 11

If the firm’s internal complaints procedure is exhausted, individuals, small businesses, charities, clubs and trusts can refer complaints about poor service and fees/bills from solicitors to the LO.

The LO can require the solicitor to:

• apologise;
• pay compensation;
• correct or put right an error or omission;
• take specific action in the interests of the complainant;
• pay for the costs of the complaint;
• limit the firm’s fees.

Crucially the LO has no powers to discipline or fine a lawyer; the LO’s primary function is to resolve complaints.

Question 12

SRA

Answer 12

The SRA sets the principles and code of conduct that solicitors and lawyers regulated by the SRA must comply with.

If the client has a complaint that is concerning misconduct, dishonesty or breaches of the SRA’s rules, they can complain to the SRA. The SRA has the power to:

• issue a warning to the firm;
• impose a disciplinary sanction, eg a fine;
• reprimand the solicitor for professional misconduct;
• order the solicitor to repay or refund the whole or part of the costs to the client;
• impose restrictions on a lawyer’s ability to practise;
• institute disciplinary proceedings before the Solicitor’s Disciplinary Tribunal;
• revoke recognition of a firm; and
• close down a firm.

Question 13

Solicitors Disciplinary Tribunal (‘SDT’)

Answer 13

The SDT is an independent statutory body. It deals with serious breaches of the SRA’s rules and disciplines solicitors. Its powers include power to:

• strike a solicitor off the roll;
• suspend a solicitor from practice for a fixed or indefinite period;
• reprimand a solicitor;
• impose a fine;
• award costs against a party to proceedings; and
• make a restriction order, imposing a restriction on the area in which a solicitor can practice.

The SDT does not have power to award compensation.

Ultimately the only option left if the client is not happy would be court action.

Question 14

The Law Society

Answer 14

• Represents solicitors in England and Wales to the public.
• Supports solicitors in their careers and practice.
• Is there to fight your corner.

Question 15

Summary

Answer 15

· A number of bodies regulate the conduct of the legal profession in England and Wales.

· The SRA regulates law firms and individual lawyers who work in businesses authorised by the SRA.

· Clients who are unhappy with the service they receive should complain to the firm, the Legal Ombudsman and may also have the right to complain to the SRA.

· The SRA has power to refer a complaint about a solicitor to the Solicitors Disciplinary Tribunal (‘SDT’).

· The SDT has power to strike a solicitor off the roll of solicitors.

Question 16

SRA Standards and Regulations 2019

Answer 16

This element explores three components of the SRA Standards and Regulations 2019: the SRA Principles, CCS and CCF.

Whether you work in a big or small firm, in-house or want to work outside a regulated law firm, all solicitors must follow certain rules and meet high ethical standards’ SRA.

This element will provide an overview of how three key parts of the Solicitors Regulation Authority’s (‘SRA’) regulations interact.

Question 17

SRA Standards and Regulations 2019

Answer 17

The SRA sets out the ethical and professional standards it expects from solicitors, law firms, people that work in those law firms and other legal businesses in the SRA Standards and Regulations 2019 (‘SRA Standards and Regulations’). The SRA Standards and Regulations comprise a number of documents. Key documents include:

SRA Principles (‘Principles’)

Code of Conduct for Solicitors, Registered European Lawyers and Registered Foreign Lawyers (‘CCS’)

Code of Conduct for Firms (‘CCF’)

SRA Accounts Rules

The SRA Accounts Rules regulate how law firms hold and manage clients’ money.

Question 18

Maintaining Trust and Acting Fairly

Answer 18

Maintaining trust and acting fairly

In this element we will consider how:

• many of the Solicitors Regulation Authority (‘SRA’) Principles (each a ‘Principle’) require legal professionals to maintain trust and act fairly
• maintaining trust and acting fairly can conflict with the Principle to act in the best interests of each client
• acting with integrity differs from acting with honesty; and
• Code of Conduct for Solicitors, Registered European Lawyers and Registered Foreign Lawyers (‘CCS’)​ 1 requires individuals to maintain trust and act fairly, including:
• CCS 1.1: you do not unfairly discriminate
• CCS 1.2: you do not abuse your position by taking unfair advantage of clients or others
• CCS 1.4: you do not mislead your clients, the courts or others.

Question 19

Maintaining trust and acting fairly

Answer 19

Many of the Principles require legal professionals to maintain trust and act fairly:

Principle 1: acting in a way that upholds the constitutional principle of the rule of law, and the proper administration of justice.

Principle 2: acting in a way that upholds public trust and confidence in the solicitors’ profession and in legal services provided by authorised persons

Principle 3: acting with independence

Principle 4: acting with honesty

Principle 5: acting with integrity

Principle 7: acting in the best interests of each client

Question 20

Principle 7: acting in the best interests of each client.

Answer 20

Although you must act in the best interests of each client, you must also act with independence, honesty and integrity. If the client wants to do something dishonest or illegal, you cannot help them do it.

For example, if your client wants you to lie to a court or other person or body, you must refuse to do so.

Question 21

What’s the difference between acting with honesty and acting with integrity?

Answer 21

Integrity is broader than honesty.

For example, if you mislead a client or the court, you have not breached Principle 4 (honesty), but you have breached Principle 5 (integrity).

Question 22

What’s the difference between acting with honesty and acting with integrity?

Answer 22

Integrity is about being scrupulous, careful and accurate.

The SRA might take action against an individual for lack of integrity where they have:

Taken unfair advantage of a client or a member of the public

Allowed another person to take unfair advantage of someone else

Misled another person or stood by and allowed another person to be misled

Question 23

CCS: maintaining trust and acting fairly

Answer 23

The first section of CCS relates to maintaining trust and acting fairly. It is about upholding the trust that the public needs to have in the legal profession. The following paragraphs of CCS are relevant:

CCS 1.1 ‘You do not unfairly discriminate by allowing your personal views to affect your professional relationships and the way in which you provide your services.’

CCS 1.2 ‘You do not abuse your position by taking unfair advantage of clients or others.’

CCS 1.4 ‘You do not mislead or attempt to mislead your clients, the court or others, either by your own acts or omissions or allowing or being complicit in the acts or omissions of others (including your client).’

Question 24

CCS 1.1

Answer 24

‘You do not unfairly discriminate by allowing your personal views to affect your professional relationships and the way in which you provide your services.’

To comply with this standard you must ensure that your personal views do not affect the way you provide legal services. For example, a solicitor with strong religious or political views should not allow those views to stop them from complying with Principle 7, acting in the best interests of their client.

CCS 1.2

Question 25

‘You do not abuse your position by taking unfair advantage of clients or others.’

Answer 25

For example, you could be instructed on a matter and find yourself opposite a party with no legal representation. You should not take advantage of the other party’s lack of legal knowledge.

Dealing with an unrepresented client can be challenging.

If the unrepresented party produces a badly drafted document, you should suggest they find a lawyer. If they do not, you need to maintain a balance between acting in your client’s best interest and not taking advantage of the opponent’s lack of legal knowledge and drafting skills.

Question 26

CCS 1.4

Answer 26

‘You do not mislead or attempt to mislead your clients, the court or others, either by your own acts or omissions or allowing or being complicit in the acts or omissions of others (including your client).’

Misleading a client:

• Telling a prospective client they have a strong case in order to get the work, when they don’t.
• Telling them the case is going well when it is going badly.

Misleading the court:

• Not disclosing a case or statutory provision to the court which goes against the argument you are presenting for your client.

Misleading others:

Making false representations on behalf of a client to a third party. For example, telling prospective purchasers of your client’s company that it is a good or bad deal. You should not give your personal opinion on the value of a deal to anyone involved.

Question 27

Principles 1, 2, 3, 4, 5 and 7 are connected to the requirement to maintain trust and act fairly.

Answer 27

ü Although you must act in the best interests of each client, you must also act with independence, honesty and integrity. If the client wants to do something dishonest or illegal, you cannot help them do it.

ü Acting with integrity is broader than acting honestly.

ü Integrity is about being scrupulous, careful and accurate.

ü CCS 1 requires individuals to maintain trust and act fairly, for example:

ü CCS 1.1: you do not unfairly discriminate

ü CCS 1.2: you do not abuse your position by taking unfair advantage of clients or others

ü CCS 1.4: you do not mislead your clients, the court or others.

Question 28

Equality, Diversity and Inclusion

Answer 28

This element explores the concepts of equality, diversity and inclusion.

‘Whether you are a manager or an employee, you have a role to play in implementing EDI policies… You must act with integrity and honesty and in a way which is fair, inclusive and transparent.’

**SRA, Guidance on the SRA’s approach to equality, ** diversity and inclusion, 23 July 2019.

Equality, diversity and inclusion (‘EDI’) applies to everyone

Question 29

Meaning of Equality, Diversity and Inclusion

Answer 29

In this element we will explore:

• what equality, diversity and inclusion mean
• why EDI is important
• the protection required under the Equality Act 2010
• the SRA’s requirements on EDI under Principle 6 and CCS
• the SRA’s guidance note on its approach to EDI
• how most employers have a policy on EDI

Before working through this element, please read the SRA’s Guidance on its approach to equality, diversity and inclusion which can be found on the SRA website here:

https://www.sra.org.uk/solicitors/guidance/ethics-guidance/guidance-on-the-sra-s-approach-to-equality-diversity-and-inclusion/

Question 30

Meaning of Equality, Diversity and Inclusion

Answer 30

What do equality, diversity and inclusion mean?

Equality is about making sure there is a level playing field and people are treated fairly.

Diversity is about encouraging and valuing people with a broad range of different backgrounds, knowledge, skills and experiences.

Inclusion is about accepting people for who they are and encouraging everyone to participate and contribute.

Question 31

Importance of EDI

Answer 31

The SRA states that EDI is important for many reasons, including:

The effective administration of justice. A diversity of views and approaches, whether in law firms or the judiciary, support an independent justice system and maintains the rule of law.

Improving access to services. Some people may be more likely to seek legal help from solicitors with whom they share some social or cultural characteristics.

Allowing the most talented people to become solicitors and progress in their careers which helps to maintain high standards.

Question 32

Equality Act 2010

Answer 32

The Equality Act 2010 protects people from discrimination in the workplace and in wider society against the following protected characteristics:

• age
• disability
• gender reassignment
• marriage and civil partnership
• pregnancy and maternity
• race
• religion or belief
• sex
• sexual orientation

Question 33

Equality Act 2010

Answer 33

Legislation sets minimum legal obligations, eg that an employer takes steps to remove potential discrimination, harassment and victimisation.

The SRA’s obligations extend beyond strict compliance with the law.

SRA requirements relating to EDI

What are the SRA’s requirements on EDI?

Principle 6: You must act in a way that encourages equality, diversity and inclusion.

CCS 1.1 ‘You do not unfairly discriminate by allowing your personal views to affect your professional relationships and the way in which you provide your services.’

CCS 1.2 ‘You do not abuse your position by taking unfair advantage of clients or others.’

CCS 3.4 ‘You consider and take account of your client’s attributes, needs and circumstances.’

Question 34

Guidance on the SRA’s approach to EDI

Answer 34

The SRA has issued a guidance note to help firms and individuals understand their obligations on EDI. You must:

Provide reasonable adjustments to disabled clients and employees to make sure they are not at a substantial disadvantage compared to those that are not disabled. You must not pass on the costs of providing these adjustments to others. Encourage diversity at all levels of the workforce.Collect, report and publish data about the diversity of your workforce.Uphold the reputation of the profession in your professional and personal life and treat people fairly and with dignity and respect. You should ensure your personal views do not have a negative impact on others. This includes expressing extreme personal, moral or political opinions on social media.Be fair and inclusive in your interactions with people you meet and deal with in the course of your work.

Question 35

Guidance on the SRA’s approach to EDI

Firms must:

Answer 35

Have a complaints procedure and make sure complaints including those of discrimination, harassment and victimisation are dealt with promptly, fairly and effectively

Question 36

Firms and other employers may wish to:

Answer 36

· produce a statement about EDI for their workforce, clients and the people they work with.

Monitor and analyse the diversity of their staff and clients.Draft and implement an EDI policy outlining the employer’s approach to recruitment, retention and progression and to encourage equality of opportunity and respect for diversity.Attract the best staff: have a recruitment policy and fair process for promotions to maximise the chances of getting and retaining the best people for each role.

Question 37

Summary

Answer 37

EDI is important for many reasons including the effective administration of justice, improving access to legal services and allowing the most talented people to progress in their legal careers.The Equality Act 2010 imposes legal obligations to protect people from discrimination.The SRA’s obligations extent beyond strict compliance with the law.The key requirements are contained in Principle 6, CCS 1.1, 1.2 and 3.4.The SRA’s document Guidance on the SRA’s approach to EDI contains further guidance on solicitors’ obligations in relation to EDI.All employers should have an EDI policy.

Question 38

The Equality Act 2010

Answer 38

In this element we will introduce key requirements under the Equality Act 2010:

• what the protected characteristics are
• key categories of unlawful discrimination under the Act, namely direct discrimination, indirect discrimination, harassment and victimisation, and
• the requirement to take positive steps to reduce the barriers disabled people face by making reasonable adjustments.

Question 39

Equality Act 2010

Answer 39

The Equality Act 2010 (‘the Act’) came into force in October 2010.

The Act consolidates and replaces the previous discrimination legislation.

The Act provides a legal framework to protect the rights of individuals and advance equality of opportunity for all.

It provides Britain with a discrimination law which protects individuals from unfair treatment and promotes a fair and more equal society.

Question 40

Equality Act 2010

Answer 40

As well as consolidating existing law, the Act makes discrimination unlawful in circumstances not covered previously. Under the Act, discrimination in most areas of activity is unlawful subject to certain exceptions.

These areas of activity include employment and other areas of work, education, housing, the provision of services, the exercise of public functions and membership of associations.

Question 41

Protected Characteristics

Answer 41

The Act protects people from discrimination because of the following protected characteristics:

• age
• disability
• gender reassignment
• marriage and civil partnership
• pregnancy and maternity
• race
• religion or belief
• sex
• sexual orientation

Question 42

Types of discrimination

Answer 42

The Act identifies different types of discrimination and unlawful conduct, including:

Direct discrimination

Indirect discrimination

Harassment

Victimisation

Question 43

Direct discrimination

Answer 43

Direct discrimination occurs where “because of a protected characteristic, A treats B less favourably than A treats or would treat others” (section 13(1) Equality Act 2010)

An example of direct discrimination would be:

A club that organises salsa evenings deletes a woman from their list as soon as they learn that she is pregnant, on the assumption that during her pregnancy she will not want to come to salsa evenings. This decision resulting in unfavourable treatment based on a stereotype is likely to be pregnancy discrimination.

Note that, under section 13(6)(b) of the Act, in considering discrimination against a man, it is not relevant to take into account any special treatment given to a woman in connection with pregnancy or childbirth.

Question 44

Indirect discrimination

Answer 44

Indirect discrimination is concerned with acts, decisions or policies (broadly speaking) which are not intended to treat anyone less favourably, but which have the effect of disadvantaging a group of people with a protected characteristic. Under the statutory definition of indirect discrimination in section 19 of the Act:

A discriminates against B where:

• A applies to B a provision, criterion or practice (‘PCP’)
• B has a protected characteristic
• A also applies or would apply that PCP to persons who do not share B’s protected characteristic
• The PCP puts or would put persons with whom B shares the characteristic at a particular disadvantage compared to others
• The PCP puts or would put B to that disadvantage
• A cannot show the PCP to be a proportionate means of achieving a legitimate aim.

Question 45

Indirect discrimination: example

Answer 45

A classic example of indirect discrimination is an employer requiring an employee to work full-time.

This requirement could disadvantage women as a group, since women in society as a whole bear a greater part of domestic and childcare responsibilities than men and are more likely to want (or need) to work part time.

Unless the employer can objectively justify the need for a full-time worker to do the job, the requirement could be indirectly discriminatory against a woman with child care responsibilities.

Question 46

Harassment

Answer 46

There are three definitions of harassment in section 26 of the Act:

• the general definition of harassment related to a protected characteristic,
• conduct of a sexual nature, and
• less favourable treatment because of a person’s rejection of or submission to harassment of a sexual nature or harassment related to sex or gender reassignment.

We will focus on the general definition of harassment in this element.

Question 47

General definition of harassment

Answer 47

A harasses B if A engages in unwanted conduct related to a relevant protected characteristic which has the purpose or effect of either:

• violating B’s dignity, or
• creating an intimidating, hostile, degrading, humiliating or offensive environment for B (section 26(1)).

In deciding whether conduct shall be regarded as having the required effect, the following must be taken into account:

• B’s perception
• the other circumstances of the case
• whether it is reasonable for the conduct to have that effect (section 26(4))

Question 48

General definition of harassment

Answer 48

An example of harassment would be:

• Two male shop assistants loudly commented on the size of a female shopper’s breasts. This could amount to harassment. Such comments could self evidently be unwanted and she would not have to object to it before it was deemed to be unlawful harassment.

Question 49

Victimisation

Answer 49

The Act’s victimisation provisions protect individuals who do (or might do) protected acts such as bringing discrimination claims, complaining about harassment or becoming involved in another person’s discrimination complaint.

Victimisation occurs where A subjects B to a detriment because either:

• B has done a protected act, or
• A believes B has done, or may do, a protected act (section 27(1)).

Question 50

The following protected acts are list in section 27(2):

Answer 50

• bringing proceedings under the Equality Act 2010;
• giving evidence or information in connection with proceedings under the Equality Act 2010, regardless of who brought those proceedings;
• doing any other thing for the purposes of or in connection with the Equality Act 2010;
• alleging (whether expressly or otherwise) that A or another person has contravened the Equality Act 2010.

Question 51

Victimisation: Example

Answer 51

A gay man sues a publican for discrimination on the basis that she makes persistent derogatory remarks to other customers about his sexuality. Because of this, the publican bars him from the pub altogether. This would be victimisation.

Question 52

Disability provisions of the Equality Act 2010

Answer 52

While the anti-discrimination regime of the Act prohibits certain types of behaviour, the disability provisions require the taking of active steps.

The disability provisions recognise that a level playing field for disabled people necessitates not only the absence of negative treatment, but also positive steps to reduce the barriers that disabled people may face.

The starting point is section 29: provision of services.

Question 53

Provision of services

Answer 53

Section 29 of the Act states:

(1) A person (a “service-provider”) concerned with the provision of a service to the public or a section of the public (for payment or not) must not discriminate against a person requiring the service by not providing the person with the service.

(2) A service-provider (A) must not, in providing the service, discriminate against a person (B):

(a) as to the terms on which A provides the service to B;

(b) by terminating the provision of the service to B:

(c) by subjecting B to any other detriment.

(d) 7) A duty to make reasonable adjustments applies to:

(e) (a) a service-provider

Question 54

EHRC Guidance

Answer 54

The Equality and Human Rights Commission (‘EHRC’) has published summary guidance on services, public functions and associations:

https://www.equalityhumanrights.com/en/publication-download/equality-act-2010-summary-guidance-services-public-functions-and-associations

The summary guidance includes guidance on the duty to make reasonable adjustments for disabled people. The rest of this element sets out key points from this guidance.

Question 55

Duty to make reasonable adjustments

Answer 55

The duty to make reasonable adjustments aims to make sure that a disabled person can use a service as close as it is reasonably possible to get to the standard usually offered to non-disabled people. When the duty arises, a service-provider is under a positive duty to take steps to remove or prevent these obstacles.

Question 56

Duty to make reasonable adjustments

Answer 56

Anyone providing goods, facilities or services to the public or a section of the public, or carrying out public functions, or running an association who finds that there are barriers to disabled people in the way they do things must consider making adjustments. If those adjustments are reasonable they must be made.

Question 57

Duty is anticipatory

Answer 57

The duty is ‘anticipatory’. This means a service provider cannot wait until a disabled person wants to use the service. They must think in advance (and on an ongoing basis) about what disabled people with a range of impairments (such as people who have a visual or hearing impairment, a mobility impairment or a learning disability) might reasonably need.

Question 58

Duty to make reasonable adjustments

Answer 58

Many adjustments will not be particularly expensive and a service-provider is not required to do more than is reasonable. What is reasonable depends, among other factors, on the size and nature of the organisation, the nature of the goods, facilities or services provided and the resources available.

Question 59

Duty to make reasonable adjustments

Answer 59

If a disabled person can show that there were barriers that should have been identified and reasonable adjustments that could have been made, they can bring a claim if they have received a poor or inferior service because those adjustments were not made. The service-provider may be ordered to pay compensation and may also be ordered to make the reasonable adjustments.

Question 60

Duty to make reasonable adjustments

Answer 60

The duty contains three requirements that apply in situations where a disabled person would otherwise be placed at a substantial disadvantage compared with people who are not disabled.

The first requirement involves changing the way things are done (equality law calls this a provision, criterion or practice). This relates to rules or ways of doing things, whether written or unwritten, that could present barriers to disabled people. It might be reasonable to stop the practice completely, or to change it so that it no longer has that effect.

Question 61

Example:

Answer 61

A private club has a policy of refusing entry during the evening to male members who do not wear a shirt and tie. A disabled member who wishes to attend in the evening is unable to wear a tie because he has psoriasis (a severe skin complaint) of the face and neck. Unless the club is prepared to change its policy at least for this member, its effect is to exclude the disabled member from the club. This is likely to be an unlawful failure to make a reasonable adjustment.

Question 62

Duty to make reasonable adjustments

Answer 62

The second requirement involves making changes to overcome barriers created by the physical features of premises, if these are open to the public or a section of the public.

Where a physical feature puts disabled people using a service at substantial disadvantage, the service provider must take reasonable steps to:

Question 63

Duty to make reasonable adjustments

Answer 63

• remove the feature, or
• alter it so that it no longer has that effect, or
• provide a reasonable means of avoiding the feature, or
• provide a reasonable alternative method of making the service available to disabled people.

Question 64

Duty to make reasonable adjustments

Answer 64

It is better to remove or alter the physical feature or find a way of avoiding it (such as replacing steps with a ramp or, if it is reasonable, a lift) before looking at providing an alternative service. An alternative service may not give disabled people a similar level of service.

Question 65

Duty to make reasonable adjustments

Answer 65

Examples:

A pub improves the paths in its beer garden so that the outside space can be accessed by disabled customers with a mobility impairment or a visual impairment.

A small shop paints its doorframe in a contrasting colour to assist customers with a visual impairment.

Question 66

Duty to make reasonable adjustments

Answer 66

The third requirement involves providing extra aids and services such as providing extra equipment or providing a different, or additional, service (which equality law calls auxiliary aids or auxiliary services). A service provider must take reasonable steps to provide auxiliary aids or services if this would enable (or make it easier for) disabled people to make use of the service.

Question 67

Examples:

Answer 67

A shop keeps a portable induction loop on its counter so conversations with staff can be heard more easily by disabled people who use hearing aids.

A leisure centre has a regular booking by a group of Deaf people. The leisure centre makes sure that the members of staff who have had basic training in British Sign Language (BSL) are rotated to work on that day to make sure that the Deaf customers get the same level of service that other people would expect.

Question 68

Summary

Answer 68

The Equality Act 2010 (the “Act’) provides a legal framework to protect the rights of individuals and advance equality of opportunity for all.The Act protects people from discrimination because of age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation. These categories are known in the Act as ‘protected characteristics’. Discrimination can take the form of direct discrimination, indirect discrimination, harassment or victimisation. The disability provisions of the Act recognise that a level playing field for disabled people necessitates not only the absence of negative treatment, but also positive steps to reduce the barriers that disabled people may face.Service-providers must make reasonable adjustments to their services in situations where a disabled person would otherwise be placed at a substantial disadvantage compared with people who are not disabled.

Question 69

Dealings with the court

Answer 69

In this element we will consider:

• what an undertaking is;
• the SRA’s requirements in relation to undertakings;
• good practice in relation to giving undertakings;
• the SRA’s requirement that solicitors do not mislead the court; and
• the SRA’s requirement to ensure that solicitors conduct themselves properly before the court and comply with their overriding duty to the court.

Question 70

SRA Principles

Answer 70

The rules on undertakings and dealings with the court stem from the following SRA Principles requiring solicitors to act:

Principle 1: in a way that upholds the constitutional principle of the rule of law, and the proper administration of justice.

Principle 2: in a way that upholds public trust and confidence in the solicitors’ profession and in legal services provided by authorised persons.

Principle 3: with independence

Principle 4: with honesty

Principle 5: with integrity

Question 71

What is an undertaking

Answer 71

An “undertaking” is defined in the SRA Glossary as:

‘a statement, given orally or in writing, whether or not it includes the word ‘undertake’ or ‘undertaking’ to someone who reasonably places reliance on it, that you or a third party will do something or cause something to be done, or refrain from doing something’.

Undertakings are also often used to overcome practical difficulties in many areas of practice to smooth the path of a transaction or to speed up its progress. Undertakings are given and accepted, because solicitors are professional persons whose word is to be relied upon.

Examples of undertakings include:

• an undertaking by a seller’s solicitor in a property transaction to forward part of the sale proceeds to procure the discharge of the seller’s mortgage on the property;
• an undertaking to the court that a document will be filed on behalf of a client by a particular date;
• an undertaking to hold money to another firm’s order prior to the occurrence of a specific event.

Question 72

CCS 1.3 on undertakings

Answer 72

Paragraph 1.3 of the Code of Conduct for Solicitors, RELs and RFLs (‘CCS’) states:

CCS 1.3: You perform all undertakings given by you, and do so within an agreed timescale or if no timescale has been agreed then within a reasonable amount of time.

Warning:

• Failure to perform an undertaking can be a serious disciplinary offence, with the solicitor(s) concerned being investigated by the SRA for professional misconduct.
• An undertaking can be given by any individual in a law firm provided it can be reasonably relied upon by the recipient. An undertaking could be given by a partner, a qualified lawyer, an apprentice, secretary or any other individual in the firm

Question 73

CCS 1.3 on Undertaking

Answer 73

• An undertaking does not have to be given in writing. An oral statement can amount to an undertaking.
• The word ‘undertaking’ does not have to be said or written for a statement to amount to an undertaking. Junior solicitors should be wary when promising to deliver copies or originals of documents to a third party: NEVER promise to do something which is outside your control.

Question 74

Undertakings: Good practice

Answer 74

• It is advisable for law firms to maintain an effective system of recording when undertakings have been given and when they have been discharged.
• Firms will usually have procedures in place to procure that undertakings are complied with. For example, if your firm gives an undertaking to pay another firm’s costs, your firm will usually require your client to put the firm in funds to cover the relevant amount before you give the undertaking. In such circumstances, electronic accounting safeguards will be put in place so that the money reserved to cover the undertaking is not inadvertently used on the client’s behalf to pay for something else.

Question 75

Undertakings: Good practice

Answer 75

• Firms often distinguish between everyday transactional undertakings and undertakings to pay another party’s costs. Firms will usually have internal policies as to who can give the latter type of undertaking, which is often restricted to partners or senior lawyers only.
• Undertakings are specifically enforceable, so most firms will try to maintain a register of undertakings given, recording what has been promised to whom and by who.

Question 76

Form of undertakings

Answer 76

Undertakings must be drafted carefully. The form of any undertaking should be ‘SMART’:

• Specific: be clear as to what is involved
• Measured: it must be capable of quantification
• Agreed: both sides must agree the wording
• Realistic: within solicitor’s control
• Timed: must not be of unlimited duration

Any ambiguity in an undertaking will be construed in favour of the recipient.

Question 77

Dealings with the court

Answer 77

Under Section 50(1) Solicitors Act 1974, a solicitor is an ‘officer of the court’.

Consequently, solicitors should, at all times, conduct themselves in a manner which befits a member of the profession, with an overriding duty to the court. This is reflected in CCS 2, which includes paragraphs which require that you do not waste the court’s time, do not place yourself in contempt of court and only make assertions or put forward statements, representations or submissions to the court or others which are properly arguable.

Question 78

Misleading the court

Answer 78

CCS 1.4: You do not mislead or attempt to mislead your clients, the court or others, either by your own acts or omissions or allowing or being complicit in the acts or omissions of others (including your client).

• A solicitor would not normally be guilty of misconduct if they inadvertently misled the court. Under the SRA’s Indicative Behaviours (which preceded CCS) if, during the course of proceedings the solicitor became aware that they had inadvertently misled the court, they must, with their client’s consent, immediately inform the court. If the client did not consent, the solicitor must stop acting for that client.

Question 79

Misleading the court

Answer 79

• In addition, and again under the SRA’s former Indicative Behaviours, if a solicitor became aware that a client had committed perjury or misled the court or attempted to mislead the court, then the solicitor had to cease to act unless the client agreed to disclose the truth to the court.
• The extent to which the Indicative Behaviours are relevant to interpretation of CCS is not yet clear, but it is anticipated that solicitors will continue to act in accordance with them until the SRA produces guidance to the contrary.

Question 80

How might you mislead the court?

Answer 80

You might mislead the court if you do ANY of the following:

• draft documents or construct facts supporting your client’s case which are not properly arguable;
• make any allegation of crime, misconduct or fraud unless it is material to your client’s case and you have reasonable grounds for doing so;
• call a witness whose evidence you know is untrue.

Question 81

Dealing with the court

Answer 81

CCS 2 contains more detailed provisions regarding your duty to the court. For example:

CCS 2.1: You do not misuse or tamper with evidence or attempt to do so.

CCS 2.2: You do not seek to influence the substance of evidence, including generating false evidence or persuading witnesses to change their evidence

CCS 2.3: You do not provide or offer to provide any benefit to witnesses dependent upon the nature of their evidence or the outcome of the case.

CCS 2.4: You only make assertions or put forward statements, representations or submissions to the court or others which are properly arguable.

Question 82

Dealings with the court

Answer 82

Also:

CCS 2.5: You do not place yourself in contempt of court, and you comply with court orders which place obligations on you.

CCS 2.6: You do not waste the court’s time.

CCS 2.7: You draw the court’s attention to relevant cases and statutory provisions, or procedural irregularities of which you are aware, and which are likely to have a material effect on the outcome of the proceedings.

Question 83

Summary

Answer 83

· Undertakings are given and accepted, because solicitors are professional persons whose word is to be relied upon. They are often used to overcome practical difficulties to smooth the path of a transaction or to speed up its progress.

· CCS 1.3 requires solicitors to perform all undertakings given by them, and to do so within an agreed timescale or if no timescale has been agreed then within a reasonable amount of time.

· Failure to perform an undertaking can be a serious disciplinary offence and most firms have systems in place to ensure that undertakings are complied with.

· A solicitor is an ‘officer of the court’ and they should conduct themselves in a manner which befits a member of the profession, with an overriding duty to the court.

· CCS 1.4 contains a requirement that solicitors do not mislead the court.

· CCS 2 contains a number of requirements to ensure that they not waste the court’s time and only make assertions which are properly arguable.

Question 84

Dealing with the clients and other people

Answer 84

As a legal professional, you will deal with many different people including: clients, members of the public, the court, and other professionals including barristers, medical or other technical experts, social workers, lawyers on the other side of your transaction, officials at the Land Registry and Companies House.

The SRA have issued a lot of rules and guidance notes on how legal professionals should deal with their clients. We will touch on some key themes in this element.

We will also consider some of the regulations relating to a solicitor or other legal professional’s dealings with other people and the court in this element.

Question 85

Dealing with clients

Answer 85

Some key provisions of the Principles and CCS related to dealing with clients include:

Principle 7: You must act in the best interests of each client

CCS 3.2: You ensure the service you provide to clients is competent and delivered in a timely manner.

CCS 4.2: You safeguard money and assets entrusted to you by clients and others.

Question 86

Your service and competence

Answer 86

CCS 3.2: You ensure the service you provide to clients is competent and delivered in a timely manner.

An important part of providing a good service to your clients is to ensure that you are competent to do so.

You need to ensure that you are competent to carry out the work you are required to do:

• You should not send work to a client unless it has been checked by your supervisor.
• If you do not know how to do the work, you must get help from someone.
• You also need to ensure that you keep your legal knowledge up to date in order to comply with CCS 3.3 and CCS 7.1.

CCS 3.3: You maintain your competence to carry out your role and keep your professional knowledge and skills up to date.

CCS 7.1: You keep up to date with and follow the law and regulation governing the way you work.

Question 87

Your service and competence

Answer 87

CCS 3.4: You consider and take account of your client’s attributes, needs and circumstances.

You also need to ensure that you take account of your client’s attributes, needs and circumstances when providing legal advice. You will not be taking account of your client’s needs, if you attempt to provide a service you are not competent to perform.

Question 88

Your service and competence

Answer 88

Your managers also have an obligation to ensure that you are competent to carry out your work.

CCS 3.5: Where you supervise or manage others providing legal services:

(a) you remain accountable for the work carried out through them; and

(b) you effectively supervise work being done for clients

CCS 3.6: You ensure that the individuals you manage are competent to carry out their role and keep their professional knowledge and skills, as well as understanding of their legal, ethical and regulatory obligations, up to date.

Question 89

Safeguarding Money and Assets

Answer 89

CCS 4.2: You safeguard money and assets entrusted to you by clients and others.

As a solicitor or legal professional, you may be entrusted with money or assets belonging to another person.

You might be entrusted with client’s money – in which case you need to comply with the SRA Accounts Rules to ensure that you protect that money. You will also need to comply with other legal obligations, eg anti- money laundering regulations

Question 90

Undertakings

Answer 90

In addition, as a trusted third party, there are often situations where you give another party your word or promise that you will do something. If the other party relies on your promise, you have to do what you promised to do. This is called an ‘undertaking’.

Undertakings are often used to overcome practical difficulties in transactions. Undertakings are given and accepted because solicitors are professionals whose word can be relied on.

An example of an undertaking is an undertaking to the court that a document will be filed on behalf of a client by a particular date.

Question 91

Undertakings

Answer 91

CCS 1.3: You perform all undertakings given by you, and do so within an agreed timescale or, if no timescale has been agreed, then within a reasonable amount of time

Failing to comply with an undertaking can be a serious disciplinary offence, with the solicitor being investigated by the SRA for professional misconduct. Most law firms have strict procedures that must be followed before an employee gives an undertaking

Question 92

Dealing with the court

Answer 92

In order to comply with Principles 1 and 2, solicitors and legal professionals must act with integrity when dealing with the court.

Principle 1: act in a way that upholds the constitutional principle of the rule of law, and the proper administration of justice.

Principle 2: act in a way that upholds public trust and confidence in the solicitors’ profession and in legal services provided by authorised persons.

Question 93

Dealing with the court

Answer 93

CCS 2 contains more detailed provisions regarding your duty to the court. For example:

CCS 2.1: You do not misuse or tamper with evidence or attempt to do so.

CCS 2.2: You do not seek to influence the substance of evidence, including generating false evidence or persuading witnesses to change their evidence.

Question 94

Summary

Answer 94

· As a legal professional you will deal with many different people including clients, members of the public, the lawyers on the other side of a transaction and the court.

· The parties you deal with will trust that your behaviour meets a professional standard.

· Your clients will rely on your legal knowledge being up to date and trust that you can provide a competent service.

· You are obliged under CCS to ensure you provide a competent service and keep your knowledge up to date. Your managers are obliged under CCS to ensure your work is effectively managed.

· You must keep money or assets that clients entrust to you safe.

· Other professionals will trust you to keep your word when you give them an undertaking.

· You must act with integrity when dealing with the court.

Question 95

Other ethical issues: publicity, introductions and referrals

Answer 95

Other ethical issues: publicity, introductions and referrals

This element provides an overview of the SRA’s requirements on publicity, introductions and referrals.

Other ethical issues: publicity, introductions and referrals

In this element we will consider:

• the SRA’s requirements in relation to publicity;
• the SRA’s requirements in relation to introductions and referral arrangements; and
• an introduction to the requirements under the Bribery Act 2010.

Before working through this element, please read the paragraphs 5.1, 5.2 and 8.8 and 8.9 of the Code of Conduct for Solicitors, RELs and RFLs (‘CCS’) and the SRA Transparency Rules both of which can be found on the SRA website here:

https://www.sra.org.uk/solicitors/standards-regulations/

Question 96

CCS requirements in relation to publicity

Answer 96

The SRA’s key concern is that firms’ publicity is not misleading.

CCS 8.8: you ensure that any publicity in relation to your practice is accurate and not misleading, including that relating to your charges and the circumstances in which interest is payable by or to clients.

Publicity is defined in the SRA Glossary as including:

‘all promotional material and activity, including the name or description of your firm, stationery, advertisements, brochures, websites, directory entries, media appearances, promotional press releases, and direct approaches to potential clients and other persons, whether conducted in person, in writing or in electronic form, but does not include press releases prepared on behalf of a client’.

Question 97

Publicity is defined in the SRA Glossary as including:

Answer 97

‘all promotional material and activity, including the name or description of your firm, stationery, advertisements, brochures, websites, directory entries, media appearances, promotional press releases, and direct approaches to potential clients and other persons, whether conducted in person, in writing or in electronic form, but does not include press releases prepared on behalf of a client’.

Question 98

Unsolicited approaches

Answer 98

Solicitors are not permitted to publicise their firm by making unsolicited approaches in person or telephone calls to members of the public, with the exception of current or former clients:

CCS 8.9: you do not make unsolicited approaches to members of the public, with the exception of current or former clients, in order to advertise legal services provided by you, or your business or employer.

The types of marketing approaches which would tend to demonstrate non-compliance with 8.9 CCS (adopted for Firms) are where you approach people:

Question 99

Unsolicited approaches

Answer 99

• in the street
• at ports of entry (i.e. to the UK)
• at hospitals
• at the scene of an accident.

Question 100

SRA Transparency Rules

Answer 100

The SRA Transparency Rules (‘Transparency Rules’) contain further regulations on the information solicitors should make available to clients and potential clients. A copy of the Transparency Rules can be found on the SRA web-site here:

https://www.sra.org.uk/solicitors/standards-regulations/transparency-rules/

You should familiarise yourselves with the provisions of the Transparency Rules including the following:

• Costs information – Rule 1, and
• Regulatory information – Rule 4.

Question 101

Costs information – Rule 1

Answer 101

Authorised bodies who publish the availability of certain services to individuals and businesses must publish certain costs information on their websites. The services to individuals are listed in Rule 1.3 and include:

• conveyancing of residential property
• collection and distribution of assets following a person’s death
• immigration applications
• immigration matters
• road traffic offences
• certain advice to employees on unfair and wrongful dismissal.

Question 102

Costs information – Rule 1

Answer 102

The services in relation to businesses are listed in Rule 1.4 and include:

• certain advice to employers on unfair dismissal and wrongful dismissal;
• debt recovery up to the value of £100,000; and
• certain advice in relation to licensing applications for business premises

Question 103

What costs information must be published?

Answer 103

The costs information which must be published is listed in Rule 1.5 and includes:

• the total cost of the service or, where not practicable, the average cost or range of costs;
• the basis for the charges, including hourly rates or fixed fees;
• the experience and qualifications of anyone carrying out the work, and their supervisors;
• a description of, and the cost of, any likely disbursements;

Question 104

What costs information must be published?

Answer 104

• whether any fees or disbursements attract VAT, and if so, the amount of VAT;
• details of what services are included in the price displayed, including the key stages of the matter and the likely timescales for each stage and details of any services that might be expected to be included in the price displayed but are not; and
• if the firm uses conditional fee or damages based agreements, the circumstances in which clients may have to make any payments themselves for the services.

The cost information published must be clear and accessible and in a prominent place on the website (Rule 1.6).

Question 105

Regulatory information – Rule 4

Answer 105

What costs information must be published?

• An authorised body must display in a prominent position on its website, its SRA number and the SRA’s digital badge (Rule 4.1).
• An authorised body’s letterhead and emails must show its SRA authorisation number and the words ‘authorised and regulated by the Solicitors Regulation Authority’ (Rule 4.2).

Question 106

Introductions and referrals

Answer 106

In this element, “introduction” relates to a relationship you/a law firm has with a third party where the third party introduces or refers business TO YOU/THE LAW FIRM, for example:

A firm of estate agents agrees to refer property sellers and buyers to a law firm’s residential property department. The law firm agrees to pay the estate agent £X plus VAT in respect of each such introduction.

Question 107

Introduction and Referrals

Answer 107

A law firm runs a client recommendation incentive scheme which rewards all members of its staff for recommending the firm to friends and relations, who go on to instruct the firm. A secretary at the law firm recommends her cousin’s building firm to the construction litigation department. Her cousin’s building firm goes on to instruct the law firm and the secretary receives £250 from the law firm when her cousin’s firm pays its first bill.

Question 108

Introductions and referrals

Answer 108

“Referral” refers to an arrangement you/ a law firm might have with a third party TO WHOM you may refer or introduce clients. For example:

Your firm might have an arrangement with a surveyor’s firm whereby the surveyor pays your firm £x for each client your firm introduces to the surveyor.

Question 109

CCS 5.1

Answer 109

CCS 5.1 applies to introductions, referrals and fee sharing arrangements. The SRA’s main concern is to preserve the independence and integrity of the solicitor and/or the firm.

CCS 5.1: in respect of any referral of a client by you to another person, or of any third party who introduces business to you or with whom you share your fees, you ensure that:

(a) clients are informed of any financial or other interest which you or your business or employer has in referring the client to another person or which an introducer has in referring the client to you;

(b) clients are informed of any fee sharing arrangement that is relevant to their matter;

Question 110

CCS 5.1

Answer 110

(c) the fee sharing agreement is in writing;

(d) you do not receive payments relating to a referral or make payments to an introducer in respect of clients who are the subject of criminal proceedings; and

(e) any client referred by an introducer has not been acquired in a way which would breach the SRA’s regulatory arrangements if the person acquiring the client were regulated by the SRA.

Question 111

Introducer

Answer 111

Introducer is defined in the SRA Glossary as:

‘any person, business or organisation who or that introduces or refers clients to your business, or recommends your business to clients or otherwise puts you and clients in touch with each other’.

Question 112

Introductions

Answer 112

An introduction is where:

• a third party introduces a client to you, in return for which you make a payment (or agree to make a payment) to that third party (either within your firm or outside);
• in most cases, the payment is a fixed fee or calculated with reference to the amount being charged to the client as a percentage of your gross or net fees; and
• the third party may be another lawyer, but not necessarily so.

Introduction arrangements will often take the form of express, contractually binding written agreements, but even informal or tacit arrangements are caught by CCS 5.1.

The SRA’s main objective is the preservation of the firm’s / individual solicitor’s independence.

Question 113

Referrals

Answer 113

Applying Principle 7, you must only act in your client’s best interests when referring a client to a third party. The SRA’s concern is whether you are or may be motivated to make the referral because of some financial or other benefit, rather than because the third party is the best person to advise or support the particular needs and circumstances of your client.

Question 114

Personal injury cases

Answer 114

Section 56(1) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (‘LASPO’) prohibits solicitors from referring or receiving referrals in respect of a claimant’s claim for damages in respect of personal injury or death to each other in consideration for a referral fee. The prohibition includes making or receiving referrals through intermediaries, like claims management companies, unless the payment is genuinely for services provided.

Question 115

Personal Injury Cases

Answer 115

CCS 5.2: Where it appears to the SRA that you have made or received a referral fee, the payment will be treated as a referral fee unless you show that the payment was not made as such.

A ‘referral fee’ is defined as ‘a referral fee as defined within section 57(7) LASPO’, which is essentially a prohibited referral fee under section 56 LASPO.

The onus is on you/the law firm/the referrer to prove that any such payment was made/received in consideration for the provision of services or for any genuine reason other than a referral fee (s 57(7) LASPO).

Question 116

Commissions received from third parties

Answer 116

If you gain any tangible benefit by making the referral (financial or otherwise), there is a danger of an own interest conflict (see CCS 6.1). You need to satisfy yourself (and it is likely that your firm’s Compliance Officer for Legal Practice (‘COLP’) will also need to be satisfied) that the referral is motivated purely for the benefit of the client and that any financial benefit to you/your firm is very much a by-product of the process.

Question 117

General commissions

Answer 117

Under CCS 5.1(a), you must properly inform your client of any financial or other interest (including an introduction fee) which you or your business or employer has in referring the client to another person.

Question 118

Rules re introductions and referrals

Answer 118

Clients must be:

• informed of any financial or other interest which the introducer has in referring the client to you: CCS 5.1(a)
• informed of any fee sharing arrangement which is relevant to their matter: CCS 5.1(b)

In addition:

• you are not permitted to pay to an introducer a fee for referring clients who are the subject of criminal proceedings or whose costs are partly or wholly being publicly funded: CCS 5.1(d).

Question 119

Rules re introductions and referrals

Answer 119

• arrangements with introducers must be in writing: CCS 5.1(c).

Any client introduced by a third party must not have been acquired in a way that would breach the SRA’s regulatory arrangements, if the person acquiring the client were regulated by the SRA.

Question 120

Introductions and referrals: good practice

Answer 120

When managing and monitoring an introduction or referral, it is good practice to:

• make a statement to your client, preferably in writing, that your advice will be independent;
• provide confirmation to your client that any information disclosed to you will be confidential (especially confidential from the introducer/fee sharer); and
• where you may also be acting for the introducer on the same matter, you regularly monitor any potential client conflict issues as they might mean you will have to cease acting for one of the parties.

Question 121

Bribery Act 2010

Answer 121

• Under the Bribery Act 2010 (‘BA 2010’) it is an offence for a UK citizen or resident to pay or receive a bribe directly or indirectly.
• Companies and partnerships (including LLPs) can also commit offences where a bribe is paid on their behalf.
• Many law firms have anti-bribery policies designed to prevent their staff committing offences under BA 2010. The next slide sets out examples where there could be a risk of a member of staff committing an offence.

Question 122

How does BA 2010 affect solicitors?

Answer 122

Due diligence: law firms must ensure that the firm’s business contacts have an anti-bribery policy, and that they understand and comply with it. For example, if your firm retains an enquiry agent or ‘private detective’ to obtain information or evidence on your behalf/on behalf of a client, your firm needs to be satisfied that such information is not obtained as the product of a bribe, or the firm and/or the instructing fee earner(s) may be guilty of an offence.

Question 123

Corporate hospitality/gifts and entertainment:

Answer 123

organisations should seek to prevent giving or receiving gifts, hospitality or payments dressed-up as ‘expenses’, in situations where such payment or receipt influences a business decision (eg to instruct a firm). There is a fine line between what is permitted to legitimately develop a business relationship and what amounts to a bribe. To mitigate the risk of committing an offence under the BA 2010, law firm and other organsations should ensure that their staff understand and implement its anti-bribery policy. Such policy should, for example, contain clear guidance as to the financial limit of any such gift or payment.

Question 124

Summary 1

Answer 124

· CCS 8.8 requires that a firm’s publicity must be accurate and not misleading.

· CCS 8.9 states that solicitors must not make unsolicited approaches to member of the public to advertise their services.

· The SRA Transparency Rules contain further regulations on the information solicitors should make available to clients and potential clients.

Question 125

Summary 1

Answer 125

· CCS 5.1 contains requirements regarding solicitor’s arrangements with third parties regarding introductions, fee sharing and referrals. These requirements are designed to ensure that solicitors preserve their integrity and act in the best interests of the clients when introducing clients to third parties and accepting instructions referred by third parties.

· Section 56(1) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (‘LASPO’) prohibits solicitors from referring or receiving referrals in respect of a claimant’s claim for damages in respect of personal injury or death to each other in consideration for a referral fee.

Question 126

Summary 2

Answer 126

Under the Bribery Act 2010 (‘BA 2010’) it is an offence for a UK citizen or resident to pay or receive a bribe directly or indirectly. Many law firms have anti-bribery policies designed to ensure that their staff do not commit offences under BA 2010, for example in relation to appointing enquiry agents or receiving corporate hospitality or gifts.

Question 127

Confidential Information

Dealing with Confidential Information

Answer 127

Lawyers deal with a large amount of confidential information about their clients and other people they deal with. There are a number of legal obligations you have to comply with to protect the confidential nature of the information you deal with. In this element we consider two areas:

• Data Protection Act 2018
• Duty of Confidentiality under the SRA’s Code of Conduct for Solicitors, RELs and RFLs (‘CCS’)

Question 128

Data Protection Act 2018

Answer 128

The Data Protection Act 2018 controls how ‘personal data’ about individuals is used by organisations.

Personal data’ means information about a particular living individual. This might be anyone, including a customer, client, employee, partner, member, supporter, business contact, public official or member of the public.

It doesn’t need to be ‘private’ information. Information which is public knowledge or is about someone’s professional life can be personal data.

‘Personal data’ does not include truly anonymous information. However, if you could still identify someone from the details, or by combining it with other information, it will count as personal data.

Question 129

Data Protection Principles

Answer 129

The Data Protection Act contains rules called the ‘data protection principles’. The Act requires that everyone responsible for using personal data must ensure that it is:

· used fairly, lawfully and transparently

· used for specified explicit purposes

· used in a way that is adequate, relevant and limited to only what is necessary

· accurate and, where necessary, kept up to date

· kept for no longer than is necessary

· handled in a way that ensures appropriate security, including protection against unlawful or unauthorised processing, access, loss, destruction or damage

Question 130

Duty of Confidentiality

Answer 130

As a solicitor or legal professional, you owe a duty of confidentiality to your clients.

CCS 6.3: You keep the affairs of current and former clients confidential unless disclosure is required or permitted by law or the client consents

This duty applies to current and former clients. Former clients include clients of a firm you used to work for and clients that used to instruct you but now instruct a different firm. It also continues to apply after a client’s death.

Question 131

Duty of Confidentiality: Exceptions

Answer 131

There are some exceptions to the duty of confidentiality:

CCS 6.3: You keep the affairs of current and former clients confidential unless disclosure is required or permitted by law or the client consents

The duty does not apply where disclosure is required or permitted by law. A number of statutes empower the government and other bodies to require disclosure of documents, eg HMRC or the National Crime Agency, when investigating money laundering. You might also need to disclose information to comply with a court order.

Question 132

Duty of Disclosure

Answer 132

The duty of disclosure is set out in CCS 6.4

This is the principle that you make your client aware of any information material to their case of which you have knowledge.

There are exceptions to this duty, including if you believe that disclosing the information could cause serious physical or mental harm to your client or another person, or disclosure is prohibited by legal restrictions, or by the duty of disclosure to another client.

Question 133

Summary

Answer 133

As a legal professional you will deal with a large amount of confidential information.You will need to comply with a number of legal obligations to protect the confidential information. You will need to process personal data about individuals in accordance with the provisions in the Data Protection Act 2018. You have a duty under CCS 6.3 to keep the affairs of clients and former clients confidential.There are a limited number of exceptions to the duty of confidentiality. You also have a duty under CCS 6.4 to make your client aware of all information material to the matter of which you have knowledge.There are exceptions to this duty.

Question 134

Duty of confidentiality

Answer 134

One of the central tenets of the solicitor’s retainer is that all information about the affairs of its clients must be kept confidential. The duty applies to legal professionals under paragraph 6.3 of both the SRA Code of Conduct for Solicitors, RELs and RFLs (‘CCS’) and the SRA Code of Conduct for Firms (‘CCF’) (together the ‘Codes’).

CCS 6.3: You keep the affairs of current and former clients confidential unless disclosure is required or permitted by law or the client consents

This duty applies to current and former clients. Former clients include clients of a firm you used to work for and clients that used to instruct you but now instruct a different firm. It also continues to apply after a client’s death.

Question 135

Duty of confidentiality: exceptions

Answer 135

There are a number of exceptional circumstances in which the duty of confidentiality can be breached. They include:

certain statutes empower government and other bodies, such as HMRC, to require disclosure of documents and information;

the duty of confidentiality is sometimes overridden by statutory or regulatory reporting requirements, eg those provided in the Money Laundering Regulations 2017, Proceeds of Crime Act 2002 and anti-terrorism legislation;

cases where you need to reveal the information to support a defence in either a civil claim brought against you by a client (eg in relation to a claim for negligence against the firm by your client) or in a criminal prosecution;

Question 136

Duty of confidentiality: exceptions

Answer 136

Cases involving children, where you discover that a child has been sexually or physically abused, even if the client who imparts the information refuses to permit disclosure, if you believe that the child’s health (mental or physical) is in danger, you may have grounds to breach your duty of confidentiality by revealing the details to an appropriate authority.

Compliance with the above obligations can often be a difficult judgement call and it is recommended that you consult closely with your firm’s Compliance Officer for Legal Practice before proceeding. The SRA has issued some guidance in this area.

Question 137

Duty of disclosure

Answer 137

The duty of disclosure is set out in CCS and CCF 6.4

CCS and CCF 6.4 place a personal duty on an individual solicitor to disclose to a client all information which is material to the client’s matter of which the solicitor has personal knowledge.

In CCF 6.4, the duty is limited to information of which the individual solicitor is aware and does not extend to information of which others in the firm may be aware.

Question 138

Duty of Disclosure: Exceptions

Answer 138

There are certain situations in which the duty of disclosure does not have to be complied with, which are set out in the following sub paragraphs of CCS and CCF 6.4:

a) the disclosure of the information is prohibited by legal restrictions imposed in the interests of national security or the prevention of crime;

(b) the client gives informed consent, given or evidenced in writing, to the information not being disclosed to them;

(c) you have reason to believe that serious physical or mental injury will be caused to the client or another if the information is disclosed; or

(d) the information is contained in a privileged document that you have knowledge of only because it has been mistakenly disclosed.

Question 139

Duty of Disclosure: Material

Answer 139

CCS 6.4: Where you are acting for a client on a matter, you make the client aware of all information material to the matter of which you have knowledge…

‘Material’ is not defined in the 2019 Standards and Regulations. However the 2007 SRA Code of Conduct said that it must be information which ‘might reasonably be expected to affect the client’s decision-making with regard to their matter in a way which is significant having regard to the matter as a whole’.

Question 140

Duty of Disclosure: Material

Answer 140

CCS 6.4 exists to protect clients. It will be difficult for clients to give informed instructions to their solicitor if they are not aware of all matters relevant to their case. However in the exceptions listed in 6.4(a) – (d) the solicitor will not be permitted to disclose material information to the client. In practice the circumstances set out in paragraph 6.4(a), (c) and (d) will be rare.

Question 141

Duty of Disclosure: Exceptions

Answer 141

• It will be more common for a solicitor to find themselves in the position where their duty of confidentiality to another current or former client (X) prevents them from disclosing material information that they obtained in relation to X’s case to a new client (Y). In these circumstances, the solicitor must not act for Y unless they obtain Y’s informed consent to the information not being disclosed to them.

Question 142

Duty of Disclosure: Exceptions

Answer 142

• Informed consent means that the client must have some understanding of the importance of the information to their case, and any prejudice there may be in non-disclosure. This will mean giving some indication of at least the broad nature of the information to be withheld and its relevance to the matter.

Question 143

Duty of Disclosure: Exceptions

Answer 143

• Even if the solicitor does obtain Y’s informed consent, they should only continue acting for Y if it is in Y’s best interests to do so. In practice, the solicitor is only likely to be able to continue acting for Y if the non-disclosure does not cause them any real prejudice.

Question 144

What if the duty of confidentiality and the duty of disclosure conflict?

Answer 144

There can be problems in situations when you owe a duty of confidentiality to one client and a duty of disclosure to another client in respect of the same information. In such cases, where there is a conflict between the duties of confidentiality and disclosure, the duty of confidentiality takes precedence.

Question 145

What if the duty of confidentiality and the duty of disclosure conflict?

Answer 145

You are a high street solicitor dealing with criminal and family matters.

Two years ago, when you were at your previous firm you defended for Mr Smith in a criminal assault case. Mr Smith lost, and was convicted, unbeknown to his wife, Mrs Smith.

You have moved law firms and Mrs Smith now wishes to instruct you in their divorce proceedings. Mrs Smith alleges she was subjected to domestic violence, which Mr Smith denies.

You discover that this Mr Smith is the same man you acted for in the criminal proceedings.

Question 146

What if the duty of confidentiality and the duty of disclosure conflict? Example

Let’s analyse the facts

Answer 146

The confidential information is all the information and documents you have regarding Mr Smith’s conviction for assault.

CCS 6.3 requires you to honour your duty of confidentiality to Mr Smith subject to certain exceptional circumstance which do not apply here.

Question 147

Let’s analyse the facts

Answer 147

If you were to act for Mrs Smith, CCS 6.4 would require you to make Mrs Smith aware of the information regarding Mr Smith’s conviction, as this is clearly material to her allegation of domestic violence.

If you disclosed the information regarding Mr Smith’s conviction to Mrs Smith, you would be in breach of CCS 6.3. (The duty applies to current and former clients).

Question 148

Example continued

Answer 148

Do any of the exceptions to CCS 6.4 apply? Unlikely. The closest is CCS 6.4(b): Mrs Smith gives informed consent, given or evidenced in writing, to the information not being disclosed to them…

… but it is unlikely that Mrs Smith would give consent.

In addition you would not be acting in Mrs Smith’s best interests if you continued acting for her, because not revealing the information would cause her prejudice.

In this example, you should only continue acting for Mrs S if it is in her best interests to do so, which is not the case here.

Therefore you cannot comply with your duties under CCS 6.3 and 6.4 and you must cease to act for Mrs Smith.

Question 149

CCS 6.5: Adverse Interests

Answer 149

CCS and CCF 6.5 provide:

You do not act for a client in a matter where that client [Client A] has an interest adverse to the interest of another current or former client [Client B] of you or your business or employer, for whom you or your business or employer holds confidential information which is material to that matter”, unless:

Question 150

CCS 6.5: Adverse Interests

Answer 150

(a) effective measures have been taken which result in there being no real risk of disclosure of the confidential information; or

(b) the current or former client, B, whose information you or your business or employer holds has given informed consent, given or evidenced in writing, to you acting, including to any measures taken to protect their information.

‘Adverse interest’ is not defined in the 2019 Standards and Regulations, but the 2007 SRA Code of Conduct suggests that this arises ‘where one party is, or is likely to become, the opposing party on a matter, whether in negotiations or some form of dispute resolution’.

Question 151

CCS 6.5: Adverse Interests

Answer 151

The SRA Guidance on Confidentiality of client information, gives an example of CCS 6.5 in action:

‘You work for X and Co. Client A has been served with a claim for breach of contract by a supplier and wishes to instruct you in the case. The search of X and Co’s database reveals that another employee of X and Co gave advice to the supplier, client B six months ago on possible issues with their supply contract.’

It is likely that A will have an interest which is adverse to the former client B for whom the firm holds confidential information. This will prevent you from acting for client A, unless either of the exceptions on 6.5(a) or (b) apply.

Question 152

CCS 6.5 (a)

Answer 152

CCS 6.5(a):effective measures have been taken which result in there being no real risk of disclosure of the confidential information.

The SRA guidance states that the test for such measures, sometimes known as information barriers, is quite high. The measures must protect one client’s information from the other client, and you as their solicitor. Examples of effective measures include a combination of:

Question 153

Effective measures include a combination of:

Answer 153

• Systems that identify the potential confidentiality issues.
• Separate departments handling the cases, at all levels, including non fee earning staff.
• Separate servers (and printers) so that information cannot be cross accessed.
• Information being encrypted and password protected.
• Individuals in the firm being aware of who else in the organisation is working on the respective matters so that they know who they can and cannot discuss the matter with.
• Appropriate organisational policies and training for staff.

Question 154

CCS 6.5 (b)

Answer 154

Or 6.5(b): the current or former client, [B], whose information you or your business or employer holds has given informed consent, given or evidenced in writing, to you acting, including to any measures taken to protect their information.

In order to give informed consent, B will need an understanding of any possible prejudice that could occur.

If the firm puts in placed measures to protect B’s information, it would be necessary for someone else in the firm to seek that consent, as you will be unable to do so without B’s confidential information being disclosed to you.

Question 155

CCS 6.5: an example

Answer 155

Would CCS 6.5 enable you to act for Mrs Smith on her divorce in the previous example?

You are a high street solicitor dealing with criminal and family matters.

Two years ago, when you were at your previous firm you defended for Mr Smith in a criminal assault case. Mr Smith lost, and was convicted, unbeknown to his wife, Mrs Smith.

You have moved law firms and Mrs Smith now wishes to instruct you in their divorce proceedings. Mrs Smith alleges she was subjected to domestic violence, which Mr Smith denies.

You discover that this Mr Smith is the same man you acted for in the criminal proceedings.

Question 156

CCS 6.5: example

Answer 156

You do not act for a client in a matter where that client [Mrs Smith] has an interest adverse to the interest of another current or former client [Mr Smith] of you or your business or employer, for whom you or your business or employer holds confidential information which is material to that matter”, unless:

(a) effective measures have been taken which result in there being no real risk of disclosure of the confidential information; or

(b) the current or former client,[Mr Smith], whose information you or your business or employer holds has given informed consent, given or evidenced in writing, to you acting, including to any measures taken to protect their information.

Question 157

Duty of disclosure: personal knowledge

Answer 157

Note that the duty of disclosure under CCS 6.4 relates to information ‘of which you have knowledge’ – ie the duty is personal.

• In the example of Mr and Mrs Smith, another lawyer at your new firm, who does not have the knowledge about Mr Smith’s conviction could act for Mrs Smith on her divorce, provided “effective measures were taken which result in there being no real risk of disclosure of confidential information” (CCS 6.5(a)).

Question 158

Duty of disclosure: personal knowledge

Answer 158

• Some firms would allow another lawyer to act for Mrs Smith.
• Some firms might take the view that in all the circumstances, it is not reasonable for the firm to continue acting for Mrs Smith. They might consider for example that they cannot guarantee compliance with CCS 6.5(a), and refer Mrs Smith to another firm.

Question 159

Summary

Answer 159

• CCS 6.3 requires you to keep the affairs of current and former clients confidential unless disclosure is required or permitted by law or the client consents.
• The duty under CCS 6.3 applies to current and former clients. Former clients include clients of a firm you used to work for and clients that used to instruct you but now instruct a different firm. The duty also continues to apply after a client’s death.
• Under CCS 6.4, where you are acting for a client on a matter, you make the client aware of all information material to the matter of which you have knowledge.

Question 160

Summary

Answer 160

• There are limited exceptions to the duty of disclosure under CCS 6.4, for example if your client gives informed consent to the information not being disclosed to them or if disclosure is prohibited by statute in the interests of the prevention of crime.
• Under CCS 6.5 you do not act for a client who has an interest adverse to the interests of another current or former client for whom you hold confidential information, unless:
• effective measures have been taken which result in there being no real risk of disclosure of the confidential information; or
• the current or former client whose information you hold has given informed consent to you acting.