Code of Conduct

Question 1

When are exclusion clauses valid?

Answer 1

Never - a solicitor cannot contractually exclude liability for negligence.

Question 2

When are limitation clauses valid (3 points)?

Answer 2

1. Not below compulsory minimum level of cover under the SRA Indemnity Insurance Rules
2. Solicitor expressly draws the above fact to his client in writing; AND
3. IF APPLICABLE, solicitor informs client that it is not entitled to the protection of the SRA Compensation Fund

Question 3

What 3 pieces of information must you give your client concerning complaints?

Answer 3

Must inform your client

1. That they have the right to complain and how complaints can be made (inform in writing)
2. That they have the right to complain to the Legal Ombudsman and how the Ombudsman can be contacted (inform in writing)
3. That they have the right to challenge or complain about your bill by applying to the court for assessment under Part III of the SA 1974, and the circumstances in which they may be liable to pay interest on an unpaid bill

Question 4

Three situations where you must stop acting for a client?

Answer 4

1. Where you become aware that the client has misled the court (unless the client agrees to disclose the truth)
2. Where there is a conflict of interest between you and a current client
3. Where a client proposes to make a significant gift for your benefit or any partner or employee of your firm, or a family member thereof (unless client takes independent advice)

Question 5

How should you deal with any financial benefit you receive as a result of your instructions?

Answer 5

1. Pay it to client
2. Offset against fees
3. Keep it ONLY if (i) you can justify keeping it (ii) you have told the client the amount of the benefit and (iii) the client has agreed that you can keep it

Question 6

When can you act for more than one client where there is a potential conflict between your duties to each client (4 requirements for R 3.7; 3 for R 3.6)

Answer 6

1. Rule 3.7 - If clients are competing for the same objective, you can only act for both if (i) explain the relevant issues and risks and have a reasonable belief that the clients understand (ii) all clients give their written informed consent (iii) separate individuals act for each client unless the clients specifically agree and (iv) it is reasonable to do so and the benefits to clients outweigh the risks.
2. Rule 3.6 - if clients have a substantially common interest, same as above EXCEPT not necessary that separate individuals act for each client

Question 7

When can you act for both the lender and the borrower on a mortgage (4 requirements)

Answer 7

1. Mortgage is a standard mortgage - provided in the normal course of business, which involves providing standard term mortgage
2. Relates to property to be used as borrower’s private residence
3. You are satisfied it is reasonable and in the client’s best interests for you to act and
4. The Certificate of Title required is in the form approved by the SRA and the Council of Mortgage Lenders

Question 8

What should you do when your duty of confidentialtiy to C1 conflicts with your duty of disclosure to C2?

Answer 8

Duty of confidentiality prevails, but you should not act for C2 since you will not be able to disclose material information to him (save in very limited circumstances, with proper safeguards)

Question 9

When can you be an appointed representative of a third-party service provider?

Answer 9

1. Regulated mortgage contracts
2. General insurance contracts
3. Pure protection contracts

Question 10

Special duty when acting for seller of land?

Answer 10

Must inform all buyers immediately of the seller’s intention to deal with more than one buyer.

Question 11

5 exceptions to the duty of disclosure?

Answer 11

1. Client gives specific, informed consent to non-disclosure
2. Evidence is that serious mental or physical injury will be caused to a person if information disclosured
3. Legal restrictions prohibit you from disclosing to the client
4. Privileged documents have been mistakenly disclosed to you
5. Information relates to state security or intelligence matters

Question 12

What is an undertaking and what is the solicitor’s duty concerning undertakings?

Answer 12

1. A statement, given orally or in writing, that the firm will do something or cause something to be done or refrain from doing something, on which the recipient reasonably relies, which is legally enforceable without need for consideration.
2. Duty is to perform within an agreed timescale or a reasonable amount of time.