Ethics

Question 1

SRA principles

Answer 1

You act:
1. in a way that upholds the constitutional principle of the rule of law, and the proper administration of justice.
2. in a way that upholds public trust and confidence in the solicitors’ profession and in legal services provided by authorised persons.
3. with independence.
4. with honesty.
5. with integrity.
6. in a way that encourages equality, diversity and inclusion.
7. in the best interests of each client.

Question 2

Complaints

Answer 2

A solicitor must ensure (Paragraph 8.3) that clients are informed in writing at the time of engagement about:
(a) their right to complain about the solicitor’s services and charges;
(b) how complaints may be made and to whom; and
(c) any right they have to make a complaint to the Legal Ombudsman

Complaints procedure must be on website.

If not resolved to clients satisfaction in 8 weeks must ensure client is told in writing of any right to complain to legal ombudsman etc.

Question 3

Negligence

Answer 3

Solicitor owes duty of care to clients under tort law.

Consequently, in addition to or instead of the actions that the SRA or Legal Ombudsman may take, a solicitor may be sued by their client in the tort of negligence.

Question 4

Advertising

Answer 4

• Solicitors can cold call.
  Paragraph 8.9 prohibits a solicitor from making unsolicited approaches to individual members of the public which, even if permitted by law, may feel unwelcome or intrusive. However, there is an exception in respect of current or former clients as they are not members of the public.
• Wesbite, letterheads, email
  Solicitor cannot be part of a business which has solicitors in the name or describes its work in a way that suggests if it is a solicitors firm unless body is authorised by the SRA (paragraph 5.4)
  Must delay SRA number and SRAs digital badge on website. Emails and letterheads must show SRA authorisation number.

Question 5

Arrangements with third parties

Answer 5

Any arrangement with a third party should not jeopardise that trust and that a solicitor must not abuse their position by taking unfair advantage of clients or others (Paragraph 1.2).

A solicitor may refer a client to a third party. In respect of such a referral the client must be informed of any financial or other interest which the solicitor, the solicitor’s business or employer has in referring the client to another person/ body (Paragraph 5.1(a)).

Any client referred to the solicitor by an introducer must not have been acquired in a way which would breach the SRA’s regulatory arrangements if the person acquiring the client were regulated by the SRA (Paragraph 5.1(e)) e.g. unsolicited approach

The client must be informed of any financial or other interest which the introducer has in introducing the client to the solicitor (Paragraph 5.1(a)).

A solicitor must not receive payments relating to a referral or make payment to an introducer in respect of clients who are the subject of criminal proceedings (para 5.1(d)).

Clients must be informed of any fee- sharing arrangement that is relevant to their matter, and the fee- sharing agreement must be in writing (Paragraph 5.1(b) and (c)).

Question 6

Referral fees

Answer 6

Prohibited in claims for damages following personal injury or death.

Prohibits payment for other claims for damages arising from the same circumstances. For example, if a personal injury claim resulting from a road traffic accident is referred to a solicitor, together with a claim in relation to uninsured loss recovery resulting from the same accident, the solicitor could not pay a referral fee in relation to either claim.

Question 7

Separate business

Answer 7

Solicitors should ensure that they do not represent any separate business as being regulated by the SRA (Paragraph 8.10(c)).

A solicitor can only refer, recommend or introduce a client to the separate business or divide, or allow to be divided, a client’s matter between their regulated business and the separate business where the client has given informed consent (Paragraph 5.3).

Question 8

Refusal of instructions to act

Answer 8

A solicitor must not unfairly discriminate by allowing their views to affect their professional relationships and the way in which the solicitor provides services (Paragraph 1.1).

If a solicitor has reason to suspect that the instructions received from a client, or someone authorised on their behalf, do not represent the client’s wishes, the solicitor must not act unless they have satisfied themselves that they do (Paragraph 3.1). e.g. duress/undue influence/vulnerable clients.

Question 9

Gifts from clients

Answer 9

A solicitor should carefully consider any gift worth more than £500 to determine whether it may be considered significant in the particular circumstances, and that it can be assumed that it would be significant if:
(a) it is worth more than 1% of the client’s current estimated net estate;
(b) it might become valuable at some point, especially after the death of the client;
(c) it provides a benefit to an individual which is more valuable than his relationship to the deceased reasonably justifies.

Drafting a will which includes a significant gift to the solicitor gives rise to the potential for an own interest conflict (Paragraph 6.1).
Don’t act unless the client agrees to take independent legal advice on making the gift.

Question 10

Instructions where you should refuse to act

Answer 10

a) there is, or is likely to be, a conflict of interest between the solicitor and the client, or between two or more clients ;
(b) the solicitor holds material confidential information for an existing or former client which would be relevant to a new instruction;
(c) the client instructs the solicitor to mislead or deceive the court.

A solicitor must also be able to justify their decisions and actions in order to demonstrate compliance with the solicitor’s obligations under the SRA’s regulatory arrangements (Paragraph 7.2).

Question 11

Duties to the client during the retainer

Answer 11

• Duty of reasonable skill and care
  Common law and s 13 Supply of Goods and Services Act 1982
• Duty to act in the clients best interests
• Duty to not take advantage of the client
• Confidentiality
• Disclosure

Question 12

Termination of the retainer - by client

Answer 12

Client is likely to be liable to pay the solicitor’s fees for work done up until the point of termination. A solicitor may require their costs to be paid prior to forwarding the file to the client.

Question 13

Termination of the retainer - by solicitor

Answer 13

Can’t terminate at will like client.
Must justify decision.

Good reasons for terminating the retainer may include:
(a) complying with the client’s instructions would involve the solicitor in a breach of the law or the requirements of professional conduct;
(b) the solicitor cannot obtain proper instructions from the client;
(c) there has been a breakdown in confidence within the relationship between the solicitor and client (eg the client is not willing to accept the advice of the solicitor).

Good practice to give reasonable notice of termination.

Automatic in certain circumstances.
e.g. where the solicitor is declared bankrupt or either party loses mental capacity after the retainer has commenced.

Question 14

Paragraph 8.6

Answer 14

A solicitor must give clients information in a way they can understand and ensure that clients are in a position to make informed decisions about the services they need, how their matter will be handled and the options available to them

Question 15

Paragraph 3.4 - level of service

Answer 15

In seeking to achieve a competent level of service, the solicitor must consider and take account of the client’s attributes, needs and circumstances

Question 16

Paragraph 8.7 - costs

Answer 16

A solicitor is obliged to provide clients with the best possible information about how their matter will be priced and, both at the time of engagement and when appropriate as their matter progresses, about the likely overall cost of a matter and any costs incurred.

Question 17

Options available for solicitors’ fees

Answer 17

• Hourly rate
• Fixed fee
• Variable fee - varies depending on outcome e.g. contingency fee
  1. Conditional fee agreement
  If win an enhanced fee expressed as a percentage increase. Cannot exceed 100% of solicitors normal charges. In personal injury cases additional cap of 25% of general damages recovered.
  2. Damages based agreements
  No win no fee. Amount of fee linked to level of compensation/damages received.
  Cap 50% of damages
  PI 25%
  Employment 35%

Question 18

Commission

Answer 18

Paragraph 4.1 obliges a solicitor to properly account to a client for any financial benefit the solicitor receives as a result of the client’s instructions, except where they have agreed otherwise. The term ‘financial benefit’ includes any commission, discount or rebate.

Should:
(a) pay it to the client; or
(b) offset it against fees; or
(c) keep it where the client has agreed to this.

Question 19

Paragraph 6.3 - confidentiality

Answer 19

Unless client consents (should only seek consent if in clients best interest) or required or permitted by law. E.g. court order, police warrant, HMRC.

Question 20

Circumstances which may justify disclosure

Answer 20

None of the examples allows for disclosure after the event.

(a) Where a client has indicated their intention to commit suicide or serious self- harm.

(b) Preventing harm to children or vulnerable adults.

(c) Preventing the commission of a criminal offence.

Question 21

Duty of disclosure

Answer 21

Solicitor must make the client aware of all information material to the matter of which the solicitor has knowledge (Paragraph 6.4)

Personal duty so means knowledge of the individual sols not the firm.

Exceptions to this duty:
(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) the solicitor has reason to believe that serious physical or mental injury will be caused to the client or another if the information is disclosed to the client; or
(d) the information is contained in a privileged document that the solicitor has knowledge of only because it has been mistakenly disclosed.

Question 22

Adverse interest

Answer 22

Paragraph 6.5 - solicitor must not act for a client in a matter where that client has an interest adverse to the interest of another current or former client for whom confidential information which is material to that matter is held.

Exceptions:
- effective measures; or
- the current or former client whose information is held has given informed consent, given or evidenced in writing, to the solicitor acting, including to any measures taken to protect their information.

Question 23

Professional embarrassment

Answer 23

Solicitor might be obliged to refuse to act on the grounds of professional embarrassment.

Solicitor should decline to act where the information which cannot be disclosed to the client would cause severe embarrassment if the fact that the solicitor had agreed to act in those circumstances ever came out.

Question 24

Privledge

Answer 24

Legal professional privilege allows a solicitor to withhold specific information which the solicitor would otherwise be required to disclose, for example in court proceedings. Privilege can only be waived by the client.

Continues beyond death of client.

Question 25

Conflicts of interest

Answer 25

Paragraphs 6.1 and 6.2 provide that there are two situations where a conflict of interests may arise:
(a) a conflict between the client’s interests and the solicitor’s interests (an ‘own interest conflict’); or
(b) a conflict between two or more clients (a ‘conflict of interest’).

Should never act in situation a.
Can in b if:
(a) the clients have a substantially common interest in relation to the matter or the aspect of it, as appropriate e.g. common purpose in how to achieve it
or
(b) the clients are competing for the same objective e.g. 2 companies bidding to take over third company
(c) may be to accept a limited retainer. Could be retained to act only in relation to those areas where no conflict exists, with each client seeking independent advice on the conflicting areas.

Conditions:
(a) all the clients have given informed consent, given or evidenced in writing, to the solicitor acting;
(b) where appropriate, effective safeguards are put in place to protect the clients’ confidential information; and
(c) the solicitor is satisfied it is reasonable to act for all the clients.

Question 26

Acting for buyer and seller

Answer 26

Although there is no ban on a solicitor acting for buyer and seller, the circumstances in which a solicitor will be able to conclude that there is no conflict of interests, or significant risk of one occurring, will be rare.
However, it might be possible to act, for example, where the property is being transferred between family members or where the parties are associated companies.

Question 27

Acting for joint buyers

Answer 27

Common.
Assess each case on its merits. Look for cases outside norm e.g. one buyer being forced or pressured.

Question 28

Acting for borrower and lender

Answer 28

In a commercial property context it is common for buyer and lender to be separately represented, but in a residential transaction the buyer’s solicitor will often be asked to act for the lender as well.

Residential normally standard terms and conditions so no conflict arises or there is a ‘substantially common interest’.

Question 29

Undertaking

Answer 29

A solicitor must act with integrity (Principle 4) = keeping word/promises.

Personally liable.
If held out by the firm as representing the firm, firm can also be in breach.

Even if outside of control so don’t give them for things you can’t control or use ‘reasonable endeavours’.

‘on behalf of client’ = still liable unless expressly disclaim personal liability.

Question 30

Duty to the court

Answer 30

A solicitor has a duty to act in a way that upholds the constitutional principle of the rule of law and the proper administration of justice (Principle 1)

Para 1.4 duty not to mislead court.

A solicitor must not misuse or tamper with evidence. Influence witnesses etc.

If conflict with clients best interests refuse to act for personal reasons.