Ethics 3: business requirements Flashcards
What are the requirements solicitors or firms must follow in respect to referrals and introductions?
Counts for referrals or introductions both ways
Clients must be informed of interest
- finical or other interest
Fee Sharing Agreements must be in writing
- and clients must be informed
No Payments in Respect to Criminal Proceedings
When are referral fees prohibited?
Payment of receipt of referral fees for:
- criminal proceedings;
- personal injury claims;
- death claims: and
- ancillary claims arising out of same circumstances (eg. uninsured loss recovery claim resulting from the accident)
Who bears the burden of proof that solicitor or firm has/has not made/received prohibited referral fee?
If if appears to SRA that you have done soothes will treat the payment as such
Unless you demonstrate otherwise
(so good idea to keep records and shit of this)
What is a separate business according to the SRA?
Business:
- which you own, or are owned by, or actively participate in or control or are otherwise connected with; and
- is not an authorised body, an authorised non-SRA firm or overseas practice
What actions involving a ‘separate business’ requires clients consent?
- referring, recommending or introducing the client to a separate business, or
- dividing a clients matter between you and a separate business or allowing the clients matter to be so divided
What is the requirement that solicitors must only associated with authorised bodies?
- must not be a manager, employee, member or interest holder
- of business that has name which includes ‘solicitors’ or describes its work in ways that suggests it is a law firm
- unless it is an authorised body by SRA
What are filing requirements for solicitors and firms?
Must deliver to SRA an annual return in prescribed form
Who is accountable for compliance with SRA?
Firms are accountable for work carried out by employees and other persons with whom the firm contracts.
Managers are responsible jointly and severally
What are a firms monitoring requirements?
Must monitor financial stability and business viability.
- must also monitor and manage all material risks to the business including those which may arise fro the firms connected practices
Ceasing Operations
- if firm becomes aware that it will cease to operate must effect an orderly wind-down
What are different types conflicts of interest?
Own interest conflict
- conflict between solicitor/firm and client
Conflict of Interest
- conflict between two or more current clients
On what matters can a conflict arise?
On the:
- same matter
- related matter (relates to same asset or liability)
If there is a conflict can another solicitor in a firm act?
Generally no conflict covers the firm
At what stage of engaging a client should you consider a conflict?
Should consider conflict/significant risk of conflict at beginning of the matter (before retainer)
Can continue to consider as a going concern
Can clients consent to a conflict?
No
What should you do if a conflict arises (before and after retainer)?
Before Retainer
- decline to act
- can act for client whose interest they can best represent and not for other client who may conflict
After Retainer
- should inform all clients
- may decided to decline to continue acting for all clients
- can continue to act for one client but must be wary of if their duty of confidentiality is at risk
How might a solicitor be able to continue to act for both parties if a conflict arises?
Limited Retainer
- only acts on aspects where there is no conflict and advise client to take independent advice on conflicted areas
- scope of work must be closely defined in client care letter
What must a solicitor/firm do in relation to an own interest conflict?
If there is a conflict or a significant risk of one
Must decline to act
What might give rise to an own interest conflict?
Any financial interest in clients business
Solicitor is beneficiary in the clients will
- extends to solicitors family or member of firm
Personal Relationship
- client is in claim against someone solicitor has personal relationship with
Commercial Relationship
-in business adverse to clients business
Employment claims of former employees
- if prospective client was former employees of solicitors firm and is bringing action against firm
Solicitors own conduct in question
- if client asks advice for rectifying mistake made by that solicitor in matter and one of the options is bringing professional negligence claim
What must a solicitor/firm do in relation to a conflict of interest?
Must not act if there is conflict or significant risk of conflict
Unless exception applies
- substantially common interest
- competing for same objective exception
When might the substantially common interest apply and what are the requirements/
Where clients have:
- clear common purpose in relation to a matter or particular aspect of a matter
- and there is a strong consensus on how it should be achieved
Conditions
- clients have giving informed consent, given or evidenced in writing
- where appropriate effective safeguards are put in place to protect confidential information
- you are satisfied that it is reasonable to act for all clients
When might competing for same objective exception apply to conflict of interest?
- two or more clients
- are completing for an objective which if attained by one will make it unattainable for other
May apply to asset, contract or business opportunity
Conditions
- clients have giving informed consent, given or evidenced in writing
- where appropriate effective safeguards are put in place to protect confidential information
- you are satisfied that it is reasonable to act for all clients
What should a solicitor consider to be satisfied that it is reasonable to act in a conflict of interests?
- whether the clients will benefit (ie. cheaper or more convenient)
- whether there will be extensive negotiations between clients
- whether there is an imbalance in knowledge or bargaining power between clients
What is the duty of confidentiality? who owes it?
you and everyone at the firm must keep the affairs of clients confidential unless
- disclosure is required or permitted by law
- the client consent
When is disclosure permitted in relation to duty of confidentiality?
- client consist
- disclosing will to an attorney appointed under lasting power of attorney (unless power forbids this)
- solicitor is being used by client to perpetrate a crime or fraud
- statutory requirements (eg tax affairs)
- statutory duty (money laundering)
- court order or police warrant
When might a breach of duty of confidentiality be justified?
- disclosure to prevent the commission of a crime that will result in serious bodily harm
- disclosure where the client has indicated they intend to commit suicide or serious self-harm
- to protect a child or vulnerable adult
HOWEVER
- not justified after the event
How long does duty of confidentiality last?
Continues despite end of retainer or death of client.
So should not disclose contents of will without consent of PR
Does duty of confidentiality prevent firms outsourcing services?
No the requirements of effective systems and controls extends to them.
Must only outsource services when you are satisfied that provider has taken all appropriate steps to ensure your clients confidential information will be protected.
What are the consequences of breaching duty of confidentiality?
Disciplinary action by SRA or SDT
Client may sue for breach of duty
What is the duty of disclosure to clients?
Must ensure that client is aware of all information material to retainer of which the individual lawyer/firm is aware.
What are the exceptions to duty to disclose to client?
- client gives informed consent, in writing or evidenced in writing
- you have reason to believe the dislosure would cause serious physical or mental injury to a person
- legal restrictions imposed of national security of the prevention of a firm (AML, anti-terror)
- you only have knowledge of information because it is contained in privileged documents which have been mistakenly disclosed to you
When might duty of confidentiality and duty of disclosure conflict?
Must not act for A in matter where A has adverse interest to current or former client for whom your firm has confidential information which is material to A in that matter
Exceptions
- effective measures have been taken such as safeguards; OR
- B gives informed consent given or evidenced in writing including to any measures taken to protect their information
