Ethics and Professional Conduct - ALL Flashcards
What are the SRA’s seven mandatory principles?
A solicitor must 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.
Where does the principle requiring solicitors to behave in a way that upholds the constitutional principle ofthe rule of law, and the proper administration of justice come into play?
Primarily in the solicitor’s relationship with the courts i.e. in Dispute Resolution and Proceedings Before Courts, Tribunals, and Inquiries.
What type of behaviour would breach the principle that a solicitor must behave in a way that upholds public trust and confidence in the solicitors’ profession?
If a solicitor is convicted of a criminal offence (that is not minor). The solicitor could be potentially struck off. Serious offences for the purposes of this principle include: * dishonesty (e.g. theft of client money/fraudulent schemes/submitting false expense claims/dishonest election related crimes)* serious sexual offences * **GBHSanctions** depend on the facts and the degree of seriousness in each case. SRA assesses how far public trust has been undermined.
What does the principle of independance require?
Lawyers must be able to give impartial advice. Example: referring all clients to the same estate agent in return for a referral fee would be a breach/where a firm is put under the control of an unregulated third party its independance may be at risk.
What is the difference between the principles of honesty and integrity?
Honesty: don’t tell liesIntegrity: do the right, moral, ethical thing in all circumstances. The two principles can overlap. It is possible to act without integrity while still being honest. Note, an act of a solicitor in their personal life could mean that they have failed to act with honesty or integrity. Examples of breaches:* ignoring rules and being reckless to consequences* taking on new partners without vetting and subsequently discovering they had committed fraud in conveyancing transactions * taking advantage of someone without legal knowledge* backdating documents* misleading the courts.
Is the requirement for a solicitor to act in a way that encourages equality, diversity, and inclusion limited to compliance with the Equality Act?
No, the duty is broader.
What does the principle to act in the best interests of each client require?
- Avoid conflicts of interests* Keep client information confidential * Disclose important information to the client* Deliver competent and timely service
Which principle prevails when two or more principles conflict?
The principle which safeguards the wider public interest outweighs the individual client’s interests. Where relevant, the solicitor should inform their client of the circumstances in which their duty to the court and other professional obligations take precedence over their duty to the client.
What are the 3 rules regarding discrimination in the context of the provision of legal services?
- You must not unfairly discriminate by allowing your personal views to affect your professional relationships and the way in which you provide your services2. Firms are required to monitor, report, and publish workforce diversity data, as prescribed by the SRA.3. You have a legal obligation to provide reasonable adjustments to ensure that disabled clients and employees are not placed at a substantial disadvantage compared to those who are not disabled, and you must not pass on the costs of these adjustments to others.
Is discrimination permitted if requested by a client?
No.Example: if a client asked you to not instruct a certain chambers because they are all women, this would not be permitted.
Is the duty to provide reasonable adjustments to disabled clients and employees absolute?
No.Adjustments only have to be ‘reasonable’, so the firm does not have to accommodate the needs of disabled clients and employees in all cases e.g. if it is cost prohibitive Examples of reasonable adjustments:* Ensuring that clients can access the firm’s premises easily* Providing sign language services* Providing specialist equipment for employees.
How might a solicitor abuse their position?
By taking unfair advantage of clients or others. Examples of abuse of the solicitor’s fiduciary position:* offering to sell a client an expensive car when you know they have come into money * throwing weight around to gain an advantage or get out of something * “I’m a solicitor”* taking advantage of an unrepresented client * oppressive/domineering tactics
How can a solicitor mislead others?
- affirmative acts* omissions (e.g. failing to inform someone that their understanding/view is incorrect)* being complicit in the acts or omissions of others (including your client)
What is the scope of the duty not to mislead?
You must not mislead or attempt to mislead your client, the court, or others. * Examples: Attempting to cover tracks by forging/backdating documents, saying you haven’t heard back when you haven’t started working on something.A solicitor must take particular care not to mislead an unrepresented counterparty e.g. telling them terms are standard and you would accept them if you were them if they are not actually in that party’s best interests.
What is an undertaking?
An undertaking is:* A statement (given orally or in writing), whether or not it includes the word ‘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.
When must an undertaking be performed?
- Within the agreed timescale. * If there is no agreed timescale, within a reasonable amount of time.
Who can give an undertaking?
Anyone in the firm, including support staff.
Who is bound by an undertaking?
The individual giving the undertaking and their firm.
Does a solicitor or firm have to give an undertaking?
No but if they do, they must perform it.
If an undertaking relates to the payment of fees, is it valid if the person giving the undertaking does not have the funds?
No, this is not a prerequisite for the undertaking and does not affect the validity of the undertaking, which will still be binding even if the solicitor is not in funds.To protect the solicitor giving the undertaking, they should ensure fees are cleared in the client account at the time of giving the undertaking.
What are the 6 elements of best practice in giving an undertaking?
- Given by a solicitor (should be a clear policy about who can give undertakings given to the other side to ensure reasonable reliance cannot be placed on undertakings accidentally given)2. In writing (reduces chance of mishearing and is proof of what was actually said)3. Clearly intended to be an undertaking (i.e. ‘I undertake…);4. Given only with the client’s express authority5. Recorded on the file and on a register of undertakings in the firm (if anyone else deals with it in the future, they know the firm is bound)6. Clear in its terms (an ambiguous undertaking will be construed against the party that gave it
What 9 steps should a firm or regulated person take when giving an undertaking?
- Have a clear policy on who can give undertakings 2. Prescribe the manner in which undertakings may be given3. Where possible, prepare standard undertakings, with clear instructions that any departure be authorised in accordance with supervision and management responsibilities4. Operate a system whereby terms are checked by another fee earner5. Ensure all staff understand that they need the client’s agreement before giving an undertaking6. Ensure all staff understand the undertakings they give when exchanging contracts on the sale or purchase of land and the undertakings required to complete such transactions 7. Have a clear policy on how compliance will be monitored and maintain a central record to ensure and monitor compliance (i.e. when given and when discharged)8. Copy each undertaking and attach it to the relevant file; label the file itself9. Confirm oral undertakings (given or received) in writing
What are the 3 elements of bad practice in giving an undertaking?
- Given by any member of staff in a legal firm2. Given orally (typically on the telephone)3. Given inadvertently (i.e. without using the word ‘undertaking’).
What are 4 types of dangerous undertakings?
- To give money that has not yet been received (and may never be received, making the firm liable)2. To forward a document not yet in your possession3. To clear a client’s debt to someone (open ended and potentially extrememly costly)4. To do something the client has not yet agreed to.
What should you do if an undertaking is dependant on a future event and it becomes apparent the event will not occur?
Notify the recipient of this.
How can you avoid accidentally making an undertaking?
Use the words “I will use my best endeavours…” rather than “I will…” or “I promise…”.
What are the 4 potential consequences of breaching an undertaking?
- Solicitor is personally bound to comply with an undertaking 2. Undertaking can be **enforced by the court. **3. Recipient of undertaking may seek compensation for any loss incurred.4. Solicitor may be disciplined for breach of professional conduct obligations and sanctioned by the SRA and SDT. Possible santions from LeO also for poor service.
Can the SRA, LeO and SDT enforce undertakings?
No but they may sanction the solicitor if they fail to fulfil an undertaking.
If a member of support staff tells someone they will do something over the phone and the other person relies on this, is this an undertaking?
Yes and the firm will be liable for any breach of this undertaking.
What are SMART undertakings?
- Specific (who will do what and by when?)* Measurable* Agreed* Realistic* Timed
“Specific” undertakings
Bad: * “I will send you the deed of easement”* “We undertake to pay your legal fees of £1,000 plus VAT in relation to [insert client and matter].The legal fees promised will be payable in any event.Good:* “I undertake to send you by first class post the deed of easement dated 1 January 2023 made between Party A and Party B. I will send the deed today.* We undertake to pay your legal fees of £1,000 plus VAT in relation to [insert client and matter] within 3 working days of completion of the matter.The legal fees will only be payable if the matter actually completes.
“Measurable” undertakings
Bad* “We will redeem the mortgage in favour of Barclays Bank plc out of the proceeds of sale”. (This could be very dangerous if there is more than one mortgage in favour of Barclays Bank plc, as this undertaking could be construed as agreeing to pay them all off).* “We undertake to pay your legal fees in relation to insert matter and clients]”. (This is an open-ended undertaking and the firm giving the promise will be liable to pay the other side, whatever the level of fees incurred). Good* “In consideration of your today completing the purchase of [insert property address] we hereby undertake forthwith to pay over to the [insert details of lender] the money required to redeem the mortgage/legal charge dated [insert date] and to forward the receipted mortgage/legal charge for evidence of discharge to you as soon as it is received by us from the [insert lender]. * “We undertake to pay your legal fees limited to a maximum of £1,000 plus VAT (and £20 for disbursements) in relation to insert matter and clients]”.
“Agreed” undertakings
Bad: Stating during a telephone call that your firm will do something and failing to follow that up in writing. Good: The wording of the undertaking is agreed in advance between the solicitors in writing.
“Realistic” undertakings
Bad: * “I will send you the contract signed by my client”. (Issues fulfilling this if at the time of making the statement, the solicitor does not yet have the signed contract). * If you can’t comply with the undertaking, it can still be enforceable. Good: * “I undertake to send you by first class post the contract signed by my client within 7 days of receipt of the signed contract from my client”. * If the solicitor never receives the signed contract, they cannot be in breach. * The solicitor will be under a duty to inform the recipient of the undertaking as soon as possible that he cannot comply with the undertaking.
What are the 2 rules regarding evidence and witnesses?
- You must not misuse or tamper with evidence, or attempt to do so. You also must not seek to influence the substance of evidence (e.g. generate false evidence by inventing facts or creating documents/persuade witnesses to change their evidence).* You must not provide or offer to provide any benefit to a witness if the benefit is dependent upon the nature of the evidence or the outcome of the case.
Can a witness be paid in any circumstances?
Permitted payments are:* legitimate travel expenses* earnings they would lose by not attending work.
What are the 3 elements of respecting the court?
- You must not waste the court’s time (all assertions representations, or statements you make to the court or others must be properly arguable i.e. not baseless claims).2. You must comply with all court orders and not place yourself in contempt of court (and advise your client to do the same and of the consequences of non-compliance)3. You must draw the court’s attention to relevant cases and statutory provisions, and any procedural irregularities of which you are aware, and which are likely to have a material effect on the outcome of the proceedings even if it harms your client’s position.
What can you do if you are required to draw the court’s attention to relevant law?
Seek to distinguish the case but you must never ignore it.
If a client accused of a criminal offence admits guilt to you, what must you do?
- You must not assert that the client is not guilty and must not allow the client to give evidence that they are not guilty.* You may seek to show that the prosecution have not produced sufficient evidence to convict.* If the client wants to plead not guilty, you can try to persuade them not to but if they insist or try to give false evidence, you must withdraw and tell the court you can no longer act for professional reasons - you do not breach the client’s confidence by telling the court they are lying.
If a client has or attempts to give false evidence, what must you do?
- You must persuade the client to correct any false evidence already given or not to give the false evidence. * If the client refuses, you must withdraw and tell the court you can no longer act for professional reasons - you do not breach the client’s confidence by telling the court they are lying.
What are the 4 key elements of service and competence?
- Authority to act for the client2. Competence and timely service3. Customising service to each client 4. Management Responsibilities (Supervision and Training & Guidance)
In what 3 circumstances can you act for a client?
- On instructions from the client* On instructions from someone properly authorised to provide instructions on the client’s behalf e.g. under a POA* Where the client’s instructions cannot be ascertained, you have legal authority to act despite this fact and your overriding obligation is to protect your client’s best interests.
What must a solicitor do if someone else is authorised to give instructions on behalf of their client by a Power of Attorney?
Check the terms of the original document appointing the attorney. Someone with Power of Attorney is able to sign legal documents on behalf of the client (client may not have mental authority).
Can a client give someone else authority to instruct a solicitor on their behalf in a letter?
Yes but the solicitor must exercise extreme caution if this is the case. The client must have mental capacity to give this authority and will still be required to sign any legal documents.
What must a solicitor do if they suspect that an authorised person’s instructions do not represent their client’s wishes?
The solicitor must not act unless they are satisfied the instructions represent the client’s wishes and have a duty to investigate to confirm the client’s wishes before acting.Example: a child of an elderly parent giving instructions and the solicitor suspects the child is acting for their own benefit.
Can a solicitor take instructions from one person on the sale of a property that is jointly owned by two people?
Yes, a solicitor can agree with all clients to take instructions from one main party as the matter progresses provided they are sure at the outset of the matter and before the retainer is created that the co-owner wants to sell the house and wants to instruct the firm.
What 3 steps should a solicitor take when taking instructions to draft a will?
- Interview the client alone, without the child if possible2. Any instructions must take account of the client’s vulnerability (mental or otherwise)3. Advise the client appropriately given the circumstances e.g. if there is another child the client is fond of ensure the client understands could leave property to that chid too.
What are the 4 requirements of competent service?
- You must maintain your competence to carry out your role and keep your professional knowledge and skills up to date.* Competence is a higher threshold than “not negligent”* If you have no experience in the area, you shouldn’t take the matter on (note, you can if you put the time in but you cannot charge the client for the time to make yourself competent)* Junior solicitors must be supervised appropriately to ensure the service is competent.
What does timely service require?
The solicitor must have the time to do the job, if they are very busy and will not have time to take on a new job for a client, the solicitor must decline to take on the new retainer.
What are the potential consequences of failing to provide competent and timely service?
Failure can give rise to:* disciplinary action (breach of duty to act in client’s best interests) * negligence claim
What must be considered in customising service to each client?
The solicitor must consider and take account of each client’s attributes, needs, and circumstances.Look out for:* depth of knowledge* any special circumstancesExample:* If a solicitor knows their client is illiterate, updates should be provided by telephone in addition to email or post.* A first time buyer may need more information on the legal process as compared to a sophisticated commercial client.
What is the role of a manager/supervisor in the context of competence of service?
In acting as a supervisor or manager to others providing legal services, you must:* remain accountable for the work carried out through them and effectively supervise work being done for clients.* ensure that the individuals you manage are competent to carry out their role and that they keep their professional knowledge and skills, as well as their understanding of their legal, ethical, and regulatory obligations, up to date.
What is the role of a firm in the context of competence of service?
Firm must: * have an effective system in place for supervising clients’ matters.* ensure that the managers and employees of the firm are competent to carry out their role and that they keep their professional knowledge and skills, as well as their understanding of their legal, ethical, and regulatory obligations, up to date.
What are the 3 professional conduct rules regarding client money and assets?
- Firms/Solicitors must account to the client for any financial benefit they receive as a result of the client’s instructions unless the client has already agreed otherwise2. Firms/Solicitors must safeguard money and asseets entrusted to them by clients and by others e.g. title deeds to a house or other legal documents3. Solicitors must not personally hold client money (i.e. in the business account) unless it relates to the advance playment of fees and expenses and the client is informed in advance of where and how the money will be held.
What is the difference between a referral and an introduction?
Referral is when a solicitor refers a client to a third partyIntroduction is when a third party refers a client to a solicitor.Note, money is likely to change hands in both situations and the duties to act with independance and in the client’s best interest must be protected.
Who has the responsibility of informing the client of any financial or other interest (e.g. a family relationship with a third party) the solicitor has in the client’s instructions?
The solicitor.
What are the 3 rules that apply when:* a solicitor refers a client to a third party, * a third party refers a client to a solicitor, or * there is a fee sharing agreement in place?
- The client must be informed of the interest (financial or otherwise) which the solicitor or their business or employer has in referring the client to a third party, or which an introducer has in referring the client to the solicitor2. All fee sharing agreements with a third party must be in writing. Additionally, the client must be informed of any fee sharing arrangement that is relevant to their matter.3. Payments for referrals or introductions in relation to clients who are the subject of criminal proceedings are prohibited
If a client contacts you with respect to a criminal matter, you refer it to another solicitor and they send you a gift as a thank you, can you accept it?
No, this would be treated as a prohibited payment with respect to criminal proceedings.
What is a prohibited referral fee?
- The Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) prohibits the payment or receipt of referral fees in claims for damages following personal injury or death e.g. paying a claims management company for the referral of a personal injury client. * This prohibition also applies to ancillary claims arising from the same circumstances (e.g. uninsured loss recovery claim resulting from the accident).* The SRA will presume a payment is a prohibited referral fee unless the solicitor demonstrates otherwise so solicitors should retain records and management information.* This standard applies to firms as well as to individual solicitors.
Is making or accepting a prohibited referral fee a criminal offence?
No, it is a regulatory breach, not criminal.
What is a “separate business” of a solicitor?
A ‘separate business’ is a business:* which you own, or are owned by, or actively participate in or control, or are otherwise connected with; and * which is not an authorised body, an authorised non-SRA firm, or an overseas practice.
What are the 2 actions in relation to “separate businesses” of a solcitor that require informed client consent?
- Referring, recommending, or introducing the client to a separate business (you cannot pass on a client’s contact information without their consent)* Dividing a client’s matter between you and a separate business, or allowing the client’s matter to be so divided.”Informed” client consent means the solicitor has told the client of their relationship with the business.This applies to firms and solicitors.
What is best practice for a solicitor when a client needs advice that the solicitor cannot give?
The solicitor should give details of more than one of these advisers (e.g. mortgage advisors/surveyors etc.) to the client and suggest that the client make direct contact with them.This solicitor must not pass on the client’s details without the client’s informed consent to any advisor.
What 3 business requirements are specific to solicitors?
- You must not be a manager, employee, member, or interest holder of a business that has a name which includes the word ‘solicitors’, or describes its work in a way that suggests it is a solicitor’s firm, unless it is an authorised body (i.e. a body that has been recognised by the SRA).2. You must complete and deliver to the SRA an **annual return in the prescribed form if you hold a practicing certificate.3. If you are carrying on any reserved legal activities in a non-commercial body (i.e. a not-for-profit body, a community interest company, or a trade union), you must ensure that the body takes out and maintains indemnity insurance with adequate and appropriate cover** in respect of all services you provide, regardless of whether they are reserved legal activities or not
What are reserved legal activities under the Legal Services Act 2007?
- The exercise of a right of audience (i.e. right to appear before and address a court, including the right to call and examine witnesses)* Conducting litigation (i.e. issuing, commencing, prosecuting, or defending proceedings before any court in England or Wales, or performing in ancillary functions in relation to these proceedings)* Preparing instruments relating to real or personal estate e.g. any instrument of transfer or charge for the purposes of the Land Registration Act 2002.* Preparing probate papers* Notarial activities (i.e., activities that were customarily carried on by notaries)* The administration of oaths.
What 5 business requirements are specific to firms?
- To have effective business systems for governance in place2. To keep and maintain records to demonstrate compliance with the SRA’s regulatory arrangements3. To remain accountable for compliance with the SRA’s regulatory arrangements even where the firm’s work is carried out through others (i.e. the managers, employees and other persons with whom the firm contracts).4. To actively monitor its financial stability and business viability. It must also identify, monitor, and manage all material risks to its business, including those which may arise from the firm’s connected practices and if it becomes aware that it will cease to operate, it must effect an orderly wind-down of activities.5. To have managers and compliance officers
What are the 4 purposes of governance structures in a firm?
To ensure:* Compliance with the terms and conditions of the firm’s authorisation* That managers, employees, and interest holders comply with all applicable SRA regulatory arrangements* That managers and interest holders, and those who the firm employs or contracts with, do not cause or substantially contribute to a breach of the SRA’s regulatory arrangements by the firm, the managers, or its employees* That compliance officers are able to discharge their duties.
What is the role of a manager in relation to the SRA’s business requirements of firms?
The manager of an SRA-authorised firm is responsible for the firm’s compliance with the Code of Conduct.If there are multiple managers, their responsibility is joint and several.
What are the 5 responsibilities of a COLP in relation to the SRA’s business requirements of firms?
The Complaince Officer for Legal Practice is to take all reasonable steps to:* Ensure compliance with the terms and conditions of the firm’s authorisation* Ensure that the firm and its managers, employees, and interest holders comply with the applicable SRA regulatory arrangements* Ensure that the firm’s managers and interest holders, and those they employ or contract with, do not cause or substantially contribute to a breach of the SRA’s regulatory arrangements* Ensure that a prompt report is made of any serious breach of the terms and conditions of the firm’s authorisation, or the SRA regulatory arrangements* Ensure that the SRA is informed promptly of any facts or matters that the COLP reasonably believes should be brought to its attention so the SRA may investigate whether a serious breach of its regulatory arrangements has occurred or otherwise exercise its regulatory powers.These requirements do not apply to matters which are the responsibility of the firm’s COFA
What are the 3 responsibilities of a COFA in relation to the SRA’s business requirements of firms?
The Complaince Officer for Finance and Administration is to take all reasonable steps to:* * Ensure that the firm and its managers and employees comply with the SRA Accounts Rules obligations* Ensure that a prompt report is made to the SRA of any serious breach of the SRA Accounts Rules* Ensure that the SRA is informed promptly of any facts or matters that the COFA reasonably believes should be brought to its attention so the SRA may investigate whether a serious breach of its regulatory arrangements has occurred or otherwise exercise its regulatory powers.
To whom do the duties regarding conflicts of interest, confidentiality and disclosure apply to?
Firms and solicitors.
Which SRA Principle relates to the duty to avoid conflicts of interest?
Principle 7: The duty to act in the best interests of each client. You may not be able to do this if a conflict exists
What are the 2 types of conflicts?
- Own Interest Conflicts (i.e. between the solicitor or firm and the client)2. Conflict of interest (i.e. between two or more current clients, also called a “client conflict”)
In what 2 types of matters can a conflict or significant risk of conflict exist?
- Same matter (e.g. Four clients instruct a firm on drafting a partnership agreement between them but cannot agree on the split of profits)2. Different but related matter (Two different clients want to buy out the same, third company)A matter is related if it relates to the same asset or liability.
Can a general business interest create a conflict situation?
No, a general business interest is not sufficiently ‘related’ to create a conflict situation. Firms can act for two companies whose main business is the same, provided the matters are on unrelated issues e.g. employment contracts for one and litigation for the other. (Note, the firm must be careful to avoid a conflict arising in the future and must carry out comprehensive conflict checks at the beginning of each new matter)
If a conflict exists, can solicitors in the same firm act?
Generally no, the rules cover the firm, not just the individual solicitors.
When should you consider conflicts of interest or a significant risk of a conflict of interest?
- At the beginning of the matter, before the retainer has been created. * Constantly throughout the retainer (e.g. if initially, both clients were in full agreement as to how a contract should be drafted but then negotiations begin as they want different things)
What should you do if a conflict of interest or a significant risk of a conflict of interest arises before a retainer?
- Decline to act. * Or, only act for the client(s) whose interests they can best represent and should not also agree to act for the client(s) whose interests might conflict.
What should you do if a conflict of interest or a significant risk of a conflict of interest arises during a retainer?
- Inform all clients. * If appropriate, decline to continue to act for all clients. * The solicitor can continue to act for one of the parties but must be wary about whether their duty of confidentiality is at risk.
Can a limited retainer be used where there is a client conflict?
A firm may decide that it can act for one of the clients but only on the aspects where there is no conflict and advise the client to take independent advice on the conflicted area. The client care letter must carefully define the extent of the work that the firm is going to do on the limited retainer.
What does declining to act due to professional embarrassment mean?
- Even if there is no conflict or significant risk, a solicitor may decide to decline to act anyway due to professional embarrassment. This means that the firm considers that it cannot act in the best interests of the client possibly due to considerations that are relevant to the firm e.g. a firm does a lot of work for Company A and a competitor wants the firm to act for it but the firm declines to avoid the possibility of Company A going elsewhere.* This may also apply where there is no confidentiality issues but nevertheless the solicitor declines to act.
Can a client consent to a conflict of interest?
If a conflict exists, a client cannot consent (note, for client conflicts there are 2 limited exceptions)
What is an own interest conflict?
Exists between a solicitor and client when a duty to act in the best interests of the client in relation to any matter conflicts, or there is a significant risk that it may conflict with the solicitor’s own interests in that matter or a related matter.An own interest conflcit may compromise a solicitor’s ability to give impartial adviceExamples:* Any financial interest * Solicitor is a beneficiary in the client’s will* Personal relationship (e.g. family or a friend)* Commercial relationship in a business adverse to the potential client’s business* Client is a current or former employee of the firm* Solicitor’s own conduct in the matter (e.g. a mistake)
Can you act in an matter if an own interest conflict exists?
No, there are no exceptions.
Can a solicitor act if they have a financial interest in the matter?
No, this creates an own interest conflict.Example: * Solicitor loaning money to a client’s business* Solicitor with a financial interest in the company on the other side of a dispute or potential agreement (e.g. a shareholding) unless the shareholding is tiny like in a listed company.
Can a solicitor draft a will if they are the beneficiary of a significant gift under that will?
- If the solicitor (or their family or firm) are to be a beneficiary of a significant gift, this usually raises an own interest conflict so the solicitor must refuse to act.* However, the solicitor may act if the solicitor is satisfied that the client has taken independent legal advice with regard to making the gift. * Large gifts are always significant, but a smaller gift might be considered significant if it is a significant part of the client’s overall estate * Exception: If the solicitor’s ability to advise the client would not be undermined by the financial interest, an own interest conflict would not exist e.g. if the solicitor is drafting their parent’s will and each sibling is receiving an equal share, the parent does not need independant legal advice.
Does a personal relationship create an automatic own interest conflict?
A solicitor can act for family and friends as long as none of the facts indicate that the relationship will affect the solicitor’s ability to give independant advice.
How would a mistake by a solicitor create an own interest conflict?
If a client asks the solicitor for advice on rectifying their losses caused by a solicitor’s mistake, the solicitor should decline to act if one of the client’s options is to bring a claim against the solicitor for professional negligence.
Can a solicitor act in their own transaction with a client?
No as there will likely be an own interest conflict and the client will need separate representation e.g. if the solicitor buys or sells something to a client.
Is there an automatic conflict of interest if two or more clients are involved in a matter?
No, the requirements of the duty to act in the best interests of each of them must be different e.g. if 2 clients have agreed all term and there is no significant risk of a disagreement arising in the future, there is no conflict.
What is a client conflict?
Exist when a solicitor owes separate duties to act in the best interests of two or more clients in relation to the same or related matters and those duties conflict i.e. if your advice to each client would be different, there is a conflict.Examples:* acting for both sides of a dispute* acting for both buyer and seller in a sale* acting for both an investor and the scheme they are investing in* acting for two clients agreeing a commercial contract
Can you act if there is a conflict or a significant risk of a conflict between clients?
No, unless there is one of the following exceptions: * Substantially Common Interest* Competing for the Same Objective ExceptionAnd the conditions for the exceptions are met.
What is the Substantially Common Interest Exception?
Where there is a clear common purpose in relation to a matter or particular aspect of it between the clients and a strong consensus on how it is to be achieved.Example: clients who want to take out a lease as joint tenants or set a business up together
What is the Competing for the Same Objective Exception?
Where two or more clients are competing for an objective which if **attained by one **client will make that objective unattainable to the other.”Objective” means an asset, contract or business opportunity which the clients are seeking to acquire or recover through:* a liquidation (or other form of insolvency process) * by means of an auction or tender process or * through a bid or offer which is not public.
What are the 3 conditions that must be met for either of the 2 exceptions to client conflicts to apply?
All of the following must be met:1. Clients must give informed consent (i.e. knowledge of the facts) given or evidenced in writing. 2. Effective safeguards are put in place to protect clients confidentiality, where appropriate. 3. The solicitor is satisfied it is reasonable for them to act for both clients.
What are effective safeguards to protect a client’s confidential information if an exception to client conflicts exists?
Separate fee earners acting for the clients in separate buildings or on separate floors and the computer system must be set up to ensure that information about one client is not available to the solicitors acting for the other. These safeguards only tend to be used by larger firms for clients that are ‘sophisticated’ users of legal services (such as large corporate clients).
When will it not be appropriate to have safeguards to protect a client’s confidential information if an exception to client conflicts exists?
Safeguards will not be appropriate if the clients want the same solicitor to represent them. In this situation:* the solicitor must ensure that the clients agree as to which information can be shared with the other, and * must obtain informed consent from the clients that no safeguards are required.
What are the 3 things a solicitor should consider in deciding if it is reasonable for them to act if an exception to client conflicts exists?
- Whether the clients will benefit from the solicitor acting for both of them (e.g. it is less costly or more convenient).* Whether there will be extensive negotiations between the clients. (If clients have serious unresolved issues, it is probably not reasonable)* Whether there is an imbalance in knowledge or bargaining power between the clients (e.g. one has an inhouse legal team and the other is a relatively unsophisticated individual).
What is the purpose of the duty of confidentiality?
In order for the client to get the best possible advice.The client should be able to say anything to the solicitor and know that the information will not be shared outside the firm.
What are the 2 exceptions to the duty of confidentiality?
- Disclosure is required or permitted by law* The client consents| The client consents.
In which 6 situations is disclosure of confidential information generally accepted?
- Client consents to the disclosure of information2. Solicitor discloses the client’s will to an attorney under Lasting Power of Attorney (unless expressly forbidden by the POA)3. Solicitor is being used by the client to perpetuate a crime or fraud4. Statutory requirements to do so e.g. tax affairs to HM Revenue & Customs 5. Statutory Duty to do so e.g. Money Laundering provisions 6. The is a court order or police warrant requiring disclosure
When may a breach be justified?
Disclosure to prevent criminal offence that will result in serious bodily harmWhere the client has confirmed they will commit suicide or bodily harm To protect a child or vulnerable adult.
Who owes a duty of confidentiality to a client?
Everyone in the firm not just the solicitor, including non-qualified employees, consultants and locums.
When does the duty of confidentiality owed to the client end?
Indefinitely, it continues after retainer has ended (i.e. duty is owed to former clients) and even after client’s death (right to enforce or waive the duty passes to the client’s PRs).
Can a solicitor disclose the contents of a will to beneficiaries?
It can only be disclosed with the consent of the PRs, who may not be the beneficiaries.
What is the difference between the duty of confidentiality and the concept of Legal Professional Privilege?
- Confidentiality is a conduct duty (broader, applies to all confidential information about the client’s affairs, not just confidential communications). Confidential information can be disclosed in certain circumstances.* LPP protects confidential communications between solicitors/barristers and their clients for the purpose of obtaining and giving legal advice. Privileged communications must not be revealed or produced without the permission of the client, even in court proceedings. LPP is absolute and cannot be disclosed even if doing so would not violate the duty of confidentiality.
What type of systems and controls should be in place to comply with the duty of confidentiality?
- Effective systems and controls to enable you to identify risks to client confidentiality and to mitigate those risks. * Systems and controls should be appropriate to the size and complexity of the firm and the nature of the work undertaken. * Note, services should only be outsourced if you are satisfied that the provider has taken all appropriate steps to ensure that your clients’ confidential information will be protected.
What is the consequence to the breach of confidentiality?
- Solicitor may be disciplined by SRA or SDT. * Client can sue the solicitor for breach of this duty.
What is the duty of disclosure?
An individual who is advising a client must make the client aware of all information material to that retainer of which individual is aware.
What are the 4 exceptions to the duty of disclosure?
- Client giving informed consent, given or evidenced in writing.* Reason to believe disclosure would avoid serious physical harm or mental injury to a person* Legal restrictions imposed in the interest of national security or prevention of crime (e.g. AML or anti terrorism legislation)* Information was received in privileged documents mistakenly disclosed to you by another solicitor about their client (e.g. email chains from other side’s solicitor with damaging factual admission from their client)
Can you act for a new client who has an interest adverse to a current or former client?
You must not act if you (or your business/employer) hold confidential information belonging to the current/former client which is material (i.e. relevant and of more than inconsequential interest so may affect decision making) to the new client in that matter, unless: * Effective measures have been taken which result in there being no real risk of disclosure of the confidential information (e.g. structural safeguards so that the team working on the new client’s matter will not have access to the current/former client’s file) or* The current/former client gives informed consent, given or evidenced in writing, to you acting, including to any measures taken to protect their information.
Who enforces the SRA Standards and Regulations?
- SRA* Solicitor themselvesIt is a self-regulating profession
What are the 4 requirements of the general duty to co-operate?
- Keep up to date with and follow the law and regulation governing the way you work. * Co-operate with the SRA and other regulators and ombudsmen that oversee or investigat concerns in relation to legal services.* Not attempt to prevent anyone from providing information to the SRA or any other body exercising regulatory, supervisory, investigatory, or prosecutory functions in the public interest. * Not subject a person to detrimental treatment for providing information to the SRA or other approved requlator or proposing to provide such information, regardless of whether there is a subsequent investigation.
How must you respond to the SRA if they contact you?
Justify your actions in order to demonstrate compliance with SRA obligations
When requested by the SRA, when must remedial action be taken?
Promptly
Notifying SRA of Certain EventsWhat 3 events must a solicitor notify the SRA of?
- Subject to any criminal charge, conviction, or caution2. Insolvency event3. Aware of material changes to information about you or your practice provided to the SRAThis information must be provided promptly and even if not requested by the SRA.
Notifying SRA of Certain EventsHow often must a firm provide an information report to the SRA?
On an annual basis or such other period as requested by the SRA.This is usually the annual return.
Notifying SRA of Certain EventsWhat five events must a firm promptly notify the SRA of?
- Indications of serious financial difficulty2. Insolvency event3. Intention or awareness that it will cease operating as a legal business (any threats to existence)4. Any change to information in the register5. Aware of any material changes to information about the firm, or its managers, owners, or compliance officers provided to the SRA
Reporting Actual and Potential BreachesWhat must you do if you become aware any person or body (including yourself) has committed a serious breach?
Ensure that a prompt report is made to SRA/relevant regulator of any facts or matters which you reasonably believe are capable of amounting to a serious breach
Can the SRA request that you investigate whether there have been any serious breaches that should be reported?
Yes
Reporting Actual and Potential BreachesEven where you do not have sufficient information to determine whether a serious breach has occurred, what obligation do you have?
Promptly inform SRA of any facts or matters which you reasonably believe should be brought to its attention so the SRA can investigate or otherwise exercise its regulatory powers
Reporting Actual and Potential BreachesShould you still make a report where it would involve disclosing confidential information?
Yes.Example: You and your partner are working on a matter and you know your partner is tampering with evidence. You must report even if your client is upset with you.| Where principles conflict, the one re: wider public interest prevails
Reporting Actual and Potential BreachesHas the SRA defined what a serious breach is?
No, the SRA does not consider it a good idea to define the term.
Reporting Actual and Potential BreachesWhat are six allegations that are taken seriously by the SRA?
- Abuse of trust2. Dishonesty3. Taking unfair advantage of clients4. Misuse of client money5. Sexual or violent misconduct6. Criminal behaviourThese are set out in the SRA’s Enforcement Strategy.
How does the SRA deal with minor errors?
The SRA recognises that honest mistakes happen and do not regard a one-off minor error as serious. However, if there is an aggravating factor, any breach may be regarded as serious.Example: * Withdrawing £32,000 from a client account without the requisite cleared funds would amount to a single, ‘serious breach’ that would warrant a report. * Accidentally withdrawing £50 in such circumstances might not be considered to be “serious” if it is a one-off occurrence. * However, a pattern of unauthorised withdrawals of £50 could amount to a serious breach.
Reporting Actual and Potential BreachesWhat are five factors that could aggravate conduct to a serious breach?
- Deliberately or recklessly disregarding their obligations (e.g. knowingly acting outside their competence)2. Lack of honesty or integrity2. Taking advantage of vulnerability3. Causing harm that could have been reasonably anticipated to arise from conduct4. Pattern of repeated misconduct
Reporting Actual and Potential BreachesWhat are the two ways in a which a breach can be serious?
- Serious in isolation2. Persistent pattern of behaviour
Solicitor May Inform SRA IndirectlyHow can you satisfy your obligation to report via a COLP or COFA?
Make the report to the COLP or SOFA on the understanding that they will provide the information to the SRA
Solicitor May Inform SRA IndirectlyWhen you make a report to a COLP or COFA, do you have to follow up?
Generally, the obligation is discharged and you are not required to check
Solicitor May Inform SRA IndirectlyWhat must you do if you are not satisfied the COLP or COFA agrees with your assessment of the seriousness of the breach?
Make the report directly to the SRAExample: if the COLP or COFA laughs off your concerns, you must report directly.
Admitting Mistakes to ClientsWhat must you do if you make a mistake and a client suffers harm as a result?
- Put matters right (as far as possible)2. Promptly provide a full explanation of what happened and the likely impact
If you make a mistake that does not cause a client harm, do you have to admit this to the client?
Yes. Example: if you made a drafting error and you know the other side will allow you to correct it, you still have to tell the client.
Admitting Mistakes to ClientsIf you make a mistake on a client matter, what must you do if the SRA requests?
- Investigate whether anyone may have a claim against you2. Provide a report to the SRA3. Notify relevant persons that may have a claim
Admitting Mistakes to ClientsIn the event of a solicitor making a mistake on a client matter, why would a firm generally not act to put things right until after their insurer is notified?
Because depending on what the insurer advises, the firm may be placed into a conflict with the client as they will have to follow the insurers instructions and may need its consent before making an admission
If a solicitor makes a mistake on a client matter and the client has a potential claim in professional negligence, what must the advice to the client be?
To get new legal representation as the situation will create an own interest conflict and the solicitor can no longer act.
What is a client care letter and what 7 pieces of information should be included?
A retainer letter, sent out at the beginning of a matter, which sets out important information for the client including: * who they are acting for* who will be working on and supervising the matter* solicitor and client responsibilities* appropriate service levels* how services are regulated and the protection available to the client,* pricing information* information regarding complaintsThe SRA does not prescribe that such a letter is sent, but most firms consider this to be the most practical way to impart the information required by the SRA.
What is the firm thing you must identify in any matter?
Who you are acting forExample: when acting for a limited company, the client is the company, not the directors.
Informing Client of RegulationWhat information on regulation must you inform the client of at the outset?
- Whether and how the services are regulated2. How this affects protection available to the client3. Which activities will be carried out by you as a regulated person
Informing Client of RegulationWhat must you not hold out your business as being?
Authorised by the SRA when this is not the case
Keeping Client Informed About the MatterHow must you give information about legal services to clients?
In a way they undertand such that you ensure they are able to make informed decisions about: * the services they need* how their matter will be handled (i.e. by a qualified/non-qualified lawyer)* the options available to them
Keeping Client Informed About the MatterHow is the required standard of communication of information to a client likely to be tested on the SQE?
Client complains they didn’t understand the letter
Keeping Client Informed About the MatterWhat information must a client receive about pricing?
The best available information about:1. How the matter will be priced2. Likely overall cost (including hourly fees and estimated time), both at engagement and as matter progressesNote, at the beginning of a litigation matter, a client must be made aware of the risk-benefit analysis of the likely amount recovered against the likely cost of paying their own legal fees and those of the other side if they lose.
Keeping Client Informed About the MatterWhat must a you do if it becomes apparent initial costs will increase?
Notify the client and do not wait until the end of the matter
Complaints HandlingIn relation to complaints, what three things must a client be informed of in writing at the outset?
- The right to complain (about services and charges)2. How and to whom complaints can be made3. The right to complain to the Legal Ombudsman and when they can do so)
Complaints HandlingWhen also must you inform the client in writing of the right to complain to the Legal Ombudsman, the timeframe for doing so, and full contact details for the LeO?
When a client’s complaint has not been resolved to their satisfaction within eight weeks
Complaints HandlingWhat three things must a client be informed of if your complaints process is exhausted after the eight week period?
- That you cannot resolve the complaint2. Name and website of alternative dispute resolution body3. Whether you agree to use the scheme operated by that body (note, you are not required to submit complaints to ADR, just to provide information)
Complaints HandlingHow should complaints be handled?
Promptly, fairly, and free of chargeExample: admin fees/taking 6 months to deal with a complaint would be unacceptable.
PublicityWhat must you ensure that publicity in relation to your practice is not?
Inaccurate and misleadingNote, this applies charges and circumstances in which interest is payable by or to clients.
PublicityIs public advertising of legal services e.g. on billboards, radio, online allowed?
Generally, yes
PublicityWhat can you not do in relation to publicity of your legal services?
- Make unsolicited approaches to members of the public in order to advertise legal services2. Advertise in a targeted or intrusive way (e.g. telephone or visiting people’s homes)
PublicityWhat is an exception to the rule that you may not make unsolicited approaches or advertise in a targeted way?
You may approach current and former clients to advertise legal services
Can a solicitor distribute leaflets advertising their services to everyone in a city?
Generally, yes.However, if the solicitor only distributed the leaflets to expensive houses in the city, this would be targeted and therefore a breach.
What are the Transparency Rules introduced by the SRA in December 2018?
Rules that are outside the Codes of Conduct, which contain important regulatory requirements regarding the publishing of information to consumers on a firm’s website
Under the Transparency Rules, regulated firms in which 7 areas are required to publish prices and service information?
Prices and service information must be displayed if firms publish that they work in any of the following areas:* Conveyancing (residential);* Probate (uncontested);* Motoring offences (summary offences);* Immigration (excluding asylum);* Employment tribunals (unfair/wrongful dismissal);* Debt recovery (up to £100,000); or* Licensing applications (business premises).
If a firm is required to publish prices and service information under the Transparency Rule, how must the pricing information be presented?
Price information must be presented in a clear and easy to understand format. The firm must also:* Provide a total cost (if not possible, an average or range of costs)* Explain the basis of the charges (hourly/fixed rates)* Highlight likely disbursements, and their costs;* Be clear on whether VAT is included * For conditional or damages-based fees, explain when clients may have to make payments.
If a firm is required to publish prices and service information under the Transparency Rule, how must the service information be presented?
- Explain what services are included for the quoted price* Highlight any services not included within the price (that might be reasonably expected to be included)* Include information on key stages and typical timescales of these* Publish the qualifications and experience of anyone carrying out the work and of their supervisors.
Do firms without a website need to provide any information under the Transparency Rules?
For firms without a website, price and service information must beavailable upon request in other formats.
In addition to price and service information, do firms within the scope of the Transparency Rules need to publish anything else?
Firms must display a digital badge on their website to indicate to consumers that they are regulated and which will provide a link to information on the protection for consumers that this provides.
What is professional conduct?
The rules that solicitors must comply with which affects their professional and personal lives. A solicitor must always maintain high ethical standards in their dealings with their clients, fellow professionals, and others.
What does ‘registration on the roll’ mean?
A person who has been admitted as a solicitor is said to be on the ‘roll’ of solicitors. Registration entitles the person to become a member of the Law Society and practice as a solicitor.
What is the Law Society?
- The professional body that represents solicitors in England and Wales.* Amongst other things, lobbies the Government on legal issues and changes in the law, produces guidance and support for solicitors, and tries to improve the reputation of solicitors with the public. * Note: it no longer regulates lawyers.
What is the SRA and what are its 4 functions?
The Solicitors Regulation Authority Functions:* regulates solicitors. * controls entry to the profession and training requirements.* produces of the SRA Standards and Regulations * handles professional conduct complaints and can investigate the firm or solicitor involved.
What is the SDT?
Solicitor’s Disciplinary Tribunal Function: * Hears applications regarding allegations against solicitors of unbefitting conduct and/or professional misconduct. It is independent of the SRA and the Law Society.The tribunal includes lay members and solicitor members.
What is the LSB?
Legal Services BoardFunction: overarching regulator for various ‘approved regulators’ of the legal profession including the Bar Council (which requlates barristers) and the SRA.
What is the LeO?
Legal OmbudsmanFunction: * deals with complaints from individuals and smaller companies/organisations * against solicitors and other legal professionals * regarding services that the lawyer has provided (or refused to provide), * usually after exhausting the law firm’s internal complaints procedure . The law firm has eight weeks to deal with the complaint.No jurisdiction to investigate conduct complaints
What are the SRA Standards and Regulations and what are the 3 parts?
They set out the standards and requirements the SRA expects its regulated community to achieve and observe, for the benefit of the clients they serve and in the public interest.3 parts:1. SRA Principles2. SRA Code of Conduct for Solicitors, RELs, and RFLs.3. SRA Code of Conduct for Firms
What are the 5 powers of the SRA in the event of a finding of misconduct?
- Warn solicitors about future conduct* Impose a fine* Impose conditions on a practising certificate* Intervene in and close the solicitor’s firm* Refer the matter to the Solicitor’s Disciplinary Tribunal.The SRA may take regulatory action against a solicitor or firm for a ‘serious failure’ to meet the standards and controls set out in the SRA Principles and Codes.
What are the 4 powers of the SDT in the event of a finding of misconduct?
- Strike the solicitor off the roll* Suspend the solicitor from practice* Reprimand the solicitor* Impose an unlimited fine
What remedies can LeO award?
Requiring the lawyer to: * give an apology* pay compensation up to £50,000* put right any error or omission* pay the costs of the complainant.
What are the SRA Principles?
The 7 fundamental tenets of ethical behaviour that are expected of solicitors.
What is the SRA Code of Conduct for Solicitors, RELs, and RFLs?
A code regulating the conduct of solicitors, RELs (Registered European Lawyers) and RFLs (Registered Foreign Lawyers). It describes the standards of professionalism expected by the SRA and the public.
What is the SRA Code of Conduct for Firms?
A code regulating the conduct of firms (including sole practies).It describes the standards and business controls expected by the SRA and the public. Breaches may result in actions against the firm itself, or its managers or compliance officers, or against employees within the firm.
What Codes are solicitors who own and manage firms subject to?
Both the SRA Code of Conduct for Solicitors, FELs and RFLs and the SRA Code of Conduct for Firms.
What is a retainer?
The contract between the solicitor and the client to carry out the agreed legal services, usually in return for the payment of the solicitor’s legal fees, plus any VAT.
What happens if the solicitor does not indicate that the legal fees are subject to VAT?
The legal fees are deemed to include the VAT.
