Ethics - Obtaining Instructions (3) Flashcards
What is the general law on advertisement of law firm services?
By the very nature of their work solicitors hold a good deal of information about their client’s and others. Such information must not be misused. The UK General Data Protection Regulation (GDPR) and the Data Protection Act 2018 (DPA 2018) require those who are ‘controllers’ or ‘processors’ of personal information to handle it in particular ways, and impose penalties on processors who are in breach of their duties.
The precise details of the duties and penalties are beyond the scope of this manual, but, broadly, personal information is defined in the GDPR as ‘any information relating to an identified or identifiable natural person’, controlling means determining the purpose and manner in which personal data is processed, and processing includes collecting, recording, organising, storing and disclosing such information, whether by automated or manual methods.
A data processor must comply with all six principles set out in the GDPR (eg personal data must be accurate and, where necessary, kept up to date), and a data controller is responsible for, and must be able to demonstrate compliance with, these principles.
A data controller can only process data on one or more of the six legal grounds in the GDPR or a public interest ground set out in the DPA 1998. A data processor may have to obtain express consent from a person about whom data is collected and stored (‘a data subject’), and the data subject will have rights over their data, including the right to see the data by making a subject access request and to have the data erased in certain circumstances, for example where personal data is no longer necessary for their intended collection and processing purpose.
There are various other legislative provisions on advertising and data protection including the UK Code of Non- broadcast Advertising and Direct and Promotional Marketing (CAP Code).
What are the professional conduct requirements for advertising law firm services?
The SRA considers that there is an imbalance of knowledge between the general public on the one hand and the solicitor providing the service on the other. Accordingly, publicity in relation to the firm must be accurate and not misleading, including that relating to charges and the circumstances in which interest is payable by or to clients (Paragraph 8.8).
The term ‘publicity’ is very widely defined and includes all promotional material and activity, including the name and description of the 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 electronic form (SRA Glossary). It does not, however, include press releases prepared on behalf of a client.
What are the SRA transparency rules for advertising law firm services?
The SRA Transparency Rules came into effect in December 2018 with the stated aim of making sure that consumers of legal services have the information they need to make an informed choice of legal services provider, including understanding what the costs may be. The Rules require all firms regulated by the SRA (and individual freelance solicitors and solicitors providing services to the public from outside SRA- authorised firms), who publish as part of their usual business the availability of any of the services specified in the Rules, to publish certain information about the costs of those services. This does not apply to publicly funded work.
The Rules set the minimum information that must be provided. However, the SRA encourages firms to provide additional information if it would be helpful for consumers.
The specified services in relation to individuals are:
* residential conveyancing,
* uncontested probate (where all assets are within the UK),
* motoring offences (summary only offences),
* employment tribunals (claims for unfair or wrongful dismissal),
* immigration (excluding asylum applications).
The specified services in relation to businesses are:
* debt recovery (up to £100,000),
* employment tribunals (defending claims for unfair or wrongful dismissal),
* licensing applications for business premises.
The information on the costs must include the following:
(a) the total cost of the service or, where this is not practicable, the average cost or range of costs, and details of any disbursements;
(b) the basis for the charges (including any hourly rate or fixed fees);
(c) what services are included within the displayed price and details of any services which might reasonably be expected to be included in the price but are not;
(d) the experience and qualifications of anyone carrying out the work (and their supervisors);
(e) whether VAT is payable on the fees or disbursements and, if so, if this is included in the price;
(f) typical timescales and the key stages of the matter;
(g) if conditional fee or damages- based agreements are used, the circumstances in which clients may have to make any payments themselves for the services received (including from any damages).
The costs information must be published in a prominent place on the website which is accessible, clearly signposted and easy to find. Where the firm or solicitor does not have a website, the Rules require that the information must be made available on request.
Can solicitors make unsolicited approaches to clients?
A solicitor may wish to ‘cold call’ individuals in order to promote the solicitor’s business.
A solicitor must comply with the general law applicable to such marketing. This means that the solicitor must have all consents required by the relevant data protection legislation for the type of marketing the solicitor intends to carry out.
Data protection legislation also permits all individuals to request that their details are not used for direct marketing purposes, and therefore if a solicitor receives such a request, it should be taken seriously and complied with.
In addition, 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 in order to advertise legal services provided by the firm or solicitor.
Unsolicited approaches made to current or potential business contacts would not count as being made ‘to members of the public’ for these purposes and so are permitted provided they comply with the general law.
Paragraph 8.9 is intended to prevent direct or specifically targeted approaches to members of the public in person, by phone or other means. Newspaper and TV advertisements are in a sense ‘unsolicited’ approaches, but would not be caught by Paragraph 8.9 because they are not individual or targeted and so could not be regarded as intrusive.
In its Guidance: Unsolicited approaches (advertising) to members of the public, the SRA draws a distinction between sending leaflets to all homes in a large geographic area and selectively distributing leaflets to only specific homes or individuals based on wider information. The former is permitted because it would not be a targeted approach.
What are the professional conduct rules on letterheads, websites and emails?
A solicitor 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 that it is a solicitors’ firm unless it is a body authorised by the SRA (Paragraph 5.4).
Likewise, there is an obligation to ensure that clients understand whether and how the services provided are regulated, including explaining which activities will be carried out as a person authorised by the SRA, any services which may be regulated by another approved regulator and ensuring that no business or employer is represented as being regulated by the SRA when it is not (Paragraph 8.10).
The Transparency Rules require that a body authorised by the SRA must display in a prominent place on its website its SRA number and the SRA’s ‘digital badge’ (a ‘clickable’ logo which confirms that it is regulated and links to information on the protections this offers its clients).
The website must publish the firm’s complaints handling process, together with details about how to complain to the SRA and the Legal Ombudsman. In addition, its letterhead and emails must show its SRA authorisation number and the words ‘authorised and regulated by the Solicitors Regulations Authority’.
What are the specific provisions about solicitors having social media?
Whilst there are no specific provisions in the Code of Conduct that apply to the use of social media by solicitors, regard must still be had to the Principles and the relevant standards in the Code when using social media as a marketing tool. For example, if a relationship with a client is established and continued via social media, the solicitor must still comply with the standards in the Code of Conduct on service and competence and with regard to confidentiality and disclosure.
A Law Society practice note on social media gives as an example a solicitor commenting on Twitter that they are in a certain location at a certain time which may result in the solicitor unintentionally disclosing that they are working with a client, so breaching the duty to keep the affairs of clients confidential.
What are the SRA rules on arrangements with third parties?
In addition to targeting the general public, a solicitor may also wish to enter into an agreement with a third party to introduce clients to the solicitor.
Likewise, the solicitor may want to enter into an agreement to refer clients to a third party, such as another lawyer or a financial services provider.
Any such arrangement must comply with the SRA Principles and the relevant paragraphs of the Code of Conduct for Solicitors.
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.
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.
A client may be introduced to the solicitor by a third party. The term ‘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 one another’.
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. So, for example, the client must not have been acquired as a result of ‘cold calling’. The client must be informed of any financial or other interest which the introducer has in introducing the client to the solicitor.
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.
Fee- sharing would occur if a solicitor made a payment to a third party in respect of a percentage of the solicitor’s gross or net fees for a particular period. Clients must be informed of any fee- sharing arrangement that is relevant to their matter, and the fee- sharing agreement must be in writing.
What are the SRA rules on arrangements with third parties?
Personal injury context
Historically there was a ban on solicitors paying or receiving referral fees. Although the blanket ban was lifted in 2004, referral fees are still prohibited by legislation in certain circumstances. Under the Legal Aid, Sentencing and Punishment of Offenders Act 2012(LASPO), the payment or receipt of referral fees in claims for damages following personal injury or death is prohibited. LASPO also 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.
Under Paragraph 5.2, where it appears to the SRA that a solicitor has made or received a ‘referral fee’, the payment will be treated as such a fee unless the solicitor is able to show otherwise. The term ‘referral fee’ in this context is defined in the SRA Glossary by reference to the relevant provisions of LASPO and so, as outlined above, refers to prohibited fees in personal injury cases.
What are the SRA rules on separate businesses?
A separate business essentially means a business which is owned by or connected with a body authorised by the SRA, or which owns the authorised body or in which the authorised body directly participates in the provision of its services and which is not itself authorised by the SRA or another approved regulator or an overseas practice (SRA Glossary). The SRA considers it important that the public is not confused or misled by a solicitor or firm incorporating non- regulated services into their practice, not least because the protection (if any) they obtain in using such services can be different from that for mainstream legal services regulated by the SRA.
Solicitors should ensure that they do not represent any separate business as being regulated by the SRA (Paragraph 8.10(c)). Historically, examples of the kinds of services that a separate business offered are alternative dispute resolution, financial services and an estate agency.
However, the SRA Authorisation of Firms Rules permit recognised bodies and sole practices to offer a wider range of services than before, including the kind of services mentioned above, and so a separate business would no longer be required in order to offer these.
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).
