Professional Conduct Flashcards
(1) What is the GENERAL Rule about acting for 2 or more client when there is a ‘Conflict of Interest’?
(2) What are the 2 EXCEPTIONS to this rule?
NOT Act if there is a CONFLICT OF INTEREST or SIGNIFICANT RISK of one arising
UNLESS
(1) SUBSTANTIALLY COMMON INTEREST
(2) COMPETING SAME OBJECTIVE
There are 2 Exceptions to the GENERAL Rule that you should NOT act for 2 or > clients if there is a CONFLICT OF INTEREST or SIGNIFICANT RISK of one arising.
(1) What are these 2 Exceptions
(2) What 3 factors must also be met for them to apply?
(1)
(a) SUBSTANTIALLY COMMON INTEREST
(b) COMPETING SAME OBJECTIVE
(2)
(a) All clients given INFORMED WRITTEN CONSENT
(b) Safeguards in place for CONFIDENTIAL INFO +
(c) Solicitor thinks its REASONABLE TO ACT
Can you act for a BUYER AND SELLER in a property Transaction?
Generally NO (if land transferred for value)
Possible under ‘Substantially Common Interest’ exception if Land:
(a) GIFTED
(b) Transferred between ‘CONNECTED PARTIES’ (e.g. companies same group, husband and wife)
Can you act for a BUYER AND LENDER in a RESIDENTIAL Property Transaction?
Generally YES
Unless
(a) Non-Standard Mortgage Terms (e.g. onerous)
(b) Non-Standard Lender
Can you act for a BUYER AND LENDER in a COMMERCIAL Property Transaction?
Generally NO - often Negotiation between parties
If a one Partner in a married couple comes to you re the JOINT PURCHASE / SALE of a Home, what are 2 options of things should the solicitor obtain from the other Partner?
(1) JOINT WRITTEN INSTRUCTIONS
(2) SIGNED LETTER authorising other partner to handle the purchase / sale
Can you act for JOINT BORROWERS?
Generally YES BUT look out for ‘ETRIDGE scenario’ (husband uses marital home as security for a business loan)
When acting for JOINT BORROWERS where a husband uses marital home as security for a business loan:
(1) What ‘Guidelines’ must be followed?
(2) What does this involve (3 main components)
(1) ‘Etridge Guidelines’
(2)
(a) FACE-FACE meeting with spouse (WITHOUT partner present)
(b) Explain legal / practical implications (e.g. could lose home)
(c) Provide WRITTEN CONFIRMATION to lender
(1) What is an ‘Undertaking’?
(2) What liability do solicitors have when an ‘Undertaking’ is given?
(3) What 2 things should be done if an ‘Undertaking’ is OUTSIDE YOUR CONTROL (i.e. dependent on 3rd parties?
(1) Promise to do / NOT do something
(2) Personal liability
(3)
(a) QUALIFY undertaking (e.g “I undertake to transfer the deposit the next working day provided that I receive the funds from my client)
(b) DO NOT GIVE Undertaking
What 2 types of clients does the ‘Duty of Confidentiality’ apply to?
(1) CURRENT Clients
(2) FORMER Clients
What are the 2 exceptions to the ‘Duty of Confidentiality’?
(1) LEGAL OBLIGATION (e.g. money laundering, court order, prevent serious harm / crime)
(2) CLIENT CONSENTS
There is a ‘Duty of Disclosure’ (i.e. make client aware of all information you have knowledge of).
Does this take priority over the ‘Duty of Confidentiality’?
Duty of Confidentiality > Duty of Disclosure
If you act for both BUYER & LENDER and the Buyer lets you know their intention to breach the ‘Mortgage Agreement’ following completion by renting out the property. What should you do?
(1) Seek CONSENT of buyer to inform Lender (exception to DOC)
(2) IF Refuse - CEASE TO ACT (DOC > DOD)
(3) DO NOT Disclose reasons why to Lender (DOC)
