Ethics & Professional Conduct – Course Summary:

Chapter 1: Ethics and Regulations

The purpose, scope and content of the SRA Code of Conduct for Solicitors, RELsand RFLs

‘Professional conduct’ is theterm that is often used to describe the rules and regulations with which a solicitor
mustcomply.

Ethics:

‘The commitment to behaving ethically is at the heart of what it means to be a solicitor.’ - Ethics in Law, the
Law Society

Ethics is a system of moral principles or values governing how people behave.

It is generally accepted that solicitors aresubject to additional ethical obligations —> solicitors are expected
to adopt higher standards of ethical behaviour.

Law Society (Solicitors Regulation Authority) v Emeana and others (2013), Lord Justice Moses: : ‘I do not
believethat the public would find it acceptable that those who have behaved in this way should beallowed to
act as solicitors.’

The particular expectations placed on solicitors to behave ethically arise because solicitors have a special
relationship with their clients and a special place within the justice system.

The ethical approach is the one which produces the best outcome.
There are core standards to be applied, but there is also flexibility. Personal judgment must be applied and the
individual facts of the case considered.

The Solicitors Regulation Authority:

The Solicitors Regulation Authority (SRA) regulates solicitors, the bodies in which they operate and all those
working within those bodies.

The SRA publishes and enforces rules governing how solicitors behave and conduct their business —>
contained in the SRA Standards and Regulations.

The SRA Standards and Regulations deal with a variety of regulatory matters. Key elements are:

—> The SRA Principles:

These set out the fundamental requirements of ethical behaviour which must be upheld by all those
regulated by the SRA. The Principles underpin the Standards and Regulations.

—> The SRA Code of Conduct for Solicitors, RELs and RFLs (‘Code of Conduct for Solicitors’):

This sets out the standards of professionalism required from the individuals (solicitors, registeredEuropean
lawyers and registered foreign lawyers) authorised by the SRA to provide legalservices.
 Such individuals are personally accountablefor compliance with the Code.

—> The SRA Code of Conduct for Firms:

This sets out the standards and business controls expected of firms (including sole practices) authorised by the
SRA to provide legal services.

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Failure to meet its standards may lead to the SRA taking regulatory action against the body itself as an entity,
or its managers or compliance officers.

The Code of Conduct for Solicitors and the Code of Conduct for Firms are known collectively as the Code of
Conduct.

—> The SRA Accounts Rules:

These detail specific requirements placed on solicitors in financial matters, in particular whendealing with
money belonging to clients or third parties.

—> The SRA Glossary:

This contains all the defined terms (which appear in italics in the text) from the Codes, Rules and Regulations.

Allreferences to ‘Principle’ are to the SRA Principles and references to ‘Paragraph’ are to theCode of Conduct
for Solicitors unless stated otherwise.

From time to time the SRA issues Guidance to supplement the SRA Standards and Regulations. The SRA
Standards and Regulations are underpinned by the SRA Enforcement Strategy.
Not every breach of the rules will result in an investigation being undertaken or sanctions beingimposed by
the SRA. The SRA’s focus is on behaviour or breaches which it considers to be ‘serious’.

Complaints:

A complaint may be made about something which happens, or fails to happen, during the conduct of the
client’s matter, or arises at the end when the client is dissatisfied with the outcome.

Dealing with all complaints appropriately is part and parcel of delivering a professional service.

The Code of Conduct for Solicitors contains some specific requirements in respect of complaints handling.

A solicitor must either establish and maintain, or participate in, a procedure for handling complaints in
relation to the legal services they provide (Paragraph 8.2).

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 and when they can make such
complaint.

Under the SRA Transparency Rules, certain information about complaints procedures must be published on
a firm’s website, or be made available on request if the firm has no website.
 In most cases adissatisfied client should use this procedure first, before taking more formal action.

When a client has made a complaint, if this has not been resolved to the client’s satisfaction within eight
weeks following the making of a complaint, the solicitor must ensure (Paragraph 8.4) that the client is
informed in writing:
(a) of any right they have to complain to the Legal Ombudsman, the timeframe for doing so and full
details of how to contact the Legal Ombudsman; and
(b) if a complaint has been brought and the complaints procedure has been exhausted:
(i) that the solicitor cannot settle the complaint;
(ii) the name and website address of an alternative dispute resolution (ADR) approved body
which would be competent to deal with the complaint; and
(iii) whether the solicitor agrees to use the scheme operated by that body.

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The Chartered Trading Standards Institute has approved a number of ADR entities that will beable to provide
ADR services.

Clients’ complaints must be dealt with promptly, fairly and free of charge (Paragraph 8.5).

The Legal Ombudsman:

The Legal Ombudsman for England and Wales (‘LeO’) deals with complaints made againstsolicitors,
barristers, legal executives, licensed conveyancers, notaries and patent attorneys(amongst others).
 Usually first point of contact for a client with a complaint about their solicitor or the legal service they
have received.
 No need for the client to have suffered a loss for LeO to make a determination against solicitor —>
The mere fact that the solicitor has provided serviceswhich are not of the quality reasonably to be
expected of a solicitor is enough.

Only certain types of clients can complain to the LeO, including:

 Individuals
 Micro-enterprises (ie fewer than 10 staff and a turnover/balance sheet value not exceeding €2 million)
 Charities
 Clubs and associations with annual income net of tax of less than £q million
 Personal representatives/beneficiaries of a person’s estate.

The complaint must relate to an act/omission by the solicitor and must relate to the services which the
solicitor provided.
 LeO also accepts complaints in relation to services which the solicitor offered, provided or refused to
provide to the complainant.

Ordinarily, the complainant cannot use the LeO unless the solicitor’s own complaints procedure has been
used, but can do so if:
(a) the complaint has not been resolved to the complainant’s satisfaction within eight weeks of being
made to the solicitor; or
(b) the LeO considers that there are exceptional reasons to consider the complaint sooner, or without it
having been made first to the solicitor; or
(c) the LeO considers that in-house resolution is not possible due to irretrievable breakdown in the
relationship between the solicitor and the complainant.

With effect from April 2023 the complaint should be brought no later than:
 one year from the act/omission; or
 one year from when the complainant should reasonably have known there was cause forcomplaint.

However, the LeO has a discretion to extend the time limits to the extent it considers fair.

When the LeO accepts a complaint for investigation, it aims to resolve it by whatever means it considers
appropriate, including informal resolution.
 If investigation is necessary: parties make representations
 Hearing held if LeO considers complaint cannot be determined fairly without one.

Once the complainantaccepts or rejects the determination (or fails to respond), the solicitor and the SRA will
benotified of the outcome.
Details of the procedure set out in the Scheme Rules.

The LeO’s determination may direct the solicitor (or their firm) to:
(a) apologise;
(b) pay compensation (together with interest) for any loss suffered and/or inconvenience/distress
caused;
(c) ensure (and pay for) the putting right of any error or omission;
(d) take (and pay for) any specified action in the interests of the complainant;
(e) pay a specified amount for the costs of the complainant in pursuing the complaint;

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 (f) limit the solicitor’s fees (including requiring that all or part of any amount paid isrefunded, with or
without interest, or that all or part of the fees are remitted).

Limit of £50,000 on total value that may be awarded as compensation and the costs in respect of (c) and (d).
The limit does not apply to (a), (e) or (f) above, or to interest oncompensation for loss suffered.

If the complainant accepts the determination, it is binding on the parties and final - cannot then start/continue
proceedings on that same subject matter.

Determination may be enforced through the High Court or county court.

If the complainant rejects the determination, both parties remain free to pursue other legal remedies (such as
suing for negligence).

If LeO considers that the resolution of aparticular legal question is necessary in order to resolve a dispute, it
may refer that questionto the court.

Breach of professional conduct:

Professional misconduct:

‘Professional misconduct’ primarily concerns breaches of the SRA’s Principles and/or the Codesof Conduct.

The role of the SRA:

Although complaints from the general public are received through the LeO, complaints primarily concerning a
breach of professional conduct will go on to be dealt with by the SRA.

Primary role of SRA: protect the public.

Upon receiving an allegation of breach, the SRA will decided whether or not to carry out an investigation.

The SRA makes the decision by applying its three step Assessment Threshold Test:
(1) has there been a potential breach of the SRA Standards and Regulations based on the allegations
made;
(2) is that potential breach sufficiently serious that, if proved, is capable of regulatory action;
(3) is the breach capable of proof?

Notice will be given to that individual or firm setting out theallegation and facts in support and other relevant
information and inviting them to respond with written recommendations within a specified time period.

The SRA has the power, under s 44B SolicitorsAct 1974, to serve a notice on a solicitor requiring the
delivery of a file or documents in the possession of the solicitor to the SRA.
Paragraph 7.4 imposes an obligation to respond promptly to the SRA and provide information and
documents in response to any such request.

Powers of SRA following a finding of professional misconduct depend on the subject of the complaint.
Approach set out in the SRA Enforcement Strategy - examples of action include:
(a) Take no further action with or without issuing advice or a warning about future conduct:
o The SRA may decide at any stage that no further action is necessary and, in doing so,may decide to
issue advice to the individual against whom the allegation was made orissue a warning to them about
their future conduct or behaviour.
o Appropriate for minor regulatory breach which does not require protection of public interest.
(b) Impose a financial penalty or written rebuke:

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 o The maximum financial penalty for solicitors is £25,000. The SRA is intending to introducea fixed
penalty scheme in 2023 for specified breaches by firms, eg a failure to provideinformation or
documents to the SRA when requested.
(c) Control how the solicitor practices:
o The SRA may impose conditions on, or suspend, a solicitor’s practising certificate, or makean order
to control the person’s activities in connection with legal practice.
o It may alsoimpose conditions on, revoke or suspend the terms and conditions of authorisation of a
firm.
(d) Refer the matter to the Solicitors Disciplinary Tribunal:
o Such a referral will be made where the SRA considers that its own powersare not sufficient to deal
with the matter
o Only the Solicitors DisciplinaryTribunal has the power to take the most severe sanction of striking the
solicitor off the roll.
o In future, referrals are likely to be reserved for the most seriouscases of individual professional
misconduct and those involving unusual aspects, such asallegations of sexual misconduct,
misappropriation of client money or where there is likelyto be high public interest.

Any of the decisions set out in (b) to (d) above may be made by agreement between the SRAand the
individual in question.

The SRA makes its regulatory decisions public.

The Solicitors Disciplinary Tribunal:

The Solicitors Disciplinary Tribunal (SDT) hears and determines applications relating to allegations of
unbefitting conduct and/or breaches of the requirements of professional conduct by a number of legal service
providers, including solicitors.

The SRA may make an application when it is satisfied that there is a realistic prospect of the SDT making an
order in respect of the allegation and it is in the public interest to make the application.

Except wherethe Solicitors Act 1974 expressly provides otherwise, any person may make an application
directly to the SDT without first making a complaint to the SRA

The SDT was established by s 46 Solicitors Act 1974 and is independent of both the Law Societyand the
SRA. Members of SDT appointed by the Master of the Rolls.

—> Procedure:

SDT has power of making rules governing its procedure and practice.
The SRA maintains a panel of solicitorsin private practice who prosecute applications before the SDT on its
behalf.

The SDT does not have power of investigation nor will it collect evidence itself.

 An application to the SDT must be made in the prescribed form, supported by evidence (thi swill be
prepared by the panel solicitor, or the SRA’s advocate where the applicant is theSRA).
 The SDT will consider the application and, if satisfied that there is a case to answer, will fix a hearing
date.
o Each party at hearing may be represented by solciitor/counsel
o Evidence is given on oath and witnesses may be called
 The decisions of the SDT are called ‘Judgments’ and ‘Orders’:
o The Order itself, together withbrief reasons for the decision, is made available at the end of
the hearing. Takes effect once filed with the Law Society.
o A detailed written Judgment containing reasons,findings and repeating the Order is made
available to the parties, the Law Society and theLaw Society’s Gazette after the hearing.

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Where (unusually) an application is made directly to the SDT, the SDT may refer the matterto the SRA for
investigation before proceeding with the application.

—> Powers of the SDT:

Section 47 Solicitors Act 1974 gives the SDT power to make such order as in its discretion it thinks fit,
including the following:
(a) striking a solicitor off the roll (once struck off the SDT may also restore a solicitor to the roll);
(b) suspending a solicitor from practice or imposing restrictions upon the way in which a solicitor can
practise;
(c) imposing an unlimited fine payable to HM Treasury;
(d) reprimanding the solicitor;
(e) requiring the payment by any party of costs or a contribution towards costs.

An appeal from a substantive decision of the Disciplinary Tribunal is made to the Administrative Court.

Powers of the Court:

A solicitor is an officer of the court. Accordingly, the court has jurisdiction to discipline the solicitor in
respect of costs within any matter before the court. The court may order the solicitorto pay costs to their own
client, or to a third party (Civil Procedure Rules, rr 44 and 45)

Negligence:

A solicitor owes a duty of care to the client in the law of tort.

Where the solicitor breaches this duty and the client suffers loss as a result, the solicitor may be sued by the
client for negligence.

The LeO and the SRA have no power to adjudicate upon issues of negligence in a legal sense: they are not
courts.
 Where there is an overlap: LeO may adjudicate on those services where its powers of redress would
beadequate to compensate the client.

A solicitor must be ‘honest and open’ with clients if things go wrong, and if a client suffers loss or harm as a
result, matters are to be put right (if possible) and a full and prompt explanation given as to what has
happened and the likely impact.

If requested to do so by the SRA, a solicitor must investigate whether anyone may have a claim against them,
provide the SRA with a report on the outcome of the investigation and notify relevant persons (Paragraph
7.11).

Consideration must be given as to whether a conflict of interests has arisen and/or whetherthe client should be
advised to obtain independent advice.

Where the solicitor does cease to act for the client, and is asked to hand over the papers to another solicitor
who is giving independent advice on the merits of a claim, the solicitor should keep copies of the original
documents for their own reference.

The SRA Compensation Fund:

The SRA Compensation Fund is maintained by the SRA under ss 36 and 36A Solicitors Act 1974.
 Governed by the SRA Compensation Fund Rules

It exists as a discretionary fund of last resort to make grants to persons whose money has been stolen or
otherwise not accounted for as the result of an act or omission of those regulated by the SRA, and to relieve
losses for which SRA-authorised bodies should have had insurance but did not.

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It is funded by mandatory contributions by all solicitors and SRA-authorised bodies.

The term ‘defaulting practitioner’ includes a solicitor.

Eligibility criteria setting out those applicants that may be able to apply for a grant are set outin the SRA
Compensation Fund Rule
 No automatic entitlement: applications are assessed.

Limit: the Fund does not pay out sums of more than £2 million per claim.
 Where there are multiple related or connected claims, the SRA may impose a cap of £5 million on the
totalamount paid.

The Fund can take proceedings against the defaulting solicitor to recover the amount paid out of the
Fund.

The Code of Conduct for Solicitors imposes an obligation on solicitors to ensure that clients understand the
regulatory protections available to them, and this will include eligibility toclaim under the Fund (Paragraph
8.11).

Chapter 2 - SRA Principles:

The SRA Standards and Regulations begin with the SRA Principles. These Principles define the fundamental
ethical and professional standards that the SRA expects of all firms and individuals it regulates.

The Principles are all-pervasive and underpin all of the SRA’s regulatory arrangements.
The Principles are therefore a starting point for any consideration of a solicitor’s professional conduct
responsibilities.

An overview of the principles:

“The SRA Principles comprise the fundamental tenets of ethical behaviour that we expect all those we
regulate to uphold.”

 Mandatory
 If not met, are likely to give rise to action being taken by the SRA in accordance with its Enforcement
Strategy

The Principles are as follows:

You act:
a. in a way that upholds the constitutional principle of the rule of law, and the proper administration of
justice;
b. in a way that upholds public trust and confidence in the solicitors’ profession and in legal services
provided by authorised persons;
c. with independence;
d. with honesty;
e. with integrity;
f. in a way that encourages equality, diversity and inclusion;
g. in the best interests of each client.

In case of conflict: it is those Principles that safeguard the wider public interest (such as the rule of law, and
public confidence in the profession) which take precedence over the interests of an individual client.

Justice and the Rule of Law:

Principle 1 - breach: ie. where a solicitor commits a criminal offence

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Under the SRA Enforcement Strategy, factors such as an inherently serious offence, substantial harm caused
to others and vulnerability of the victim would all point to more severe sanctions being imposed.

SRA v Farrimond [2018] EWHC 321 (Admin):

The solicitor in the case held a senior position in the Crown Prosecution Service. He was described as having
been a competent and respected solicitor for 28 years. The solicitor pleaded guilty to the attempted murder of
his wife. At the time of the offence the solicitor had been suffering from severe depression.

Mr Justice Garnham said: ‘In my view, the commission of an offence of attempted murder, on facts such as
these, is wholly incompatible with remaining on the Roll of Solicitors or remaining an officer of the Court.’

Example: a solicitor who, in presenting the client’s case, misleads the court will be in breach of Principle 1.

The principles applies also in relation to clients and to third parties with whom the solicitor may deal.

Public Trust:

Principle 2 - It is essential for the public to be able to place trust and confidence in solicitors.
 Bolton v Law Society [1994] - Sir Thomas Bingham MR: ‘A profession’s most valuable asset is its
collective reputation and the confidence which that inspires.’

At all times clients are entitled to assume that their solicitor will behave professionally and protect their
interests.

The protection of the reputation of the profession in the eyes of the general public is a key aspect of the SRA’s
role.

A solicitor may harm the public’s trust in the profession by behaviour outside the solicitor’s practice.
 Ie. conviction of a criminal offence wholly unconnected with the solicitor’s practice would lead the
solicitor to breach Principle 2.
 Behavior does not need to be criminal in nature in order to fall foul of Principle 2.
 Ie. Sending derogatory emails to the opponent’s solicitor and making offensive social media posts in a
personal capacity are both examples of acts by a solicitor likely to breach Principle 2.

Independence:

Principle 3 - ‘Independence’ in this context means a solicitor’s own and the firm’s independence, and not
merely the solicitor’s ability to give independent advice to a client.

A solicitor should avoid situations which might put their independence at risk, for example giving control of
their practice to a third party which is beyond the regulatory reach of the SRA.

Where a solicitor has a conflict of interest which prevents them from giving unbiased and objective advice,
they cannot act with independence and should therefore decline to act.

Independence includes independence from the client: ‘A solicitor is independent from

his client and having regard to his wider responsibilities and the need to maintain the profession’s reputation,
he must and should on occasion be prepared to say to his client, what you seek to do may be legal, but I am
not prepared to help you to do it’

Honesty:

Principle 4 - one of the most fundamental principles underpinning the solicitors’ profession.

It is clear from its Enforcement Strategy that the SRA considers a breach of Principle 4 to be a
very serious matter:

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 Conduct or behaviour which demonstrates a lack of honesty or integrity are at the highest end of the
spectrum, in a ‘profession whose reputation depends on trust.’ ... The most serious involves proven
dishonesty.

Finding of dishonesty = most severe disciplinary action. —> such sanctions will always be justified by the
need to preserve the good reputation of the profession.

Bolton v Law Society - Sir Thomas Bingham MR referred to ‘the need to maintain among members of the
public a well-founded confidence that any solicitor whom they instruct will be a person of unquestionable
integrity, probity and trustworthiness’.

Principle applicable also to life outside practice.

 Ie. a solicitor convicted of theft will be in breach of Principle 4 and likely to be struck off
 A solicitor convicted of a criminal offence involving dishonesty will, by definition, be in breach of
Principle 4.

NB. A finding of dishonesty is not dependent on a conviction or on criminal behavior.

Bultitude v Law Society [2004]: The court held that proof of dishonesty did not depend on proving an
intention permanently to deprive. The solicitor had signed a cheque transferring client funds to the firm’s
business, without knowing or caring whether his firm was entitled to be paid those funds. That satisfied the
relevant test for dishonesty. The solicitor was struck off.

Ivey v Genting Casinos (UK) Ltd t/a Crockfords [2017]: SC held that when dishonesty is in question, the
fact-finding tribunal has first to ascertain the actual state of the individual’s knowledge or belief as to the
facts.
In determining whether a solicitor’s conduct is dishonest, the SRA adopts a two-stage test:

1. What was the solicitor’s genuine knowledge or belief as to the facts at the time?

There is no requirement for the belief to have been objectively reasonable. However, reasonableness or how
other solicitors may have acted can be an indicator of whether the belief was genuine.

2. In view of the solicitor’s knowledge or belief at the time, was their conduct dishonest by the standards
of ordinary decent people?

This is an objective test. There is no requirement that the solicitor knew or understood that their behaviour
was dishonest.

The SRA has provided the following non-exhaustive list of examples of breaches of Principle 4:
 taking or using someone else’s money without their knowledge or agreement,
 lying to, or misleading someone, such as telling a client that their case is going well when it has
failed,
 knowingly bringing a false case to a court,
 helping other people to act improperly, such as by giving credibility to a dubious or suspicious
investment scheme run by others,
 giving false information to the firm’s insurer,
 misleading a court, tribunal, or regulator,
 lying on a CV and misleading partners in the firm,
 backdating or creating false documents.

Integrity:

Principle 5 - will apply to all professional dealings with clients, the court, other lawyers and the public.

Overlap with Principle 4 in terms of breaches - but two distinct concepts: integrity is wider in scope.

Wingate and another v SRA and Malins v SRA [2018]:

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In Wingate the solicitor was involved in obtaining a loan for the express purpose
of funding litigation. In fact, the loan was used, inter alia, to repay the firm’s debts. Ultimately the firm could
not repay the loan in full. It was accepted that the solicitor had not acted dishonestly, but was found to have
acted without integrity.

In Malin the solicitor had created and backdated a false letter in order to be able to recover an insurance fee
under a costs order. The solicitor was found to have acted dishonestly.

CA considered the distinction between honesty and integrity. According to Lord Justice Jackson:
 Integrity: used to express the higher standards which society expects from professional persons and
which the professions expect from their own members.
o Connotes adherence to the ethical standards of one’s own profession. That requires more than
mere honesty.

The SRA approaches allegations of a lack of integrity on a case-by-case basis, taking account of the individual
facts.

The SRA has provided the following non-exhaustive list of examples of situations which breach Principle 5:
 displaying a wilful or reckless disregard of standards, rules, legal requirements and obligations or
ethics,
 taking unfair advantage of clients or third parties,
 knowingly or recklessly causing harm or distress to another,
 misleading clients or third parties.

Ryan Beckwith v SRA [2020]: court confirmed that Principle 5 is applicable to a solicitor’s private life where
the conduct touches realistically on the individual’s practice of the profession and in a way that is
demonstrably relevant.
 The closer the behaviour is to the solicitor’s professional activities, workplace or relationships, and/or
the more it reflects how the solicitor might behave in a professional context, the more seriously it will
be regarded by the SRA.

Examples of breach occurring outside practice: sexual misconduct, bullying and making
offensive/discriminatory remarks on social media in a personal capacity.

Equality, diversity and inclusion:

Principle 6 - solicitors must comply with all anti-discrimination legislation, including the Equality Act 2010.

Should a firm refuse to act for a client on the basis of ethnicity or sexual orientation, or fail to make
reasonable adjustments to enable disabled clients to access its offices, this would amount to unlawful
discrimination.

Also: wider duty not to discriminate in their professional dealings.

Paragraph 1.1 provides that a solicitor must not unfairly discriminate by allowing their personal views to
affect their professional relationships and the way in which they provide services.

A finding of unlawful discrimination could also amount to a breach of Principles 1 and 2.

Principle 6 goes beyond a direction not to discriminate. It places a positive requirement on the solicitor to
ensure that their actions encourage equality, diversity and inclusion.

Equality – treating people fairly ensuring equal opportunities and not discriminating because of an
individual’s characteristics;
Diversity – encouraging and valuing people with a broad range of different backgrounds, knowledge,
skills and experiences; understanding and respecting these individual differences;
Inclusion – acceptance and encouraging everyone to participate and contribute.

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A firm must ensure that its recruitment process, advertising, HR policies etc encourage equality, diversity and
inclusion.
It must treat their employees fairly, create an inclusive workplace environment and have systems and
procedures in place to address issues - NB. SRA Guidance – Workplace environment: risks of failing to
protect and support colleagues.

Treating people fairly, with dignity and respect, is part and parcel of upholding the reputation of the
profession. The Principle also extends to a solicitor’s conduct outside practice.
 Ie. E pressing racist views on social media is a breach of Principle 6.

Best Interests of the Client:

Principle 7 - derives from the common law in that it reflects the fact that a solicitor is said to
be in a fiduciary position in relation to a client.

Ensuring that clients are provided with a proper standard of service in terms of client care, competence and
standard of work is also encompassed by this Principle.

Ie. if a client is seeking advice on a subject which is beyond the solicitor’s area of expertise, the solicitor
would be unable to act in the best interests of the client. —> best interest: refer client to an expert in the
relevant field of law.

Equally, a solicitor must consider their capacity (in terms of work volume) to take on a particular matter.

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Chapter 3 - Obtaining Instructions:

General Principles:

Marketing has become an increasingly important function within firms with individual solicitors being
expected to play their part in promoting the firm and its services.

No matter how urgent these financial pressures may be, a solicitor must at all times comply with the
requirements of professional conduct, and in particular with the SRA Principles. Relevant ones are:
 Principle 3: maintaining independence
 Principle 7: acting in the client’s best interests.

For example, a firm may be offered a large financial incentive to refer all clients requiring advice on financial
services to a particular firm of brokers. However, the firm must not accept this offer if it would prevent
solicitors acting in the best interests of their clients.

Advertising:

One of the best ways of attracting clients is by personal recommendation of a friend or colleague who has
experienced similar problems.
There are also publications, such as the Legal 500, which list the names of the ‘top’ solicitors in a particular
legal field and geographical location.

However, in recent times firms have invested substantial sums of money with a view to attracting new clients
through different means. —> advertising on newspapers, websites, social media etc.

Solicitors are generally free to publicise their practice provided they comply with both the general law and the
requirements of professional conduct.

General Law:

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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.

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,

Processing includes collecting, recording, organising, storing and disclosing such information, whether by
automated or manual methods.

A data processor and a data controller must comply with all six principles set out in the GDPR (eg personal
data must be accurate and, where necessary, kept up to date)

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 (ie see their data and have the data
erased).

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).

Professional conduct requirements:

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).

‘Publicity’: 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 etc (SRA Glossary).

It does not, however, include press releases prepared on behalf of a client.

—> SRA Transparency Rules:

Aim: making sure that consumers of legal services have the information they need to make an informed
choice of legal services provider.

The Rules require all firms regulated by the SRA to publish certain information about the costs of those
services specified in the Rules. 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.

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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.

—> Unsolicited approaches:

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.

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 - in person, by phone or other means.
 Newspaper and TV adv are not caught by Paragraph 8.9

Exception in respect of current or former clients in order to advertise legal services provided by the firm
or solicitor —> 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.

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.

—> Letterheads, websites and emails:

Paragraph 5.4: 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 8.10: 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.

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’.

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’.

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—> Social media:

No specific provisions in the Code of Conduct that apply to the use of social media by solicitors, but regard
must still be had to the Principles and the relevant standards in the Code when using social media as a
marketing tool.

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.

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.

Any such arrangement must comply with the SRA Principles and the relevant paragraphs of the Code of
Conduct for Solicitors.

Paragraph 1.2: As the relationship between a solicitor and the client should be built on trust, it follows that
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 5.1(a): 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’.

Paragraph 5.1(e): 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.

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 (Paragraph 5.1(a)).

Paragraph 5.1 (d): 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.

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

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.

Example:

Peri is a solicitor. Peri is contacted by Monks and Co., a well-established local firm of independent
financial advisers. Monks and Co. proposes entering into an agreement whereby Peri refers to it all of
her clients seeking advice about insurance products. In return, Monks and Co. will pay Peri a small
commission for each client referred.

Can Peri accept this proposition?

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 Peri would be able to enter into such an agreement so long as she is satisfied that in referring clients to
Monks and Co. she is acting with independence (Principle 3), so
that, for example, Peri did not feel that her freedom to refer clients to other providers
of financial advice is then restricted. In making the referrals, Peri must also be acting in the best
interests of each client (Principle 7). Clients must be informed of the commission arrangement with
Monks and Co. (para 5.1(a)). (Peri would also need to account properly to the client for any financial
benefit (the commission) she receives as a result of that client’s instructions (para 4.1).

Referral fees:

Referral fees are 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.

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.

‘Referral fee’: 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.

Separate businesses:

A separate business 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).

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

Examples of the kinds of services that a separate business offered are alternative dispute resolution, financial
services and an estate agency.

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.

Paragraph 5.3: 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.

————

Chapter 4: the Retainer

The contract between a solicitor and the client is often referred to as a ‘retainer’. As with any other contract,
the relationship between the solicitor and the client is governed by the general law. However, in addition to
considering the general law, a solicitor must also comply with obligations placed upon them by the
requirements of professional conduct.

Accepting instructions:

Terms of the retainer:

15
Many of the terms of the retainer will be implied into the contract either by the law, or by the requirements of
professional conduct.
The solicitor must ensure that the more basic terms of the retainer are understood by the client.

One critical issue is to ensure that the client understands exactly what work the solicitor has agreed to
undertake.
It is important that a client’s expectations are managed at an early stage of the solicitor–client relationship.

Identity of the client:

Paragraph 8.1: A solicitor must identify whom they are acting for in relation to any matter.
A solicitor owes many duties to the client, and the solicitor can only ensure that these duties are met if they
know the identity of the client.

The primary purpose behind Paragraph 8.1 is to try to prevent solicitors inadvertently becoming involved in
fraud.

P&P Property Ltd v Owen White & Catlin LLP and Another; Dreamvar (UK) Ltd v Mishcon De Reya
and Another [2018]:
 In both cases, a fraudulent seller had purported to sell a high-value London property to an innocent
buyer. In fact, the fraudsters did not own the properties, but this was not discovered until after the
purchase monies had been handed over.
 The Court of Appeal held that, although there was no negligence on the part of the buyers’ solicitors,
they were liable for the losses suffered by their buyer clients.
 This was on the basis that the buyers’ solicitors had received the money from their clients on trust to
use for a genuine completion. As there had not, in fact, been a genuine completion, the buyers’
solicitors were in breach of trust.
 The Court held that the seller’s solicitor was not liable in tort to the buyer or their solicitor, as it had
no general duty of care to them.

To reduce the risk of inadvertently becoming involved in fraud a solicitor must take steps to establish who
they are dealing with at the outset.
It is for the solicitor to decide what steps are appropriate, but the SRA suggests that a proportionate approach
should be adopted, taking account of such factors as:
 the size of the firm, the number of fee earners, the client profile, the different areas of work the firm
does and the particular risks involved in those areas of work.

A solicitor is also under a separate duty to obtain ‘satisfactory evidence’ of the identity of their clients.
 This obligation is imposed by the Money Laundering, Terrorist Financing and Transfer of Funds
(Information on the Payer) Regulations 2017 (SI 2017/692).

Third party instructions:

A solicitor may receive instructions from a third party on behalf of a client.

Alternatively, a solicitor may receive instructions from one client purporting to instruct the solicitor on behalf
of a number of clients.

When considering whether to accept instructions from or on behalf of a number of clients, the solicitor must
also take into account any actual or potential conflicts of interests.

Paragraph 3.1: The Code of Conduct for Solicitors provides that a solicitor only acts for clients on
instructions from the client, or from someone properly authorised to provide instructions on their behalf.

In taking any positive step in court proceedings (such as issuing proceedings) a solicitor warrants that they
have authority to do so. If a solicitor conducts proceedings without that authority, the solicitor will usually be
personally liable for the costs incurred.

Warner v Masefield [2008]:

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A firm of solicitors issued proceedings on behalf of two trustees. In fact, the firm had only been instructed by
one trustee and that trustee had no authority to give instructions on behalf of the other. The court held that in
accepting instructions from only one trustee the firm had breached the version of the Code of Conduct then in
force and that the firm was in breach of its implied authority to act. The firm was ordered to pay the costs of
the other parties involved.

Refusal of instructions to act:

Generally, like any other business, a solicitor is free to decide whether to accept or decline instructions to act
for a particular client. However, this discretion is limited.

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

A solicitor would therefore be in breach of the Code of Conduct for Solicitors if, by refusing to accept a
client’s instructions, it could be shown that the solicitor was unfairly discriminating against that client
because of, for example, the client’s race or gender.

Duress or undue influence and vulnerable clients:

Paragraph 3.1: 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.

 Ie. When instructions are affected by duress or undue influence —> necessary for the solicitor to take
appropriate steps to satisfy themselves that the instructions represent the client’s genuine wishes.
 If not satisfied: solicitor should decline to act.

Alternatively, in circumstances in which the solicitor has concerns that the client is under duress, the solicitor
may seek assistance from the High Court to provide its protection under its inherent jurisdiction.

Paragraph 3.1: In circumstances where the solicitor has legal authority to act for a client notwithstanding that
it is not possible to obtain or ascertain the instructions of the client, then the solicitor is subject to the
overriding obligation to protect the client’s best interests.

Where there is no actual evidence of undue influence but the client insists on acting in a way which appears to
be to their disadvantage, it would be advisable to explain the consequences of the instructions and ask the
client whether he or she wishes to proceed, and for this advice and consent to be documented.

Duty to act in the client’s best interests:

Principle 7: Act in best interests of the client.

Accordingly, a solicitor must not accept instructions in circumstances where the solicitor will be unable to
meet this fundamental requirement.
 Where there is an own interest conflict or a conflict of interest
 Or where the solicitor holds ‘material’ confindential information for an an existing or former client
which would be relevant to a new instruction.

Paragraphs 3.2 and 3.4: A solicitor must ensure that the service provided to clients is competent and
delivered in a timely manner and must consider and take account of the client’s attributes, needs and
circumstances.

Quality of service: if the solicitor lacks the time, resources or expertise to deal with the client’s matter
then it would not be in that client’s best interests for the solicitor to accept the instruction.

Gifts from clients:

17
Typically, the solicitor may be asked to draft a will for a client which includes a significant gift to the
solicitor.

There are no specific references in the Code of Conduct for Solicitors to this type of situation. However, the
Law Society has issued a practice note which offers some guidance. It advises that 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.

Paragraph 6.1: Drafting a will which includes a significant gift to the solicitor gives rise to the potential for
an own interest conflict.

In its Guidance: Drafting and Preparation of Wills, the SRA says that usually the effect of Paragraph 6.1 will
be to prevent the solicitor acting unless the client agrees to take independent legal advice on making the gift.

Exceptions - example: where the solicitor is drafting wills for the solicitor’s own parents and the
survivor of them wishes to leave the residuary estate to the solicitor and their siblings in equal shares.

Compliance with the law and Code of Conduct:

Principle 1: a solicitor must act in a way that upholds the constitutional principle of the rule of law, and the
proper administration of justice.

If the acceptance of the instructions would place the solicitor in breach of the Code of Conduct for Solicitors,
the solicitor must refuse to act. Examples of instructions which would not comply with the Code are where:
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.

Paragraph 7.2: 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.

Duties to the client during the retainer:

These duties are prescribed by the common law and the requirements of professional conduct.

Duty of reasonable care and skill:

Duty of care in common law +

s 13 Supply of Goods and Services Act 1982 provides that a supplier of services will carry out those services
with reasonable care and skill —> implied into retainer —> liability for breach of contract

However, this implied term does not apply to advocacy services provided before a court, tribunal,
inquiry or arbitrator (Supply of Services (Exclusion of Implied Terms) Order 1982 (SI 1982/1771), art
2).

Nevertheless, the solicitor may be sued for negligence in both contentious and non-contentious proceedings
—> Accordingly, a solicitor who acts as an advocate may be sued in the tort of negligence if the solicitor
breaches their duty of care to the client within court proceedings.

Duty to act in the client’s best interests:

18
This is also a duty placed on a solicitor at common law —> solicitor–client relationship is said to be a
‘fiduciary relationship’.

A fiduciary relationship is one where one party must act in the best interests of the other party.

Duty to account: Where such a relationship exists, one party may not make a secret profit at the
expense of the other party —> duty to account the profit for the client (mirorred by Para 4.1).

Paragraph 4.2: A solicitor is also under more general obligations to safeguard money and assets entrusted to
the solicitor by clients (and others).

Paragraph 4.3: obligation not to hold client money unless working in an authorised body.

There is a presumption of undue influence where a fiduciary duty exists. In any dealings between a solicitor
and the client, there will be a rebuttable presumption that the solicitor has exercised undue influence in
persuading the client to enter into that dealing.

Rebut prescient by showing influence was not exercised. For example:

 by making a full disclosure of all relevant facts, ensuring that the client took independent legal advice
and understood the transaction, and ensuring that all dealings were fair and at arm’s length.

Duty not to take advantage of the client:

This is reflected in Principle 5, which provides that a solicitor must act with integrity, and in Paragraph 1.2:
‘You [must] not abuse your position by taking unfair advantage of clients or others.’

Confidentiality:

A solicitor has a duty to keep the affairs of the client confidential. This duty continues even after the retainer
has been terminated.

Disclosure:

A solicitor owes the client a duty to disclose all relevant information to the client, regardless of the source of
this information.

Client care and costs:

A solicitor is obliged to provide information on costs (at the time of engagement and, when appropriate, as the
client’s matter progresses) and other information to enable the client to make informed decisions.

The client’s authority:

A solicitor may derive authority from the retainer to bind the client in certain circumstances. This authority
can be limited expressly by the client in the terms of the retainer.

Safer: Express instructions should always be taken from the client prior to the solicitor taking any step in the
proceedings or matter.

Termination of the retainer:

The retainer may be terminated by either party, or by the general law.

—> Termination by the client:

A client may terminate the retainer at any time for any reason.

19
However, the 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.

—> Termination by the solicitor:

Paragraph 7.2: a solicitor must consider whether the solicitor will be able to justify a decision to terminate
the retainer having regard to their obligations under the SRA’s regulatory arrangements.

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).

—> Termination by law:

The retainer will be terminated automatically by law in certain circumstances. Ie.:

 where the solicitor is declared bankrupt or
 either party loses mental capacity after the retainer has commenced.

Where the solicitor does not practise as a sole practitioner, being declared bankrupt or losing mental capacity
will have little practical effect, as one of the solicitor’s partners or other colleagues will take over the client’s
matter.

Where the client loses mental capacity, the solicitor should have regard to the Mental Capacity Act 2005 and
its accompanying Code.

Responsibilities on termination:

As a matter of good practice, a solicitor should confirm to the client in writing that the retainer has been
terminated, explain, where appropriate, the client’s possible options for pursuing the matter and take steps to
deal with any property of the client which may be held by the solicitor.

The solicitor will also have to deal with the client’s paperwork. Where the client’s matter is ongoing and the
client has instructed another firm of solicitors, it may be advisable to retain a copy of the file.

The solicitor should also consider the client’s rights and the solicitor’s obligations under the Data Protection
Act 2018.

The Act requires that any personal data in those files are retained only for the purpose for which they were
collected, although this will not prevent the solicitor from retaining a copy of the file in order to defend
themselves from any future claims of negligence.

Liens:

A lien is a legal right that allows a creditor to retain a debtor’s property until payment.

A solicitor may hold on to property already in their possession, such as a client’s papers, until the solicitor’s
proper fees are paid.

A solicitor may accept an undertaking to pay the costs instead of the solicitor retaining the client’s
papers under a lien.

The court has the power under s 68 Solicitors Act 1974 to order the solicitor to deliver up any papers to the
client. SRA has a similar power.

20
Alternatively, a solicitor may apply to court under s 73 Solicitors Act 1974 for a charging order over any
personal property of the client recovered or preserved by the solicitor within litigation proceedings

—————

Chapter 5: Client Care and Costs

Acting in the best interests of the client (Principle 7) includes providing a proper standard of service. More
generally, the Code provides that a solicitor must not abuse their position by taking advantage of clients
(Paragraph 1.2) or mislead or attempt to mislead a client either by their own acts or omissions or allowing or
being complicit in the acts or omissions of others (Paragraph 1.4).

Different types of legal services providers will have in place differing client care systems.

The Code makes clear that a solicitor must exercise their own judgment in applying the standards, bearing in
mind the solicitor’s areas of practice and the nature of the solicitor’s clients.

Making informed decisions:

Paragraph 8.6: 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.

Ie. Appropriate to discuss whether the potential outcomes of the client’s matter are likely to justify the
expense or risk involved, including any risk of having to pay someone else’s legal fees.

Level of service:

The service provided by a solicitor must be competent and delivered in a timely manner (Paragraph 3.2).

A solicitor must maintain their competence to carry out their role and keep their professional knowledge and
skills up to date (Paragraph 3.3).

In seeking to achieve a competent level of service, the solicitor must consider and take account of the client’s
attributes, needs and circumstances (Paragraph 3.4).

Responsibilities:

Both the solicitor and client will have their own responsibilities during the conduct of the client’s matter, and
so it is good practice to ensure that these responsibilities are explained and agreed with the client at the outset
and prudent to have a written record of this.

Ie. one of the responsibilities of the solicitor could be to keep the client informed of progress and seek
the client’s instructions where required.
The solicitor will also expect the client to keep the solicitor updated as the matter progresses and
inform the solicitor of anything that occurs which may materially affect the matter

Where a client has been referred to the solicitor by a third party and/or because of the way the client’s matter
is funded, there may be conditions placed on how the solicitor may act for the client.

Ie. a client may be referred to a solicitor by the client’s insurer. Under the terms of acting, the solicitor
may not be able to issue proceedings without the authority of the insurer (who will be funding any such
action).
—> any limitations and conditions on what the solicitor can do for the client must be explained at the
outset

Competence and supervision:

21
Paragraph 3.3: Code of Conduct for Solicitors provides that a solicitor must maintain their competence to
carry out their role and keep their professional knowledge and skills up to date.

Paragraph 3.6: The solicitor must ensure that those they supervise or manage do so too + that they have an
understanding of their legal, ethical and regulatory obligations.

Paragraph 3.5: The Code also makes it clear that a solicitor, when supervising or managing others providing
legal services, remains accountable for the work carried out through them and must effectively supervise work
they do for clients.

Information and regulation:

A solicitor must ensure that clients understand whether and how the services being provided are regulated.

Paragraph 8.10: This includes the solicitor explaining which activities will be carried out by the solicitor as
an ‘authorised person’ (defined in the SRA Glossary as a person who is authorised by the SRA or another
approved regulator to carry out a legal activity as set out in s 12 of the Legal Services Act 2007) and ensuring
that the solicitor does not represent any business or employer which is not authorised by the SRA as being
regulated by the SRA.

Paragraph 8.11: There is also an obligation to ensure that clients understand the regulatory protections
available to them.

Ie. entitlement to the protection of the SRA Compensation Fund.

For solicitors, the regulator will be the SRA and, in some circumstances, the Financial Conduct Authority.

Information about costs:

The client must be given the best possible information as to the overall costs of the matter if the client is to be
able to make an informed decision about whether they want to proceed.

Best possibile information:

Paragraph 8.7: A solicitor is obliged to provide clients with the best possible information about how their
matter will be priced and about the likely overall cost of a matter and any costs incurred.

The term ‘costs’ is defined in the SRA Glossary as meaning the solicitor’s fees and disbursements.

Reynolds v Stone Rowe Brewer [2008]: At the outset the solicitor said that the costs of taking the matter to
trial would be £10,000 to £18,000. A few months later, the solicitor said that their revised estimate was now
£30,000.
 The court found that the revised estimate was an attempt to correct an underestimate and was not
justified by any change in the facts.
 The court held that the firm was bound by the original estimate.

A lack of clarity about costs is one of the most common causes of complaints to the Legal Ombudsman.

The intention is for a solicitor to exercise their own judgment in applying the standards, taking into account
their areas of practice and the nature of their clients.
As a matter of good practice, however, the solicitor should clearly explain how fees are calculated and if and
when they are likely to change.
Warning the client about any other payments for which the client may be responsible is also essential.

If a precise figure is not possible, it will often be prudent for the solicitor to explain why the precise figure
cannot be given and agree either:
a. a ceiling figure, above which the solicitor’s costs cannot go, without the client’s permission; or
b. a review date when the parties will revisit the costs position.

22
The solicitor must not forget expressly to include VAT in any hourly rate or quote
 If the solicitor fails to quote with VAT, the price the client pays will be deemed to include VAT.

In seeking to provide clients with a competent service, the solicitor should discuss how the client will pay for
the legal services, including whether costs will be wholly or partly covered by someone else.
Consideration should also be given, where appropriate, as to whether the client may be eligible for legal aid
and, if so, how this would operate.
 The SRA Transparency Rules impose additional obligations.

Costs issues in litigation:

Competent level of service includes discussing whether the potential outcomes of the matter are likely to
justify the expense or risk involved. - ie. risk of having to pay someone else’s legal fees and whether these
costs might be covered by legal expenses insurance.
 Where the solicitor wishes to charge the client for any such excess, the solicitor must have entered
into a written agreement with the client to that effect (see Civil Procedure Rules, r 48.8(1A)).

The client will also remain liable to pay their solicitor’s costs where the losing party is unable to meet the
costs order.

Client care letter:

There is a good deal of client care information which will need to be communicated to the client at the start
of the matter.
Traditionally this has been done in the form of a letter sent out to the client after the first interview, known as
the ‘client care letter’.

Although not a specific requirement under the Code of Conduct for Solicitors, most solicitors continue to
provide the client care information and the terms of the firm’s retainer in the form of a letter.

The solicitor must keep in mind the requirement to give clients information in a way they can understand
(Paragraph 8.6).

Consumer Contracts Regulations 2013:

Solicitors need to ensure that they comply with the Consumer Contracts (Information, Cancellation and
Additional Charges) Regulations 2013 (SI 2013/3134).
 Apply to a wide range of contracts between client and solicitor, including a contract to carry out legal
work for a client.

Regulations distinguish between:

 On-premises contracts: concluded between a solicitor and the client at the solicitor’s place of
business.
 Off-premises contracts: ie. where a solicitor visits a client at home and the client offers to engage the
solicitor to carry out legal work.

Regulations specify that certain pieces of information must be provided to clients before they enter into the
contract. - usually in a client care letter.
 The information required varies depending on the type of contract.
o Off-premises contracts: client must additionally be informed that they have the right to cancel
it without giving any reason or incurring any liability during the cancellation period (which in
most cases is 14 days beginning on the date after the contract is entered into).
o Failure to do so is an offence under the Regulations

Legal aid contracts do not fall within the Regulations.

Fees and costs:

23
The fees and charges the solicitor will levy for acting for the client will be agreed between the parties at the
start of the retainer.
Restrictions are placed upon the fees a solicitor may charge, and also upon how the solicitor will be
remunerated - summary:
 Contentious business: ‘business done, whether as a solicitor or an advocate, in or for the purposes of
proceedings begun before a court or an arbitrator, not being business which falls within the definition
of non-contentious business or common form probate business’ (Solicitors Act 1974, s 87).
o contentious business starts only once proceedings have been issued.
 Non-contentious business: ‘any business done as a solicitor which is not contentious business’
(Solicitors Act 1974, s 87).
o Ie. conveyancing or commercial drafting work.
o Also includes all proceedings before tribunals, except the Lands Tribunal and the
Employment Appeals Tribunal.
o Governed by the Solicitors’ (Non-Contentious Business) Remuneration Order 2009 (SI
2009/1931).

Options available for solicitors’ fees:

A solicitor may agree to charge a client for work done on a number of different bases.
Whatever the method, the overall amount of the charge will be regulated by statute and so the client may be
able to challenge the bill at a later date.

 Hourly rate: the client is charged for the time spent on the file.
o The client is informed at the start of the matter which fee earner will be working on the
client’s files, and the fee earner’s respective charge-out rates
o To comply with Paragraph 8.7, it is unlikely that merely giving an hourly rate will be
sufficient.
 Fixed fee: complete the work for a fixed fee, or a fixed fee plus VAT and disbursements.
o often used for conveyancing transactions
o If the solicitor agrees to act in return for a fixed fee, this fee cannot be altered at a later date
(unless the client agrees)
 Variable fees: permitted, in certain circumstances, to charge a fee which varies according to the
outcome of the matter.
o Ie. Contingent fee
o NB. A solicitor must bear in mind the obligation to take account of the client’s needs and
circumstances (Paragraph 3.4) when entering into fee agreements and to ensure any
agreement is legal.
o Agreements permitted by law:
 Conditional fee agreements (CFAs):
 Ie. ‘no win, no fee’ basis of charging
 Usually solicitors charges nothing if the client loses, but will charge their fees
plus an agreed ‘uplift’ (or ‘success fee’, for example an extra 20%) in the
event of success.
 A solicitor may enter into (and enforce) a CFA if it complies with s 58 Courts
and Legal Services Act 1990;
 Ie. must be in writing, signed by both the solicitor and the client, and,
where a success fee is to be paid, specify the percentage of the
success fee.
 The success fee cannot exceed a percentage specified by the Lord
Chancellor (currently 100% uplift in the normal hourly charge rate,
with the exception of personal injury cases where the cap is 25% of
general damages recovered).
 Losing client will not pay a solicitor’s fee, but will usually have to pay
disbursements such as court fees, barristers’ fees and VAT + opponent’s
costs.
 After-the-event insurance cover: Explore whether client can obtain
insurance to cover these costs in the event of losing the case
24
  Before-the-event insurance cover: client has prior insurance which
covers costs
 A solicitor cannot enter into a CFA for any criminal work or family
proceedings.
 CFAs must also comply with additional requirements from the Consumer
Contracts Regulations 2013.

 Damages-based agreements (DBAs):

 defined by s 58AA(3)(a) Courts and Legal Services Act 1990 and covered by the Damages-
Based Agreements Regulations 2013 (SI 2013/609) —> if the client recovers damages, the
solicitor’s fee is an agreed percentage of those damages.
 Cannot be equal or above, including VAT, to 50% of sums recovered by client.
 Cap of 25% on personal injury cases
 Insurance considerations same as with CFAs.

 SRA Transparency Rules: in relation to specified services, costs information required to be
published includes the circumstances in which clients may have to make any payments
themselves for the services provided by the solicitor (including from any damages) if CFAs or
DBAs are used.

 Other methods:
o A solicitor may agree to be remunerated by some other means.
o Ie. solicitor agreeing to accept shares in a new company in return for the work, rather than
costs.
o NB. the client should be advised to seek independent advice about such a costs agreement.

Money on account:

Common to require a client to pay a sum of money to the solicitor at the start of the transaction on account of
the costs and disbursements that will be incurred.

In contentious business, a solicitor may require a client to pay a reasonable sum to the solicitor on account of
costs. If the client does not pay this money within a reasonable time, the solicitor may terminate the retainer
(Solicitors Act 1974, s 65(2)).

There is no such statutory right in non-contentious business —> where the solicitor requires money on
account before starting a matter, the solicitor should make this a requirement of the retainer.

The solicitor’s bill:

For a solicitor to be able to obtain payment from the client, certain formalities need to be complied with in
respect of the solicitor’s bill. These matters include (but are not limited to) the following:
a. The bill must contain enough information for the client to be satisfied that the bill is reasonable, and
also provide details of the period to which the bill relates.
b. The bill must be signed by the solicitor or on the solicitor’s behalf by an employee authorised to do
so. Alternatively, the solicitor/authorised employee may sign a covering letter which refers to the bill
(Solicitors Act 1974, s 69(2A)).
c. The bill must be delivered by hand to the client, by post to the client’s home, business address or last
known address, or by email if the client has agreed to this method and provided an appropriate email
address (Solicitors Act 1974, s 69(2C)).

Interim bills:

A solicitor may wish to bill the client for work done on the client’s file before the matter has completed —>
interim bills throughout the matter.

Two types:
 Interim ‘statute bills’: they comply with the provisions of the Solicitors Act 1974.

25
 o self-contained final bills in respect of the work covered by them
o The solicitor may sue the client for non-payment of such bills and the client may apply to
have them assessed by the court.
o Rare - may arise during retainer only in two ways:
 there is authority for issuing such bills in a ‘natural break’ in lengthy proceedings,
but there is little authority as to what will actually amount to a natural break - only in
clearest cases;
 by agreement with the client, and the Law Society recommends that this right should
be expressly reserved within the retainer.
 solicitor must specify the time-limit within which the client must pay the
interim bill, and must also expressly reserve the right to terminate the retainer
in the event of non-payment.

 ‘Bill on account’: such bills are effectively requests for payments on account of the final bill;
o it does not need to represent the final figure for costs in respect of the work covered by it
o Unlike with an interim statute bill, a solicitor is unable to sue the client for non-payment of
such a bill, and the client cannot apply to have the bill assessed.
o If client does not pay: right to terminate retainer under s 65(2) Solicitors Act 1974.
o In the event that the client regards the amount of the bill as excessive, the client can request
that the solicitor issues a statute bill which the client may then apply to have assessed by the
court.

Interest on bill:

In a non-contentious matter a solicitor may charge interest on the whole or the outstanding part of an unpaid
bill with effect from one month after delivery of the bill, provided that the client has been given notice of their
right to challenge the bill.
 Interest rate must not exceed that which is payable on judgement debts - currently 8%.

In contentious business, the Law Society’s guidance provides that a solicitor may charge interest on an
unpaid bill where the solicitor expressly reserves this right in the retainer, or the client later agrees for a
‘contractual consideration’ to pay interest.
 where a solicitor sues the client for non-payment of fees, the court has the power to award the solicitor
interest on the debt under s 35A of the Senior Courts Act 1981 or s 69 of the County Courts Act 1984.
 The rate of interest will be the rate payable for judgment debts unless the solicitor and client expressly
agree a different rate.

Enforcement:

Subject to certain exceptions, a solicitor may not commence any claim to recover any costs until one month
has passed since the solicitor delivered their bill (Solicitors Act 1974, s 69).

The High Court has the power under s 69 to allow the solicitor to commence such a claim against the client
where the court is satisfied that the client is about to leave the country, be declared bankrupt, or do anything
else which would prevent or delay the solicitor obtaining their fees.

The client’s right to challenge the bill:

The client may challenge the amount of a solicitor’s bill, provided that the client complies with certain
requirements, which vary depending on the method of challenge.

(1) Assessment by the court:

A client may apply to have the bill assessed by the court in both contentious and non- contentious
proceedings.
Referred to as the bill being ‘taxed’.

The client must apply to have the bill assessed within one month from the date of delivery.
26
The client may still apply within 12 months of delivery, but will require the leave of the court for the bill to be
assessed (Solicitors Act 1974, s 70).

The costs will be assessed by a judge or district judge sitting as a ‘costs officer’.

The costs will (with certain exceptions) be assessed on an ‘indemnity basis’:

 The court will allow only costs that have been reasonably incurred by the solicitor and which are
reasonable in amount.
 Any doubt as to what is to be considered reasonable is resolved in favour of the solicitor.
 The client may be ordered to pay the costs of the solicitor arising from the assessment process.

—> Non-contentious proceedings:

In deciding what is reasonable, the court must have regard to the following circumstances (Solicitors’ (Non-
Contentious Business) Remuneration Order 2009):
a. the complexity of the matter, or the difficulty or novelty of the questions raised;
b. the skill, labour, specialised knowledge and responsibility involved;
c. the time spent on the business;
d. the number and importance of the documents prepared or considered, without regard to length;
e. the place where and the circumstances in which the business or any part thereof is transacted;
f. the amount or value of any money or property involved;
g. whether any land involved is registered;
h. the importance of the matter to the client; and
i. the approval (express or implied) of the entitled person, or the express approval of the testator, to:
a. the solicitor undertaking all or any part of the work giving rise to the costs, or
b. the amount of the costs.

—> Contentious proceedings:

The factors the court must take into account when considering whether costs are reasonable are set out in r
44.5 Civil Procedure Rules. These include (but are not limited to):
a. the conduct of the parties;
b. the amount or value of any money or property involved;
c. the importance of the matter to the parties;
d. the particular complexity of the matter, or the difficulty or novelty of the questions raised;
e. the skill, effort, specialised knowledge and responsibility involved;
f. the time spent on the case; and
g. the place where and the circumstances in which work, or any part of it, was done.

Subject to certain exceptions, a client cannot apply for an assessment of costs where the solicitor and client
have entered into a contentious business agreement.

(2) Using the firm’s complaints procedure:

Solicitors must ensure that clients are informed in writing at the time of engagement about their right to
complain about the service provided by them and their charges (Paragraph 8.3).

If the client is not satisfied with the firm’s response, the solicitor must inform the client in writing of any right
the client has to complain to the Legal Ombudsman (Paragraph 8.4).

The Legal Ombudsman may then limit the solicitor’s fees.

Non-contentious business agreements:

A non-contentious business agreement in respect of the solicitor’s remuneration for any non-contentious
work.
Under this agreement the solicitor may be remunerated by a gross sum, commission, a percentage, a salary, or
otherwise.

27
To be enforceable, the agreement must comply with s 57 Solicitors Act 1974. For example, the agreement
must:
a. be in writing;
b. be signed by the client;
c. contain all the terms of the agreement (including whether disbursements and VAT are included in the
agreed remuneration).

Where the relevant provisions have been complied with, the client will be unable to apply to have the bill
assessed by the court.
However, the court may set the agreement aside if the amount charged by the solicitor is unfair or
unreasonable.

Contentious business agreements:

A solicitor may enter into a contentious business agreement in respect of their remuneration for contentious
work completed on behalf of the client (Solicitors Act 1974, ss 59–63).

Remuneration can be by reference to a gross sum, an hourly rate, a salary or otherwise.

However, the solicitor may not be remunerated by a contingency fee.

In order to be enforceable, the agreement must comply with certain requirements, including:
a. the agreement must state it is a contentious business agreement;
b. the agreement must be in writing;
c. the agreement must be signed by the client; and
d. the agreement must contain all the terms.

Where the contentious business agreement is enforceable, the client will be unable to apply to court for an
assessment of costs (except where the agreement provides that the solicitor is to be remunerated by reference
to an hourly rate).

The court may set aside the agreement if it is unfair or unreasonable.

Overcharging:

A solicitor must act in the best interests of the client (Principle 7) and act with integrity (Principle 5).
Overcharging for work done would breach both these Principles.

Where a costs officer (when assessing a solicitor’s bill in a non-contentious matter) reduces the amount of the
costs by more than 50%, they must inform the SRA.

Commission:

Solicitor–client relationship = fiduciary relationship - a solicitor must not make a secret profit whilst acting
for the client.

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 (SRA Glossary).

In showing that the solicitor has properly accounted to the client for the financial benefit received, the solicitor
could:
a. pay it to the client; or
b. offset it against fees; or
c. keep it where the client has agreed to this.

This is usually dealt with as part of the client care letter or the terms and conditions otherwise agreed upon in
acting for the client.

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—————
The SRA Principles (including the Introduction).

The SRA Principles comprise the fundamental tenets of ethical behaviour that we expect all those that we
regulate to uphold.

Should the Principles come into conflict, those which safeguard the wider public interest (such as the rule of
law, and public confidence in a trustworthy solicitors' profession and a safe and effective market for regulated
legal services) take precedence over an individual client's interests.

You should, where relevant, inform your client of the circumstances in which your duty to the Court and other
professional obligations will outweigh your duty to them.

Principles and Codes are underpinned by our Enforcement Strategy.

SRA Principles:

You act:

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

————
Paragraphs 1, 3, 4, 5.1 – 5.3, 7.2 and 8 of the SRA Code of Conduct for Solicitors, RELs and RFLs and
the associated definitions in the SRA Glossary (available on the SRA’s website).

The Code of Conduct describes the standards of professionalism that we, the SRA, and the public expect of
individuals (solicitors, registered European lawyers and registered foreign lawyers) authorised by us to
provide legal services.

They apply to conduct and behaviour relating to your practice, and comprise a framework for ethical and
competent practice which applies irrespective of your role or the environment or organisation in which you
work.

Conduct does not need to take place in a workplace in order to relate to your practice – these requirements
capture conduct which touches realistically upon your practice of the profession, in a way that is demonstrably
relevant.

You must exercise your judgement in applying these standards to the situations you are in and deciding on a
course of action, bearing in mind your role and responsibilities, areas of practice, and the nature of your
clients.

29
You are personally accountable for compliance with this Code.

A serious failure to meet our standards or a serious breach of our regulatory requirements may result in our
taking regulatory action against you.

Code of Conduct for Solicitors, RELs and RFLs:

Paragraph 1: Maintaining trust and acting fairly:

1.1 You do not unfairly discriminate by allowing your personal views to affect your professional relationships
and the way in which you provide your services.

1.2 You do not abuse your position by taking unfair advantage of clients or others.

1.3 You perform all undertakings given by you, and do so within an agreed timescale or if no timescale has
been agreed then within a reasonable amount of time.

1.4 You do not mislead or attempt to mislead your clients, the court or others, either by your own acts or
omissions or allowing or being complicit in the acts or omissions of others (including your client).

1.5 You treat colleagues fairly and with respect. You do not bully or harass them or discriminate unfairly
against them. If you are a manager you challenge behaviour that does not meet this standard.

Paragraph 3: Service and competence:

3.1 You only act for clients on instructions from the client, or from someone properly authorised to provide
instructions on their behalf. If you have reason to suspect that the instructions do not represent your client’s
wishes, you do not act unless you have satisfied yourself that they do. However, in circumstances where you
have legal authority to act notwithstanding that it is not possible to obtain or ascertain the instructions of your
client, then you are subject to the overriding obligation to protect your client’s best interests.

3.2 You ensure that the service you provide to clients is competent and delivered in a timely manner.

3.3 You maintain your competence to carry out your role and keep your professional knowledge and skills up
to date.

3.4 You consider and take account of your client’s attributes, needs and circumstances.

3.5 Where you supervise or manage others providing legal services:

a. you remain accountable for the work carried out through them; and

b. you effectively supervise work being done for clients.

3.6 You ensure that the individuals you manage are competent to carry out their role, and keep their
professional knowledge and skills, as well as understanding of their legal, ethical and regulatory obligations,
up to date.

Paragraph 4: Client money and assets:

30
4.1 You properly account to clients for any financial benefit you receive as a result of their instructions,
except where they have agreed otherwise.

4.2 You safeguard money and assets entrusted to you by clients and others.

4.3 You do not personally hold client money save as permitted under regulation 10.2(b)(vii) of the
Authorisation of Individuals Regulations, unless you work in an authorised body, or in an organisation of a
kind prescribed under this rule on any terms that may be prescribed accordingly.

Paragraphs 5.1-5.3: Referrals, introductions and separate businesses:

5.1 In respect of any referral of a client by you to another person, or of any third party who introduces
business to you or with whom you share your fees, you ensure that:

(a) clients are informed of any financial or other interest which you or your business or employer has in
referring the client to another person or which an introducer has in referring the client to you;

(b) are informed of any fee sharing arrangement that is relevant to their matter;

(c) the fee sharing agreement is in writing;

(d) you do not receive payments relating to a referral or make payments to an introducer in respect
of clients who are the subject of criminal proceedings; and

(e) any client referred by an introducer has not been acquired in a way which would breach the SRA's
regulatory arrangements if the person acquiring the client were regulated by the SRA.

5.2 Where it appears to the SRA that you have made or received a referral fee, the payment will be treated as
a referral fee unless you show that the payment was not made as such.

5.3 You only:

(a) refer, recommend or introduce a client to a separate business; or

(b) divide, or allow to be divided, a client’s matter between you and a separate business;

where the client has given informed consent to your doing so.

Paragraph 7: Cooperation and accountability:

7.2 You are able to justify your decisions and actions in order to demonstrate compliance with your
obligations under the SRA’s regulatory arrangements.

Paragraph 8: when you are providing services to the public or a section of the public:

8.1 Client identification: You identify who you are acting for in relation to any matter.

8.2-8.5 Complaints handling

31
 8.2 You ensure that, as appropriate in the circumstances, you either establish and maintain, or
participate in, a procedure for handling complaints in relation to the legal services you provide.

8.3 You ensure that clients are informed in writing at the time of engagement about:

(a) their right to complain to you about your services and your charges;

(b) how a complaint can be made and to whom; and

(c) Any right they have to make a complaint to the Legal Ombudsman and when they can make
such complaint.

8.4 You ensure that when clients have made a complaint to you, if this has not been resolved to the
client’s satisfaction within 8 weeks following the making of a complaint they are informed, in writing:

(a) of any right they have to complain to the Legal Ombudsman, the time frame for doing so and
full details of how to contact the Legal Ombudsman; and

(b) if a complaint has been brought and your complaints procedure has been exhausted:

(i) that you cannot settle the complaint;

(ii) of the name and website address of an alternative dispute resolution (ADR) approved
body which would be competent to deal with the complaint; and

(iii) whether you agree to use the scheme operated by that body.

8.5 You ensure that complaints are dealt with promptly, fairly, and free of charge.

8.6-8.11: Client information and publicity

8.6 You give clients information in a way they can understand. You ensure they 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.

8.7 You ensure that clients receive 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 the matter and any costs incurred.

8.8 You ensure that any publicity in relation to your practice is accurate and not misleading, including
that relating to your charges and the circumstances in which interest is payable by or to clients.

8.9 You do not make unsolicited approaches to members of the public, with the exception of current
or former clients, in order to advertise legal services provided by you, or your business or employer.

8.10 You ensure that clients understand whether and how the services you provide are regulated. This
includes:

32
 (a) explaining which activities will be carried out by you, as an authorised person;

(b) explaining which services provided by you, your business or employer, and any separate
business are regulated by an approved regulator; and

(c) ensuring that you do not represent any business or employer which is not authorised by
the SRA, including any separate business, as being regulated by the SRA.

8.11 You ensure that clients understand the regulatory protections available to them.

————
The following SRA Guidance (available on the SRA’s website):

'Guidance - Client care letters'

All firms have an obligation to provide information about their services at the point of engagement with a
client and as a matter progresses. Information that must be provided includes the likely cost and how to
complain if things go wrong. When they begin working with a client, firms often provide this information in a
client care letter.

It is important that your client care letter is easy to understand.

 One of the most common complaints made to the Legal Ombudsman is about a lack of clarity around
costs.
 Being clear on costs at the outset in your client care letter, and as the matter progresses is a regulatory
obligation.

Also: requirements about providing information under consumer protection law —> Consumer Contracts
(Information, Cancellation and Additional Charges) Regulations 2013.

Check list for improving your client letter:

 Do you explain what is going to happen?

o Clear explanation of the agreed work, next steps and confirmation of what is and isn’t
included in this work
 Do you include how much the work is going to cost?
o Concise and easy to understand cost breakdown and explanation of any potential additional
costs.
 Do you explain when things are going to happen?
o Clear information on the likely timescales for the agreed work.
 Do you explain what the client needs to do?
o Clear explanation of the actions required from the client and where they can get information
if they need it.
 Do you include contact details?
o Details of a named contact and how to get in touch if they have further queries.
 Does your letter show a clear purpose?
o State the purpose of the letter and think about how you can use headings to explain sections or
key information.
 Is your letter concise?
o Breaking information down into bite-size chunks by avoiding lengthy paragraphs and
headings
o Using a short, to the point sentence structure
o Clearly focusing on the information most relevant to that specific client and matter. Generic
information, for example, terms of business and cancellation rights don't always need to be

33
 included in your letter and it may be easier to enclose these separately. You may also consider
using links if emailing or providing information on your website that can be easily accessed.
 Do you use plain English?
o Avoid legal terms and complex language.
 Do you prioritize information?
o adding detail regarding the client's case
o tailoring your information to the client's case
o using personal pronouns
o removing irrelevant information.
 Is your client letter easy to read?
o using a large and clear font size
o avoiding dense paragraphs
o separating out key information, for example, into tables or numbered steps.
 Do you highlight key information?
o bold type for key points and summary boxes
o headers, or other visual tools, such as process diagrams or tables, to emphasise key sections or
important points.
 Have you considered the needs of vulnerable clients?
o use a bigger font
o adapt the information into braille, audio or easy read format
o offer the opportunity to discuss the content by telephone.

——

'Guidance - Unsolicited approaches (advertising) to members of the public'

Is the intention of paragraph 8.9 of the Code for Solicitors, RELs and RFLs to impose a blanket ban on all
advertising by solicitors?

No, advertising to the public is permitted, subject to certain conditions.

Paragraphs 8.9 and 7.1(c) of the Standards and Regulations prohibit unsolicited approaches to members of
the public which, even if permitted by law, may feel unwelcome or intrusive.

What is allowed:

You are allowed to advertise your services to the public so long as this is done in a non-intrusive and non-
targeted way.

Ie. you may place an advert on the radio or TV, on billboards, in a local newspaper, online or on a social
media platform.

Sending leaflets to people's homes is allowed, but only under specific circumstances whereby the distribution
could not be considered to be targeted - cannot selectively distribute leaflets to only specific homes or
individuals based on wider information you know about them.

Example of prohibited advertising:

Firm A identifies from online media a list of people who have recently been involved in a major road traffic
accident. The firm sends them a letter saying that it can help claim compensation.

——

'Guidance - Integrity'

Acting with integrity:

34
A lack of integrity we will make assessments on a case-by-case basis, recognising that each case is different
and turns on its own facts.

Acting with integrity means different things in different situations and contexts, whether in a
practise/professional context or in a private setting outside of legal practice.

Examples of lack of integrity:

 wilful or reckless disregard of standards, rules, legal requirements or ethics, including an

indifference to what the applicable provisions are or to the impacts or consequences of a breach.
 regulated firm or individual has taken unfair advantage of clients or 3rd parties/ has helped or
allowed others to do so.
 regulated firm or individual has knowingly or recklessly caused prejudice, harm or distress to
another.
 clients or third parties have been misled or allowed to be misled (except where this is a result of
simple error that the regulated firm or individual has corrected as soon as becoming aware of it).

The conduct must touch realistically upon the individual's practice of the profession and in a way that is
demonstrably relevant.
—> The closer any behaviour is to the individual’s professional activities, workplace or relationships, and/or
the more it reflects how they might behave in a professional context, the more seriously we are likely to view
it.

Integrity and dishonesty:

Integrity is a much broader concept than dishonesty.

If the circumstances of a case demonstrate dishonesty on the part of a regulated firm or individual then we
will take action for breach of SRA Principle 4.

We might in the alternative plead a lack of integrity, particularly where the allegation of dishonesty is
contested but notwithstanding this, where the conduct would nonetheless comprise a lack of integrity.

Sexual misconduct is an obvious example of behaviour which lacks integrity but often involves no
dishonesty.

Other cases where the SDT have upheld allegations of a lack of integrity outside practice include bullying,
harassing and offensive or discriminatory remarks made on social media by solicitors in a personal capacity.

Examples:
 Creating a ‘sham partnership’ to avoid sole practitioner requirements
 Recklessly but not dishonestly misleading the court
 Putting personal financial interests before those of the client
 Making improper payments out of client account
 Failing to protect clients from mortgage fraund
 Making false representations on behalf of the client
 Accepting a loan from a client
 Behaviour towards a colleague - ie unwanted sexual advances.

Chapter 6: Confidentiality

The requirement of confidentiality:

By the very nature of their work solicitors are privy to all manner of information about their clients.
Whatever the nature of the information, the client is entitled to expect that it will be kept confidential.

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The duty:

Paragraph 6.3: You [must] keep the affairs of current and former clients confidential unless disclosure is
required or permitted by law or the client consents.

The duty of confidentiality applies to all information about a client or matter, regardless of the
source of that information.
Confidentiality attaches to all information provided by the client or a third party in connection with
the retainer.

There will be no duty of confidentiality where the solicitor is being used by the client to perpetrate fraud or
another a crime.

The duty of confidentiality continues after the retainer has been terminated and after the death of the
client whereupon the right to enforce or waive the duty of confidentiality is passed to the client’s (or former
client’s) personal representatives.

Paragraph 6.3 is replicated in the SRA Code of Conduct for Firms.

All members of a firm, including support staff, owe a duty of confidentiality to clients of the firm.
Firms must have in place effective systems to enable risks to client confidentiality to be identified and
managed.

Any breach of the duty of confidentiality will be a breach of professional conduct.

 Solicitor may be disciplined by the SRA or SDT
 Client (or former client) may sue the solicitor for any breach of this duty.

Client consent:

Information which would ordinarily be confidential can be disclosed with the client’s consent.
 A solicitor should only seek such consent when the disclosure is necessary, and in the client’s best
interests.
 Client must understand exactly what information will be disclosed, when and to whom, and the
purpose of the disclosure.

Required or permitted by law:

A solicitor may also disclose confidential information when disclosure is required or permitted by law.
Examples:
a. pursuant to a statutory requirement, eg to His Majesty’s Revenue and Customs in certain
circumstances;
b. pursuant to a statutory duty, such as in the Proceeds of Crime Act 2002 and the Money Laundering,
Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (SI
2017/692) and under the terrorism legislation (see Legal Services);
c. under a court order, or where a police warrant permits the seizure of confidential documentation;
d. in some circumstances where a solicitor is acting for a client under a power of attorney or as a court
appointed deputy;
e. in compliance with a notice served by the Legal Ombudsman under s 147 of the Legal Services Act
2007 requiring the production of information/documentation to facilitate the investigation of a
complaint.

Circumstances which may justify disclosure:

In its Guidance: Confidentiality of Client Information, the SRA gives examples of circumstances which,
although still technically amounting to a breach of the duty of confidentiality, may be taken into account as
mitigation:

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 a. Where a client has indicated their intention to commit suicide or serious self-harm. The SRA
advises that, in the first instance, the solicitor should consider seeking consent from the client to
disclose that information to a third party but, where this is not possible or appropriate, the solicitor
may decide to disclose the information to the relevant person or authority without consent in order to
protect the client or another person.

b. Preventing harm to children or vulnerable adults. This covers situations where the child or adult
indicates that they are suffering sexual or other abuse, or where the client discloses abuse either by
themselves or by another adult against a child or vulnerable adult. Whilst there is no requirement in
law to disclose this information, the solicitor may consider that the threat to the person’s life or health
is sufficiently serious to justify a breach of the duty of confidentiality.

c. Preventing the commission of a criminal offence. At common law, if a solicitor is being used by a
client to perpetrate a fraud or any other crime, the duty of confidentiality does not arise. In other
circumstances, a breach may be mitigated where disclosure is made to the extent that the solicitor
believes it necessary to prevent the client or a third party from committing a criminal act that the
solicitor believes, on reasonable grounds, is likely to result in serious bodily harm.

Duty of disclosure:

When acting for a client on a matter, a solicitor must make the client aware of all information material to the
matter of which the solicitor has knowledge (Paragraph 6.4).

Personal duty: the knowledge of the information in question must be that of the individual solicitor.

Exceptions to the requirement to disclose:

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.

For example, a solicitor acting for one party in a matter may misaddress correspondence destined for their
client to the solicitor acting for the other party. In this case, immediately on becoming aware of the error, the
receiving solicitor must return the papers to the originating solicitor without reading them or otherwise
making use of the information contained therein (Ablitt v Mills & Reeve (1995) The Times, 25 October).

Placing confidential information at risk:

A solicitor must act in the best interests of the client (Principle 7) and so must not place themselves in a
situation where any relevant information could be disclosed to another client.

In order to protect against any accidental disclosure, the Code of Conduct for Solicitors provides that a
solicitor must not act in certain circumstances.

The general prohibition:

Paragraph 6.5 provides that a 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 unless either of the exceptions set out in the Code is met.

—> Material information:

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This term is not further explained in the Code of Conduct for Solicitors, but is likely to encompass
information which is relevant to the client’s matter and of more than inconsequential interest to the client.

Whether the information is ‘material’ relates to the client to whom the duty of disclosure concerning the
information is owed.

—> Adverse interest:

Adversity relates to the relationship between the two respective clients.

The relationship can be said to be adverse where the client to whom the solicitor owes the duty of
confidentiality is, or is likely to become, an opposing party in a matter to the client who is owed the duty of
disclosure.

This would include a situation where the clients litigate against each other, are involved in mediation, or
even if the clients are on opposing sides of a negotiation.

Adversity is said to extend to situations where one client would want to receive the information because it is
potentially of value to them, and whether the other client would want that information to remain confidential.

The exceptions:

 effective measures have been taken which result in there being no real risk of disclosure of the
confidential information; 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.

—> Effective measures:

The measures must protect one client’s confidential information from the other client and their solicitor.

In order to be considered effective the measures must be such as to result in there being ‘no real risk’ of
confidential information being accidentally or inadvertently disclosed.

From a practical point of view, it will be difficult for an individual solicitor to put protective measures in
place. This exception is more likely to be relevant at a firm level taking steps to prevent confidential
information, given by a client to one part of a firm, from being made available to another part of the same
firm.

Effective measures would include:

 Information barriers = practical steps taken to ensure that confidential information cannot pass from
one client to another client.
 Physical separation within the building of those acting for each client, information being encrypted
and password protected.

—> Informed consent:

The client(s) must consent after having understood and considered the risks and rewards involved in the
situation.

The onus is on the solicitor to ensure that the client understands the issues.

Difficulty in obtaining consent: often not possible to disclose sufficient information about the identity and
business of the other client without breaching that other client’s confidentiality.
 For the solicitor to decide in each case

‘Informed consent’ is more likely to be appropriate for ‘sophisticated clients’, such as large companies with
in-house legal advisers or other expertise - more able to assess the risks.

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Confidentiality vs disclosure:

Circumstances in which a solicitor’s duty of confidentiality conflicts with their duty to disclose.
 Typically when a solicitor holds confidential information for a former client which the solicitor would
ordinarily be obliged to disclose to a new client.

Example:
Jacob, a solicitor, is instructed by Sam in the purchase of a derelict plot of land from Lycen Ltd. Sam intends
to build a new house on the land. One of Jacob’s former clients, Amy, sold the land to Lycen Ltd two years
ago at a knock-down price having revealed to Jacob that the land is contaminated. This information would be
material to Sam’s matter as information concerning the state of the land is relevant to whether Sam will want
to buy it. However, the two clients are not instructing the firm in relation to the same matter and so, on a strict
interpretation, their interests are not adverse to one another and consequently the prohibition in Paragraph 6.5
does not apply. However, Jacob could not inform Sam of the contamination because his duty of
confidentiality to Amy would remain.

Guidance: Unregulated Organisations – Conflict and Confidentiality: the SRA says that the fact that a solicitor
cannot meet their obligations to the new client because of their obligation to the former client will be no
defence to a breach of Paragraph 6.4.
The Guidance is that the solicitor must not act for the new client in the absence of informed consent
from the new client to the information not being disclosed to them.

One situation in which the duties of confidentiality and disclosure may conflict is where a solicitor is acting
for both the borrower and lender on a mortgage taken out to fund a purchase in a residential conveyancing
transaction and there is a suggestion of mortgage fraud.

Mortgage fraud - ie: the borrower overstating their income in order to obtain a higher mortgage or one
joint buyer forging the other’s signature.

There is an obligation to disclose all relevant information to the lender client, but the solicitor also has a
duty of confidentiality to the borrower client.

Accordingly, the solicitor must (1) seek consent from the borrower to disclose the information to the
lender, but if that (2) consent is not given the solicitor must refuse to continue to act for the borrower
and the lender.

Overlap with conflict of interest:

Where a solicitor holds confidential information for one current client which is relevant to another current
client in the same or a related matter, that particular solicitor will be unable to act for both clients unless:
 the client to whom the duty of confidentiality is owed consents to the information being disclosed or
 the other client gives informed consent, given or evidenced in writing, to the information not being
disclosed to them.

In the absence of such consents, the existence of a conflict of interest may prevent a solicitor from acting,
irrespective of the exceptions in Paragraph 6.5.

Professional embarrassement:

Even where the general prohibition in Paragraph 6.5 does not apply or one of the exceptions can be relied
upon, thus allowing a solicitor or a firm to act for two clients, a solicitor might still be obliged to refuse to act
on the grounds of professional embarrassment.

A 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.

Confidentiality and privilege:

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Confidentiality: prevents a solicitor from disclosing any information relating to a client;

Legal professional privilege: allows a solicitor to withhold specific information which the solicitor would
otherwise be required to disclose, for example in court proceedings.
 applies to information which is passed between a solicitor and a client, whether written or oral,
directly or indirectly.
 Limitations:
o Legal advice privilege applies only to information passed between the client and a solicitor
acting in the capacity of a solicitor = the communication must relate to the request for, or the
provision of, advice to the client by the solicitor.
 If documents are sent to or from an independent third party, even if they are created for the purpose of
obtaining legal advice, they will not be covered by this privilege.
 If the communication is made for the purpose of committing a fraud or a crime, it will not attract
privilege (R v Cox and Railton (1884)).

Clients and solicitors may also claim litigation privilege in respect of documents created for the sole or
dominant purpose of litigation or other adversarial proceedings which have already commenced or are
contemplated.
 This privilege also extends to communications between a solicitor and third parties.

A related issue which also arises in the case of litigation is that anything said by a solicitor whilst speaking
in court as an advocate is privileged.

Like the duty of confidentiality, privilege continues beyond the death of a client (Bullivant v A-G for
Victoria [1901]).

The General Data Protection Regulation (GDPR) and the Data Protection Act 2018 impose a high level of
transparency on firms in the context of informing clients and other individuals if it is processing their personal
data and providing a copy of that data if they request it (by a ‘subject access request’).

As a result of Sch 2 of the Data Protection Act 2018, data subjects’ rights under the data protection regime do
not take precedence over legal professional privilege or client confidentiality when it comes to transparency.

—————

Chapter 7: Conflicts

Types of conflict of interest:

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’);
 Solicitor can never act.
b. a conflict between two or more clients (a ‘conflict of interest’).
 Limited circumstances where the solicitor can act.
 Even in these circumstances, however, the overriding consideration will be the best interests
of each of the clients concerned, and in particular whether the solicitor is satisfied that it is
reasonable to act for all or both the clients.

Paragraphs 6.1 and 6.2 are repeated in the SRA Code of Conduct for Firms.

Conflict of interest between clients:

For the purposes of the Code of Conduct, a conflict of interest means ‘a situation where the solicitor’s or
firm’s separate duties to act in the best interests of two or more clients conflict’ (SRA Glossary).

Paragraph 6.2: Solicitor shall not act where there is a conflict, or significant risk of a conflict, unless:

40
  the clients have a substantially common interest in relation to the matter or the aspect of it, as
appropriate; or
 the clients are competing for the same objective.

Current clients:

Where a client’s retainer has been terminated the solicitor no longer owes a duty to act in that client’s best
interests, and so a conflict of interest cannot arise concerning the affairs of a former client.

A solicitor should decline to act at the outset in order to ensure that a conflict of interest does not arise in the
first place.

Conflict arising during the retainer: a situation may arise where a solicitor has agreed to act for two clients
when, at the beginning of the transaction, there was genuinely no actual conflict or any risk.
 In these circumstances, the solicitor cannot continue to act for both clients.
 Whether the solicitor is able to continue for act for one client will depend on the solicitor being able to
maintain client confidentiality.

The same matter or a particular aspect of it:

Acting for clients whose interests are in direct conflict, for example claimant and defendant in litigation, will
almost inevitably result in a conflict of interest, making it impossible to act for both parties.

Acting for two or more clients where the solicitor may need to negotiate on matters of substance on their
behalf, for example negotiating on price between a seller and a purchaser, is also likely to result in a conflict
of interest as separate duties will be owed to each client to act in their best interests and those duties conflict.

NB. it is for the solicitor to decide whether or not a conflict in fact arises in the particular circumstances of
the case.

A conflict of interest can also arise concerning a particular aspect of a matter rather than the matter as a whole.

Ie. a solicitor could not act to sell a new house for one client whilst also acting for another client who is
alleging that a part of the house has been built on his land.

Where the only conflict between the parties is their wider business interests then this will not create any
conflict of interest issues. - ie solicitor not acting for clients in relation to the same matter, but different
matters.

Significant risk of a conflict of interest:

A significant risk that a solicitor’s duties to act in the best interests of each client may conflict will be enough
to bring it within Paragraph 6.2.

A solicitor can act if, on the facts, there is no significant risk of a conflict arising.

Exceptions:

Where a conflict of interest exists, or where there is a significant risk that a conflict may exist, a solicitor may
still act for both parties in defined circumstances and with the informed consent of both parties.

—> The substantially common interest exception:

A solicitor can still act where the clients have a substantially common interest in relation to the matter or the
aspect of it, as appropriate (Paragraph 6.2(a)).

The SRA Glossary defines ‘a substantially common interest’ as a situation where there is a clear common
purpose between the clients and a strong consensus as to how it is to be achieved.

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Example:
A solicitor is instructed by a group of people who want to set up a company. Whilst those providing
instructions may not necessarily agree on every aspect involved in setting up a new business venture, so long
as they have agreed upon the key, fundamental matters (such as funding, shareholdings, management structure
and roles etc), it is likely that a clear common purpose and a strong consensus as to how this will be achieved
can be said to exist

NB. if differences were to arise within the group during the course of the matter which could be seen as
undermining the common purpose and strong consensus, the solicitor is likely to come to the conclusion that
the exception no longer applies and so would have to cease to act for the group.

—> The competing for the same objective (or ‘commercial’) exception:

A solicitor can still act where the clients are competing for the same objective (Paragraph 6.2(b)).

SRA Glossary: Clients will be ‘competing for the same objective’ in a situation in which two or more clients
are competing for an ‘objective’ which, if attained by one client, will make that ‘objective’ unattainable to the
other client or clients.
 ‘Objective’: an asset, contract or business opportunity which two or more clients are seeking to
acquire or recover through liquidation or by means of an auction or tender process or a bid or offer,
but not a public takeover.

This exception would enable one firm to act for two companies bidding to take over a third company, despite
the fact that the obligations to act in the best interests of the clients would conflict

Conditions for acting:

A set of conditions must be met if a solicitor is to be able to act for two or more clients under either of the
exceptions in Paragraph 6.2:
a. all the clients have given informed consent, given or evidenced in writing, to the solicitor acting;
 consent must be ‘informed’, meaning that the client must appreciate the issues and risks
involved
 Informed consent may be easier to obtain from sophisticated users of legal services, such as
large companies with in-house legal departments t
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.
 The solicitor should consider – both at the outset and throughout the duration of the retainer –
whether one client is at risk of prejudice if not represented separately (ie by another firm)
from the other client(s).

Own interest conflict:

This refers to any situation where a solicitor’s duty to act in the best interests of any client in relation to a
matter conflicts, or there is a significant risk that it may conflict, with the solicitor’s own interests in relation
to that or a related matter (SRA Glossary).

Ie. a solicitor could not act for a client suing a company where the solicitor was a major shareholder in that
company.

There are no exceptions to Paragraph 6.1.

SRA Guidance: Conflict of Interests includes the following examples of own interest conflict:
a. A financial interest of yours or someone close to you. For example, a client asks you to carry out
due diligence on a company which you or your spouse/partner own shares in.

42
 b. A personal or business relationship of yours. For example, where you are asked to advise on a
claim against a relative of yours, a friend or someone with whom you are involved with in a common
financial enterprise.
c. Your role as an employee. For example, a client asks for advice in relation to a dispute involving
your employer or a fellow employee.
d. Your own conduct (as a firm or an individual). For example, the wrong advice has been given to
the client or the wrong action taken on their behalf.

One situation which could give rise to an own interest in conflict is where a solicitor is asked to draft a will in
which the client wishes to make a gift of significant value to the solicitor or a member of the solicitor’s
family.

Guidance: Drafting and Preparation of Wills: the SRA makes it clear that each case must be judged
on its merits, but usually the effect of Paragraph 6.1 will be to prevent the solicitor acting unless the
client agrees to take independent legal advice on making the gift.

An own interest conflict may occur where something has gone wrong in the client’s case or the solicitor has
made a mistake. In such a situation Paragraph 7.11 requires the solicitor to be open and honest with the
client.

Where one of the client’s options is to bring a claim for negligence against the solicitor, the client must
be told to seek independent legal advice.

Limited retainer:

An alternative to relying on one of the exceptions in Paragraph 6.2 may be to accept a limited retainer.

The solicitor 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.

Property transactions:

Dealing with property transactions, particularly in the residential sector, is one area of practice which has the
potential for giving rise to a conflict of interest.

Acting for buyer and seller:

SRA Guidance: Conflict of Interests gives one client selling or leasing an asset to another client as an example
of a situation that can give rise to a conflict of interest and states that a solicitor should not normally act.

It is for the solicitor to decide on the individual facts of the case whether there is a conflict of interest or a
significant risk of one arising. Consider all the facts, including:
 Nature of the transaction - ie. high-value or complex transactions: greater potential risk
 Nature of the parties - ie vulnerability or inequality of bargaining power
 Etc.

Even where a conflict exists, it may come within the substantially common interest exception, but very
unlikely.

Acting for joint buyers:

Common practice - it will usually be the case that the interests of both buyers are the same and therefore no
conflict arises.

The solicitor must assess each case on its merits and recognise those cases which are outside the norm, for
example where one buyer is being forced or pressurised into the transaction by the other.

Acting for borrower and lender:

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Many buyers will fund the purchase price with the aid of a loan or mortgage.

In a commercial property context parties are usually separately represented.

In a residential transaction the buyer’s solicitor will often be asked to act for the lender as well.

The solicitor will need to decide whether a conflict of interest arises.

The circumstances in which a conflict could arise include where the terms of the mortgage offer are unfair to
the borrower, the buyer is unable to comply with the mortgage terms or substantial negotiation will be
required.

Usually the mortgage is offered on standard terms and conditions with no negotiation being necessary. It may
be possible to conclude that no conflict of interests arises in such circumstances or, if there is, that there is a
‘substantially common interest’ in that both the borrower and the lender want a good and marketable title to
the property to be acquired.

————

Chapter 8: Undertakings

An undertaking is a type of promise.

A solicitor must act with integrity (Principle 4). One aspect of acting with integrity is for a solicitor to keep
their word. So, if a solicitor makes a promise to do something, the person to whom that promise is made
should be able to rely on the solicitor in fact doing so.

The need for undertakings:

Given by solicitors in order to smooth the path of a transaction. They are a convenient method by which
some otherwise problematic areas of practice can be avoided.

The meaning of ‘undertaking’:

In essence, an undertaking is an enforceable promise

SRA Glossary:
a statement given orally or in writing, whether or not it includes the word ‘undertake’ or ‘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.

NB. even if such a promise is made on a solicitor’s behalf by a member of their staff, it may constitute an
undertaking.

Paragraph 1.3: A solicitor must perform all undertakings given by them and do so within an agreed timescale
or, if no timescale has been agreed, then within a reasonable amount of time.

Once the undertaking has been relied upon by the recipient, it can be withdrawn only by agreement.

Breach of an undertaking:

The terms of an undertaking will usually be personally binding on the individual solicitor concerned.

If a solicitor fails to comply with an undertaking, the solicitor may be sued personally by the recipient.
The solicitor will also breach the Code of Conduct for Solicitors and may be disciplined by the SRA or the
Solicitors Disciplinary Tribunal.

The obligation in Paragraph 1.3 is replicated in the SRA Code of Conduct for Firms.

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Undertakings given by solicitors, non-admitted staff, and also undertakings given by anyone held out by the
firm as representing the firm are binding on the firm.

A solicitor should therefore maintain an effective system that records when undertakings have been given and
when they have been discharged.

Terms of the undertaking:

An undertaking is binding regardless of whether it is given orally or in writing.

It is advisable to give undertakings in writing, so that there can be no dispute as to the terms of the
undertaking.

Oral undertaking: the solicitor should ensure that an attendance note recording the undertaking is placed on
the client’s file and that it is confirmed in writing.

An undertaking need not be contractual in nature. - there is no obligation for consideration.

Although not expressly stated in the Code for Solicitors, it is likely that any ambiguity in the wording of the
undertaking will be interpreted in favour of its recipient.

The Law Society has agreed standard wording for undertakings which commonly arise in practice, for
example an undertaking required from the seller’s solicitor in a conveyancing transaction to discharge the
mortgage over the property on completion.

Acts outside the solicitor’s control:

A solicitor may be called upon to undertake to perform an act which is outside the solicitor’s control, such as
to forward documents which are not in the solicitor’s possession.

The simple fact that the solicitor is unable to perform the undertaking without the cooperation of the client or
another third party does not discharge the solicitor’s obligation to perform, and the undertaking remains
enforceable.

A solicitor may seek to give an undertaking that, in respect of the example above, they will use their
‘reasonable endeavours’ to obtain and provide the documents requested.

Undertakings ‘on behalf’ of a client:

An undertaking may be drafted as being made ‘on behalf of’ the solicitor’s client. This will not prevent the
undertaking from being enforceable as against the solicitor, who will remain personally liable.

In theory, it is possible for a solicitor to give an undertaking ‘on behalf’ of a client and exclude personal
liability. In order to do so, the solicitor would have to expressly disclaim personal liability in the very
clearest terms.

However, such undertaking is unlikely to be accepted by the proposed recipient, as their ability to
enforce it (and therefore rely on it) will be greatly reduced.

Timescale:

Paragraph 1.3 expressly provides that undertakings must be performed ‘within an agreed timescale’, and
therefore it is important that any such timescale is expressed when the undertaking is given.

Within a ‘reasonable amount of time’: what is ‘reasonable’ will depend upon the facts of each case, and so
this element of uncertainty should be a consideration when preparing to give or receive such undertakings.

Costs:

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Where an undertaking is given in respect of the payment of costs of another party, the term ‘costs’ will be
implied to mean proper costs unless a specific amount is agreed.

Therefore, a solicitor is able to request an assessment of the costs by the court if costs are not agreed.

Client’s authority:

An undertaking is a personal obligation on the solicitor who gave it, and therefore the solicitor will be held
liable for it, even if performance would put the solicitor in breach of his duty to the client.

A solicitor must have clear and express authority from the client before giving any undertakings.
When such authority has been received, it may be withdrawn by the client at any time until the solicitor
has acted upon it, even if it is expressed to be irrevocable.

Ie. Where solicitor gives an undertaking on client’s behalf to a third party without first consulting and
obtaining consent from that client:
 Solicitor personally liable to comply with it (unless expressly disclaimed personal liability)
 Third party can enforce undertaking by suing the solicitor
 Solicitor could also be reported to the SRA and the Legal Ombudsman in the form of a complaint
about the services provided.

Change of circumstances:

An undertaking will remain binding upon the solicitor if the circumstances change so that it is impossible
to fulfil it, either wholly or partially.

Where an undertaking is given which is dependent upon the happening of a future event and it becomes
apparent that the future event in question will not occur, good practice will be to notify the recipient of this.

Enforcement:

The courts:

Courts: supervisor role in respect of a solicitor as an officer of the court.

 Jurisdiction: s 50 of the Solicitors Act 1974.

Accordingly, where a solicitor’s undertaking has been breached, an aggrieved party may seek summary
enforcement or compensation for any loss.
 Firms are obliged to carry indemnity insurance to cover such claims.
 When value of the claim falls within the excess of those policies: personal liability for the solicitor
concerned.

A ‘solicitor’s undertaking’ for these purposes must have been given by an individual in their capacity as a
solicitor (as opposed to in a personal or business capacity).
 The rationale is that the court’s inherent jurisdiction is aimed a disciplining those performing the role
of a solicitor.

In Harcus Sinclair v Your Lawyers [2021] UKSC 32, the Supreme Court confirmed that an undertaking
given by an incorporated law practice, ie a limited company or LLP (or an undertaking given by an
individual solicitor as agent for such a practice), is not capable of being enforced against that practice by
the court under its inherent jurisdiction.
—> because an incorporated practice is a separate legal entity.

Thus, individual solicitors should refer to their firm’s policy on accepting undertakings from incorporated
practices.

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Where an undertaking is not enforceable by the court, the redress for its breach will be a claim under
contract, negligence or breach of statutory trust depending on the facts.

A breach of any undertaking is likely to be a breach of professional conduct.

The SRA does not usually investigate a breach of an undertaking given to the court itself, unless the court
reported the matter to the SRA.

The SRA and the Solicitors Disciplinary Tribunal:

A breach of any undertaking is likely to be a breach of professional conduct.

The Legal Ombudsman, the SRA and the Solicitors Disciplinary Tribunal have no power to enforce the
performance of an undertaking.
Neither can these organisations direct that a solicitor pay compensation to an aggrieved third party.

However, they may investigate the matter and impose disciplinary sanctions, as appropriate, against the
solicitor, the firm, its members or directors.

————

Chapter 9: Duties to the Court and Third Parties

Duty to the court:

As an officer of the court, a solicitor owes a duty to the court.

Number of duties under the SRA Principles and Code for Solicitors.

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).
A solicitor also has a duty to act in the best interests of each client (Principle 7).

Lord Hoffman: Lawyers conducting litigation owe a divided loyalty. They have a duty to their clients, but
they may not win by whatever means. They also owe a duty to the court and the administration of justice.

—> Principles which safeguard the wider public interest take precedence over an individual client’s interests.
—> Principle 1: overriding duty.

The duty not to mislead the court:

A basic and self-explanatory duty is found in Paragraph 1.4:

You must not mislead or attempt to mislead the court (or others), either by your own acts or omissions
or allowing or being complicit in the acts or omissions of others (including your client).

This duty is part and parcel of the fundamental requirements for a solicitor to act with honesty (Principle 4)
and integrity (Principle 5) and uphold public trust in the profession (Principle 2).

Example:
Where client confesses to their solicitor to having committed a crime —> solicitor cannot inform the tribunal
of the truth (or her reasons for withdrawal) without the consent of the client as to do so would be a breach of
confidentiality (Paragraph 6.3) —> must refuse to continue to act unless client agrees to disclose the truth to
the tribunal/court.

Misleading the court is a serious matter. It demonstrates a real want of ethical behaviour. It is therefore likely
to result in severe sanctions being imposed on a solicitor.

Lord Thomas: one of the most serious offences that an advocate or litigator can commit.

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The conduct of litigation:

Paragraphs 2.1 to 2.7 set out some specific obligations in the context of dispute resolution and proceedings
before courts, tribunals and inquiries.

SRA Glossary defines ‘court’ as any court, tribunal or inquiry of England and Wales, or a British court
martial, or any court of another jurisdiction.

A solicitor must not misuse or tamper with evidence or attempt to do so (Paragraph 2.1) and must only make
assertions or put forward statements, representations or submissions to the court or others which are properly
arguable (Paragraph 2.4).

Examples of breach:
a. calling a witness whose evidence the solicitor knows is untrue;
b. continuing to act for a client if the solicitor becomes aware that the client has committed perjury or
deliberately misled (or attempted to mislead) the court;
c. constructing facts to support a client’s case or drafting documents relating to proceedings containing
statements or contentions which the solicitor does not consider to be properly arguable before a court.

A solicitor must not place themselves in contempt of court and must comply with court orders which place
obligations on the solicitor (Paragraph 2.5) and must not waste the court’s time (Paragraph 2.6).

SRA published its Guidance on conduct in disputes. Examples include:

a. Making allegations without merit.Thisoccurswhenasolicitorbringsaclaimwithinsufficient
investigation of the merits or the underlying legal background. There is little or no legal merit, or the
solicitor may threaten/initiate litigation in such a case in the hope that the opponent will pay a
settlement rather than incur the costs of defending the case.
b. Pursuing litigation for improper purposes. This occurs when a solicitor uses the court process for
purposes not directly connected to resolving a dispute, for example to run up high costs for the
client’s commercial rival or silencing criticism.
c. Conducting excessive or aggressive litigation.

Witnesses:

Should a solicitor wish, or require, in the best interests of the client, to take statements from a witness or
potential witness, the solicitor may do so at any point in the proceedings.

A solicitor must not seek to influence the substance of evidence, including generating false evidence or
persuading witnesses to change their evidence (Paragraph 2.2).

A solicitor must not provide or offer to provide any benefit to witnesses dependent upon the nature of their
evidence or the outcome of the case (Paragraph 2.3).

To avoid any suggestion of impropriety, it may be prudent to interview a witness in the presence of their
legal representative.

Duty to disclose law and facts:

No duty to inform the court of any evidence or witnesses which would prejudice the solicitor’s own client.

There is a duty on the part of a solicitor to draw the court’s attention to relevant cases and statutory provisions
or procedural irregularities of which the solicitor is aware and which are likely to have a material effect on
the outcome of the proceedings (Paragraph 2.7).

NB. May work against the client’s case. However, this is a situation in which the duty to uphold the rule
of law and the proper administration of justice is likely to take precedence.

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The requirement placed on the prosecution to present evidence in a dispassionate manner means that in
addition to complying with the duty under Paragraph 2.7, the solicitor must, for example, put all relevant facts
before the court and notify the defence of evidence which may assist the defendant.

Refusing instructions to act:

A solicitor is never obliged to act in a case. A solicitor is generally free to decide whether or not to accept
instructions in any matter, provided that the solicitor does not discriminate unlawfully.

If it is clear to a solicitor appearing as an advocate, or acting in litigation, that the solicitor or anyone else in
the firm will be called as a witness in the matter, the solicitor should decline to appear/act unless satisfied
that this will not prejudice the solicitor’s independence as an advocate or a litigator (Principle 3), the interests
of the client (Principle 7) or the interests of justice (Principle 1).

Instructing counsel:

Where the client requires advocacy services, the solicitor must consider, based on the complexity of the case
and the solicitor’s own experience, whether it would be in the best interests of that client to instruct
counsel (or another solicitor within the firm) to act as the advocate in the proceedings.

Choice of advocate:

A solicitor must exercise care in choosing the appropriate barrister for the case, taking into consideration the
experience and seniority of counsel.

In selecting a particular barrister, a solicitor must not discriminate by allowing their personal views to affect
their professional relationships and the way in which the solicitor provides services (Paragraph 1.1) and must
act in a way that encourages equality, diversity and inclusion (Principle 6).

A solicitor must not discriminate when instructing a barrister on the grounds of, for example, age, race, sex or
disability - unlawful under s 47 Equality Act 2010.

Solicitor can consult the client, however the solicitor must consider the motivation behind any input from the
client. The client’s request may appear to be based on discriminatory grounds.

Duty to counsel:

It remains the solicitor’s duty to ensure that adequate instructions are provided to the chosen barrister.

The solicitor should ensure that these instructions, including any relevant supporting statements,
information or documents, are provided in good time to allow adequate preparation of the case.

Duty to the client:

All the solicitor’s duties to the client remain in full force and effect.

When instructing counsel, the solicitor must be satisfied with the quality of the advice given and ensure that
there are no obvious errors or inconsistencies. If such errors are apparent, clarification should be requested or
a second opinion obtained.
‘must not rely on such advice without exercising his own independent judgement’

Counsel’s fees:

A solicitor is responsible for appointing counsel and (subject to limited exceptions) is therefore responsible
personally for the payment of counsel’s fees.

Many solicitors therefore request that their clients provide money on account to cover prospective
barristers’ fees.

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Duty to third parties:

In certain circumstances a solicitor also has a duty to third parties or the rules of professional conduct require
a solicitor to behave in a certain way towards third parties.

Not taking an unfair advantage:

Under Paragraph 1.2 a solicitor must not abuse their position by taking unfair advantage of not only the
client, but also others.

Third parties may well have a lack of legal knowledge or proper understanding of legal procedures, and a
solicitor must not seek to take unfair advantage of this in pursuing a case for a client.

Particular care must be taken in situations where the opponent is unrepresented or is vulnerable.

SRA report on ‘Balancing duties in litigation’: ‘fine line between proper defence of the client’s interest and
taking unfair advantage of others, usually highlighted by any form of deceit or misinformation’.

Examples of reported conduct:

 overbearing threats of claims or poor outcomes
 legalistic letters to minors or others who might be vulnerable
 threats of litigation where no legal claims arises
 Improper use of NDAs - ie in relation to allegations of harassment

Public office and personal interests:

Solicitors may sometimes be appointed to a public office, such as being a member of a planning committee or
a district judge. The public office may provide the solicitor with confidential information or inside knowledge
of, for example, policy, which may affect the solicitor’s advice to a client or the solicitor’s approach to the
matter.

If a solicitor takes unfair advantage of a public office held by the solicitor, a member of their family or their
firm —> òikley breach of Principles 2 and 5.

Giving references:

Under the general law of negligence, a solicitor will owe a duty of care to the subject of any reference given
by that solicitor - Spring v Guardian Assurance plc [1994]: liable in damages for economic loss suffered as
a result of the negligent preparation of the reference.

Giving a false reference would almost certainly breach the Code of Conduct for Solicitors, for example for
breach of Principle 2.

Offensive communication:

A solicitor is under a duty to act with integrity (Principle 5) and in a way that upholds public trust and
confidence in the solicitors’ profession (Principle 2).

Accordingly, a solicitor must not communicate with any third party in a manner that could be considered to be
offensive.

Clearly, communications that are racist or sexist will fall foul of the SRA Principles.

However, a communication does not have to be discriminatory in order to be offensive.

Ie. Should guard against robust communications with an opponent crossing the line and becoming
offensive.

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 Ie. Should not allow their independence to be compromised by employing abusive or inflammatory
language at the client’s behest.

Beneficiaries:

Where a solicitor is instructed to administer a probate estate, the solicitor’s client will be the personal
representative of the deceased’s estate.

In certain circumstances a solicitor will also owe a duty of care to the beneficiaries of that estate.

Ross v Caunters (1980): A solicitor failed to warn a testator that the will should not be witnessed by a
beneficiary. Accordingly, the beneficiary who witnessed the will was unable to claim her share of the estate.
The solicitor was held liable in negligence to the beneficiary.

White v Jones (1995): A solicitor was instructed to draw up a will. The client died approximately a month
later, before the will had been drafted. The solicitor was successfully sued in negligence by the beneficiaries
who missed out on their share of the estate as a result of the solicitor’s failure to draft the will.

Contracting a represented third party:

Care must be taken in the context of a solicitor communicating with another party when the solicitor is aware
that the other party has retained a lawyer in a matter.

It will be prudent to avoid such communication except:

a. to request the name and address of the other party’s lawyer; or
b. where the other party’s lawyer consents to the solicitor communicating with the client; or
c. where there are exceptional circumstances.

Agents’ costs:

As with counsel’s fees, a solicitor is personally responsible for meeting the fees of agents or others appointed
by the solicitor on behalf of the client.

This extends only to costs properly incurred.

The solicitor may ask for monies on account prior to incurring such expenditure.
Alternatively, the solicitor and agent may agree that the agent’s fee will become payable on receipt by the
solicitor of the client’s payment.

——————

Chapter 10: Duties to the SRA and Compliance

All solicitors are under a duty to work with the SRA in ensuring that not only their own conduct, but also the
conduct of those with whom they work or come into contact, meets high standards.

Keeping up to date:

Paragraph 7.1: a solicitor must keep up to date with and follow the law and regulation governing the way the
solicitor works.
 Including provisions of legislation affecting practice, such as the Solicitors Act 1974 and the Legal
Services Act 2007.
 maintain knowledge and understanding of the SRA Standards and Regulations (in particular the
Principles, Codes of Conduct and the Accounts Rules) and the Guidance issued by the SRA

Cooperation:

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A solicitor must cooperate with the SRA as well as other regulators, ombudsmen, and those bodies with a role
overseeing and supervising the delivery of, or investigating concerns in relation to, legal services (Paragraph
7.3).

A solicitor must also respond promptly to the SRA and provide full and accurate explanations, information
and documents in response to any request or requirement and ensure that relevant information is available for
inspection by
the SRA (Paragraph 7.4).

Any remedial action requested by the SRA must be acted upon promptly (Paragraph 7.10).

Investigating claims for redress:

If required to do so by the SRA, the solicitor must investigate whether anyone may have a claim against them,
provide the SRA with a report on the outcome of the investigation and notify relevant persons that they may
have such a claim accordingly (Paragraph 7.11).

Notification:

Paragraph 7.6 requires a solicitor to notify the SRA automatically should a particular event occur. The
notification requirement arises if:
a. the solicitor is subject to a criminal charge, conviction or caution;
b. the solicitor is made bankrupt, enters an individual voluntary arrangement with their creditors or is
subject to a debt relief order;
c. the solicitor becomes aware of material change in information about them or their practice previously
provided to the SRA;
d. the solicitor becomes aware that information previously provided to the SRA about them or their
practice is false, misleading, incomplete or inaccurate.

Reporting:

The SRA considers that by reporting behaviour which puts the client, the public or the public interest at risk, a
solicitor is fulfilling the duty to act with integrity (Principle 5).

A solicitor is obliged to ensure that a prompt report is made to the SRA of any serious breach of its regulatory
arrangements by any person regulated by it (including the solicitor themselves) of which the solicitor is aware
(Paragraph 7.7).

The obligation to report may also be satisfied by reporting to the firm’s compliance officers, where
appropriate (Paragraph 7.12).

The reporting obligation will require the solicitor to exercise their own judgment in deciding whether the
particular facts require a report to be made.

A report is required in respect of ‘a serious breach’. It is clear, therefore, that the SRA will not be concerned
with trivial matters or technical breaches.

Factors which the SRA takes into account in assessing seriousness include:
a. The nature of the allegation: Allegations involving sexual or violent misconduct, dishonesty,
criminal behaviour, abuse of trust, taking unfair advantage of clients or others and the misuse of client
money are serious in themselves.

b. Intent/motivation: Conduct which is deliberate, premeditated, dishonest, repeated or displays a

reckless disregard of professional obligations is considered to be more serious.

c. Harm and impact: The greater the harm caused and the more foreseeable the impact, the more likely
the behaviour is to be considered serious.

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 d. Vulnerability: The SRA understandably takes a particularly poor view of conduct where the ‘victim’
is vulnerable.

In addition, a solicitor must inform the SRA promptly of any matters which the solicitor reasonably believes
should be brought to the SRA’s attention in order that the SRA can investigate whether a serious breach of its
regulatory arrangements has occurred or otherwise exercise its regulatory powers (Paragraph 7.8).

Here, a solicitor will be required to carry out a careful balancing exercise between the duty of confidentiality
on the one hand and the public interest on the other.

Paragraph 7.5 provides that a solicitor must not attempt to prevent anyone from providing information to the
SRA or any other body exercising regulatory, supervisory, investigatory or prosecutory functions

Reporting to compliance officers:

Paragraph 7.12: any obligation placed on a solicitor to notify or provide information to the SRA will be
satisfied if the solicitor provides the information to their firm’s compliance officers.
 The solicitor should still make a report themselves if they are convinced that a report is required and
are not satisfied that the compliance officers will do so.

Miscellaneous business requirements:

Paragraph 5.5 requires a solicitor who holds a practising certificate to complete and deliver an annual return
to the SRA.

Paragraph 5.6 requires a solicitor carrying on reserved legal activities in a non-commercial body to ensure
that the body takes out and maintains adequate and appropriate indemnity insurance in compliance with the
SRA Indemnity Insurance Rules.

Managers:

Paragraph 8.1 of the SRA Code of Conduct for Firms: the responsibility for ensuring the firm’s compliance
with the Code lies with its managers.

Managers therefore have the ultimate responsibility for how the firm is run and the legal services
delivered.

However, a finding of misconduct against a firm by the SRA is not a finding against an individual manager.

A manager will generally only be considered to be responsible for their personal actions or if they should have
known about or intervened to prevent the wrongdoing.

Compliance officers:

Every firm must have a compliance officer for legal practice (COLP) and a compliance officer for finance
and administration (COFA).
The compliance officers will be senior individuals within the firm approved by the SRA for carrying out this
role.
In small firms/sole practitioners, there roles may be fulfilled by the same person.

COLP:

Ensures that systems and controls are in place to enable the firm and those within it to comply with their
obligations under the SRA Standards and Regulations, the firm’s authorisation from the SRA and relevant
statutory provisions (eg the Legal Services Act 2007 and the Solicitors Act 1974).

Under Paragraph 9.1 of the Code of Conduct for Firms a COLP must take all reasonable steps to:

53
 a. ensure compliance with the terms and conditions of the firm’s authorisation;
b. ensure compliance by the firm and its managers, employees or interest holders with the SRA’s
regulatory arrangements which apply to them;
c. 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;
d. ensure that a prompt report is made to the SRA of any facts or matters that the COLP reasonably
believes are capable of amounting to a serious breach of the terms and conditions of the firm’s
authorisation, or the SRA’s regulatory arrangements which apply to the firm, managers or employees;
e. ensure that the SRA is informed promptly of any facts or matters that the COLP reasonably believes
should be brought to its attention in order that it may investigate whether a serious breach of its
regulatory arrangements has occurred or otherwise exercise its regulatory powers.

(d) and (e) replicate Paragraphs 7.7 and 7.8 of the SRA Code of Conduct for Solicitors.

Whilst the responsibilities placed on the COLP are wide, the SRA have repeatedly said that the COLP will not
be used as a scapegoat for wrongdoing by the firm. The responsibility for compliance ultimately rests with
the managers of the practice under Paragraph 8.1.

COFA:

Ensures compliance with the SRA Accounts Rules.

Under Paragraph 9.2 of the SRA Code of Conduct for Firms, a COFA must take all reasonable steps to:
a. ensure that the firm and its managers and employees comply with any obligations imposed upon them
under the SRA Accounts Rules;
b. ensure that a prompt report is made to the SRA of any facts or matters that the COFA reasonably
believes are capable of amounting to a serious breach of the SRA Accounts Rules which apply to
them;
c. ensure that the SRA is informed promptly of any facts or matters that the COFA reasonably believes
should be brought to its attention in order that it may investigate whether a serious breach of its
regulatory arrangements has occurred or otherwise exercise its regulatory powers.

Uultimately rests with the managers.

However, the COFA may be liable if they fail to meet their own responsibilities.

———

Paragraphs 1, 6 and 7 of the SRA Code of Conduct for Solicitors, RELs and RFLs and the associated
definitions in the SRA Glossary (available on the SRA’s website).

Para 1: Maintaining trust and acting fairly:

1.1 You do not unfairly discriminate by allowing your personal views to affect your professional relationships
and the way in which you provide your services.

1.2 You do not abuse your position by taking unfair advantage of clients or others.

1.3 You perform all undertakings given by you, and do so within an agreed timescale or if no timescale has
been agreed then within a reasonable amount of time.

1.4 You do not mislead or attempt to mislead your clients, the court or others, either by your own acts or
omissions or allowing or being complicit in the acts or omissions of others (including your client).

54
1.5 You treat colleagues fairly and with respect. You do not bully or harass them or discriminate unfairly
against them. If you are a manager you challenge behaviour that does not meet this standard.

Para 6.1-6.2: Conflicts of Interests

6.1 You do not act if there is an own interest conflict or a significant risk of such a conflict.

6.2 You do not act in relation to a matter or particular aspect of it if you have a conflict of interest or a
significant risk of such a conflict in relation to that matter or aspect of it, unless:

(a) the clients have a substantially common interest in relation to the matter or the aspect of it, as
appropriate; or

(b) the clients are competing for the same objective,

and the conditions below are met, namely that:

(i) all the clients have given informed consent, given or evidenced in writing, to you acting;

(ii) where appropriate, you put in place effective safeguards to protect your clients' confidential
information; and

(iii) you are satisfied it is reasonable for you to act for all the clients.

Para 6.3-6.5: confidentiality and disclosure

6.3 You keep the affairs of current and former clients confidential unless disclosure is required or permitted
by law or the client consents.

6.4 Where you are acting for a client on a matter, you make the client aware of all information material to the
matter of which you have knowledge, except when:

(a) the disclosure of the information is prohibited by legal restrictions imposed in the interests of
national security or the prevention of crime;

(b) your client gives informed consent, given or evidenced in writing, to the information not being
disclosed to them;

(c) you have reason to believe that serious physical or mental injury will be caused to your client or
another if the information is disclosed; or

(d) the information is contained in a privileged document that you have knowledge of only because it
has been mistakenly disclosed.

6.5 You do not act for a client in a matter where that client has an interest adverse to the interest of another
current or former client of you or your business or employer, for whom you or your business or employer
holds confidential information which is material to that matter, unless:
55
 (a) effective measures have been taken which result in there being no real risk of disclosure of the
confidential information; or

(b) the current or former client whose information you or your business or employer holds has given
informed consent, given or evidenced in writing, to you acting, including to any measures taken to
protect their information.

Para 7: Cooperation and accountability

7.1 You keep up to date with and follow the law and regulation governing the way you work.

7.2 You are able to justify your decisions and actions in order to demonstrate compliance with your
obligations under the SRA's regulatory arrangements.

7.3 You cooperate with the SRA, other regulators, ombudsmen, and those bodies with a role overseeing and
supervising the delivery of, or investigating concerns in relation to, legal services.

7.4 You respond promptly to the SRA and:

a. provide full and accurate explanations, information and documents in response to any request or
requirement; and

b. ensure that relevant information which is held by you, or by third parties carrying out functions on
your behalf which are critical to the delivery of your legal services, is available for inspection by
the SRA.

7.5 You do 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.

7.6 You notify the SRA promptly if:

a. you are subject to any criminal charge, conviction or caution, subject to the Rehabilitation of
Offenders Act 1974;

b. a relevant insolvency event occurs in relation to you; or

c. if you become aware:

(i) of any material changes to information previously provided to the SRA, by you or on your
behalf, about you or your practice, including any change to information recorded in the register;
and

(ii) that information provided to the SRA, by you or on your behalf, about you or your practice is
or may be false, misleading, incomplete or inaccurate.

56
7.7 You report promptly to the SRA or another approved regulator, as appropriate, any facts or matters that
you reasonably believe are capable of amounting to a serious breach of their regulatory arrangements by
any person regulated by them (including you).

7.8 Notwithstanding paragraph 7.7, you inform the SRA promptly of any facts or matters that you reasonably
believe should be brought to its attention in order that it may investigate whether a serious breach of
its regulatory arrangements has occurred or otherwise exercise its regulatory powers.

7.9 You do not subject any person to detrimental treatment for making or proposing to make a report or
providing or proposing to provide information based on a reasonably held belief under paragraph 7.7 or 7.8
above, or paragraph 3.9, 3.10, 9.1(d) or (e) or 9.2(b) or (c) of the SRA Code of Conduct for Firms, irrespective
of whether the SRA or another approved regulator subsequently investigates or takes any action in relation to
the facts or matters in question.

7.10 You act promptly to take any remedial action requested by the SRA. If requested to do so by
the SRA you investigate whether there have been any serious breaches that should be reported to the SRA.

7.11 You are honest and open with clients if things go wrong, and if a client suffers loss or harm as a result
you put matters right (if possible) and explain fully and promptly what has happened and the likely impact. If
requested to do so by the SRA you investigate whether anyone may have a claim against you, provide
the SRA with a report on the outcome of your investigation, and notify relevant persons that they may have
such a claim, accordingly.

7.12 Any obligation under this section or otherwise to notify, or provide information to, the SRA will be
satisfied if you provide information to your firm's COLP or COFA, as and where appropriate, on the
understanding that they will do so.

—
Paragraphs 8 and 9 of the SRA Code of Conduct for Firms and the associated definitions in the SRA
Glossary (available on the SRA’s website).

Para 8: Managers in SRA authorised firms

8.1 If you are a manager, you are responsible for compliance by your firm with this Code. This responsibility
is joint and several if you share management responsibility with other managers of the firm.

Para 9: Compliance officers

9.1 If you are a COLP you must take all reasonable steps to:

a. ensure compliance with the terms and conditions of your firm's authorisation;

b. ensure compliance by your firm and its managers, employees or interest holders with
the SRA's regulatory arrangementswhich apply to them;

c. ensure that your 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;
57
 d. ensure that a prompt report is made to the SRA of any facts or matters that you reasonably believe are
capable of amounting to a serious breach of the terms and conditions of your firm's authorisation, or
the SRA's regulatory arrangementswhich apply to your firm, managers or employees;

e. notwithstanding sub-paragraph (d), you ensure that the SRA is informed promptly of any facts or
matters that you reasonably believe should be brought to its attention in order that it may investigate
whether a serious breach of its regulatory arrangements has occurred or otherwise exercise its
regulatory powers,

save in relation to the matters which are the responsibility of the COFA as set out in paragraph 9.2 below.

9.2 If you are a COFA you must take all reasonable steps to:

a. ensure that your firm and its managers and employees comply with any obligations imposed upon
them under the SRA Accounts Rules;

b. ensure that a prompt report is made to the SRA of any facts or matters that you reasonably believe are
capable of amounting to a serious breach of the SRA Accounts Rules which apply to them;

c. notwithstanding sub-paragraph (b), you ensure that the SRA is informed promptly of any facts or
matters that you reasonably believe should be brought to its attention in order that it may investigate
whether a serious breach of its regulatory arrangements has occurred or otherwise exercise its
regulatory powers.

—
The SRA's 'Guidance - Confidentiality of client instructions' and 'Guidance - Conflicts of
interest' (available on the SRA’s website)

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