General rules re referrals
Client must be informed of any financial or other interest in a referral
All fee sharing agreements must be in writing and client must be informed
Must not make/receive referrals payments in rel to client in criminal proceedings
Prohibited referral fees
Damages following PI or death (and ancillary claims arising from same circs)
SRA will treat apparent prohibited referral fees as such unless you demonstrate otherwise (=> must keep records)
Rules re a separate business
= a business:
Which you own, or actively participate in control, or are otherwise connected with
Which is not an authorised body, authorised non-SRA firm, or an overseas practice
=> Following actions require client’s informed consent:
Referring, recommending, or introducing a client to a separate business; or
Dividing a client’s matter between you and a separate business
Indemnity insurance
Required only if you are carrying out reserved legal activities (reserves => RNLI OP), i.e.
Right of audience
Notarial activities
Litigation
Instruments relating to real or personal estate
Oaths
Probate
=> indemnity insurance must be adequate and appropriate in respect of all services you provide (regardless of whether they comprise reserved legal activities)
General re conflit of interests
Conflict (or sig risk of conflict) only relates to same or related matter
General business is not sufficiently related to create a conflict situation
What to do if conflict of interest arises
Before retainer => decline to act (or only act for client whose interest they can best represent)
After retainer => inform all clients, poss stop acting for all
Client generally may not consent to conflict
Limited retainer => may act on aspects where there is no conflict and advise client to take ind advice on the conflicted area
May decline to act due to professional embarrassment even if no conflict (eg if competitor org requests rep in separate matter)
Own interest conflict
=> sol must not act (ie an absolute bar to acting, even if client’s consent is obtained)
Eg
- Any financial interest
- Sol is a B in client’s will
- Conflict if gift of sig value (or sig part of estate)
- BUT sol may act if satisfied client has taken independent advice with regard to making the gift
- No conflict if sol’s ability to advise the client would not be undermined by the financial interest - Personal rel
- Commercial rel
- Employment claim of former employee
- Sol’s own conduct in question
Conflict of interest/client conflict
Conflict if advice to one client would be different to another client involved in same matter
Must not act if conflict or sig risk of conflict (UNLESS ONE OF EXCEPTIONS APPLIES)
Exceptions to acting in cases of client conflict
- ‘substantially common interest’ exception
Ie where there is a clear common purpose and a strong consensus on how it is to be achieved
Eg clients who want to take out a lease as JT or set up a business together - ‘competing for same objective’ exception
Ie objective that, if attained by one client, will make that objective unattainable for the others
Objective = asset, contract, or business opportunity which clients are seeking to acquire/recover through liquidation or by auction or tender process or through bid/offer which is not public
Eg where 2 companies want to take over 3rd company
What to do if one of the exceptions to client conflicts arises
May only act if all following conditions are met:
- Client has given informed consent, given or evidenced in writing, to you acting
- Where appropriate, you put in place effective safeguards to protect your clients’ confidential information (could incl separate FEs)
- You are satisfied that it is reasonable for you to act for all the clients
Consider:
- Whether clients will benefit fro sol acting for both of them (eg less costly or convenient)
- Whether there will be extensive negotiations between parties
- Whether there is an imbalance in knowledge or bargaining power between clients
Duty of disclosure + exceptions
Must make client aware of all info material to that retainer
Exceptions =
Client gives informed consent, given or evidenced in writing, to nondisclosure
You have reason to believe disclosure would cause serious physical or mental injury to a person
Legal restrictions imposed in the interests of national security of the prevention of a crime prohibit you from passing the info to a client
You only have knowledge of the info because it is contained in privileged docs which have been mistakenly disclosed to you
What to do where duty of conflidentiality conflicts with duty of disclosure
Must not act for A in sit where A had adverse interest to B, and B is current or former client for whom you hold confidential info which is material to A in that matter, unless:
- Effective measures have been taken which result in no real risk of disclosure of the confidential info: or
- B gives informed consent, given or evidenced in writing
Reporting actual or potential ethical breaches
Must promptly report serious breach or any facts or matters which you reasonably believe are capable of amounting to a serious breach
Solicitor may provide info indirectly to firm’s COLP or COFA, on the understanding that they will provide the info to the SRA
Not generally required to check that COLP/COFA has actually made report
BUT poss that if sol considers issue is serious enough, and not satisfied that compliance officer agrees => SRA would require the sol to report the matter to them themselves
