Professional Conduct Notes

REGULATING THE PROFESSION

P = principle

O = outcome

IB = indicative behaviour

TP = third party

ATP = authorised TP

O8.3 – Prohibits unsolicited telephone calls to a member of the public or approaching them in person

BUT DOES NOT prohibit E-mails

• It is acceptable to contact existing or potential professional and/or business connections

[Chapt 14 – definition of the public does not include former clients or other law firms]

TP suggests they refer clients to you:

P3 – Do not allow your independence to be compromised

P4 – Must act in clients best interests

O9.1 – Your independence and professional judgement must not be prejudiced by the arrangement

O9.2 – Your client’s interests must be protected regardless of the interests of the TP

O9.3 – You clients must be in a position to make informed decisions about how to pursue the matter

O9.4 – Your clients must be informed of any financial/other arrangement the TP has in referring clients to you

• And any relevant fee sharing arrangement O9.5

IB9.9 – Check whether clients are being pressurised to use you or told they have no choice

• A suggestion is acceptable a compulsion is not

• Make sure that TP is not acquiring clients as a result of activities which would be contrary to the code

• (e.g. cold calling)

TP asks to have access to client information or correspondence between:

04.1 – Do not disclose any information to the TP without the clients consent

Financial arrangement with TP:

P2 – Must act with integrity

P3 – Do not allow your independence to be compromised

P4 – Must act in clients best interests

O9.1 – Your independence and professional judgement must not be prejudiced by the arrangement

O9.2 – Your client’s interests must be protected regardless of the interests of the TP

O9.3 – You clients must be in a position to make informed decisions about how to pursue the matter

O9.4 – Your clients must be informed of any financial/other arrangement the TP has in referring clients to you

• And any relevant fee sharing arrangement O9.5

O9.7 – Any financial arrangement must be in writing

O10.8/O10.9 – If requested you make the arrangement available for inspection by the SRA

O1.15 – Account for any financial benefit you receive

It is not specifically mentioned in the code who should inform the client of the arrangement (Whether it be you or the TP) BUT:

IB9.5 – You should draw client’s attention to any payments you make in connection with TP’s

• It is advisable to do this before they come and see you

IB9.6 – information given to client should be in writing, clear and appropriate to clients needs (not compulsory as long as the O’s above are met.

Referring clients to a TP:

P2 – Must act with integrity

P3 – Do not allow your independence to be compromised

P4 – Must act in clients best interests

O6.1 – Your recommendation must be in best interests of the client and must not compromise your independence

O6.2 – Clients must be fully informed of any financial or other interest you have in the referral

O6.3 – Must be satisfied client are in position to make informed decision about how to pursue their matter

IB6.2 – In relation to mortgages, if the TP is tied to one source of product rather than a range then must inform client of this limitation before recommending them to the TP

You do not need to account to client for any financial benefit received as a result of your instructions

IB1.20 – when your firm receives a financial benefit as a result of acting for a client you may:

1. pay it to the client

2. offset it against your bills

3. keep it when it is justified (told the client the amount and they agreed)

RELATIONSHIPS WITH CLIENTS

Clients must be informed of the following:

O1.7 – Whether and how the services you provide are regulated + how this affects the protection available to them.

O1.9 – Clients must be informed in writing at outset of right to complain and how to complain

O1.10 – Clients must informed in writing at time of engagement and at conclusion of complaints procedure and;

• Their right to complain to the Legal Ombudsman

• The time frame for doing so

• Full details of how to contact the Legal Ombudsman

O1.13 – Clients must be informed at time of engagement and as matter progresses as to likely overall costs

O1.12 – Ensure client sin position to make informed decisions about services they need, how matter handles and options available

O1.14 – Clients must be informed of right to complain about bill + circumstances when liable to pay interest on it

Code doesn’t say this must be done at start of a matter

Relationships with prospective clients:

Verify the client’s identity:

• 1 govt doc which verifies name and address (or dob) or 1 govt doc for each

If client is a politically exposed person then enhanced due diligence means gets senior management approval and take additional steps to identify source of wealth and funds

• Must always carry out identity checks on directors

• Only need to carry out identity checks on shareholders who control more than 25% of shares

• Must always carry out identity checks on trustees

• Only need to carry out identity checks on beneficiaries with vested interest in 25% of trust capital (contingent and income interests are irrelevant)

Matters sensible to include in letter following first meeting:

IB1.1 – Level of service to be provided (e.g. type and frequency of communication)

IB1.2 – Your responsibilities and those of the client

IB1.3 – Names and status of persons dealing with the matter and who is supervising

IB1.4 – Explain relevant fee sharing or referral arrangements

IB1.5 – Explain if appropriate conditional fee arrangement and public funding

IB1.12 – Need to balance benefits to be obtained against costs of litigation + possible liability for opponents costs

IB1.13 – Are potential outcomes going to justify expense or risk (including paying opponents costs)

IB1.14 – Clear explanation of your costs that includes professional charges and:

IB1.15 – Disbursements and;

IB1.16 – Whether client’s legal insurance covers fees...

Buy the full version of these notes or essay plans and more in our Professional Conduct Notes.