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Professional Conduct In Plp Notes

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PLP CONDUCT ISSUES
Issue
Principle
Can buyer's 4 solicitor also act for the seller?

Can buyer's solicitor also act for the lender?

Can seller deal with more than one buyer?

Undertakings

SDLT reduction by increasing fixtures/fittings cost?

4 2

2, 6

1, 2, 6

Outcomes

3.5; 3.6 - general position is that they can't due to the risk of conflict except where the parties have a substantially common interest and
(a)-(d) have all been met

3.5; 3.6 - general position is that they can't due to the risk of conflict except where the parties have a substantially common interest and
(a)-(d) have all been met

11.3 - Seller's solicitor must immediately inform each prospective buyer's solicitor that the seller intends to conduct a contract race having first obtained seller's consent to do so (to comply with O 4.1). If the seller refuses to give such consent, his solicitor must immediately cease to act in the matter.
Avoid if possible

11.2 - Must be performed within agreed timescale of within a reasonable amount of time

Indicative Behaviours

3.14; 3.11; 3.3; 3.4 - Acting for both is indicative of not achieving the outcome; declining to act where the interest in the end result is not the same; declining where there is a need to negotiate on matters of substance (e.g. price); declining where there is unequal bargaining power.

3.3; 3.7 - should decline to act if may need to negotiate on 'matters of substance' on clients' behalf (N/A
if standard mortgage); definition of a standard mortgage

11.5 - firm must have an effective system to record when they are given/discharged

Substantially Common Interest - A clear common purpose regarding a matter, a strong consensus on how it is to be achieved and the client conflict is peripheral to that common purpose

Solicitor could argue that O 3.6 applies - cheaper and benefits outweigh risks
Definitely okay for title investigation stage but could be more difficult later
The Code of Conduct does not prohibit contract races but sets strict rules.

Undertaking - A legal promise to (not) do something which is enforceable in court.
Failure to comply is professional misconduct
Binding even if it is to do something out of your control - DO NOT UNDERTAKE
If a firm is aware that contents value is inflated to reduce SDLT band, this will be a potential fraud on HMRC
If the client insists on pursuing this strategy, the firm should cease to act.

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