Podcast
Questions and Answers
What is the primary reason firms prioritize maintaining client relationships?
What is the primary reason firms prioritize maintaining client relationships?
- To encourage staff loyalty.
- To exceed regulatory compliance.
- To prevent clients from seeking services from competitors. (correct)
- To simplify administrative tasks.
According to the SRA Code of Conduct for Solicitors, what is the overarching principle that a solicitor must uphold regarding client interests?
According to the SRA Code of Conduct for Solicitors, what is the overarching principle that a solicitor must uphold regarding client interests?
- To act in accordance with the solicitor's own financial interests.
- To act in the best interests of each client. (correct)
- To maintain a professional distance from clients.
- To avoid potential conflicts of interest at all costs.
What should a solicitor do to ensure clients can make informed decisions?
What should a solicitor do to ensure clients can make informed decisions?
- Give information in a way clients understand and ensure they are in a position to make informed decisions. (correct)
- Rely solely on the client's understanding of legal jargon.
- Provide complex legal documents without explanation.
- Limit the amount of information to avoid overwhelming the client.
What is the correct understanding of a solicitor's responsibility regarding client matters?
What is the correct understanding of a solicitor's responsibility regarding client matters?
According to the SRA Code of Conduct for Solicitors, what is expected regarding the continuous development of a solicitor's skills?
According to the SRA Code of Conduct for Solicitors, what is expected regarding the continuous development of a solicitor's skills?
What must a solicitor do to ensure a proper level of service is provided by those they supervise?
What must a solicitor do to ensure a proper level of service is provided by those they supervise?
What information about the services provided must a solicitor convey to the client?
What information about the services provided must a solicitor convey to the client?
What is the solicitor's obligation regarding regulatory protections available to clients?
What is the solicitor's obligation regarding regulatory protections available to clients?
What information should a solicitor provide to a client to enable them to make an informed decision about legal services?
What information should a solicitor provide to a client to enable them to make an informed decision about legal services?
What is a recommended practice for solicitors regarding fees, and what should they avoid doing?
What is a recommended practice for solicitors regarding fees, and what should they avoid doing?
A solicitor quotes an hourly rate to a client but forgets to mention VAT. If the client is liable to pay the bill, how will the price be interpreted?
A solicitor quotes an hourly rate to a client but forgets to mention VAT. If the client is liable to pay the bill, how will the price be interpreted?
When discussing the potential outcomes of a matter, what should a solicitor consider?
When discussing the potential outcomes of a matter, what should a solicitor consider?
What are the solicitor's obligations when sending a client care letter?
What are the solicitor's obligations when sending a client care letter?
Under what circumstances would a contract with a solicitor fall under the definition of an 'off-premises' contract according to the Consumer Contracts Regulations?
Under what circumstances would a contract with a solicitor fall under the definition of an 'off-premises' contract according to the Consumer Contracts Regulations?
What is the key distinction between 'contentious' and 'non-contentious' business for solicitors, and when does contentious business begin?
What is the key distinction between 'contentious' and 'non-contentious' business for solicitors, and when does contentious business begin?
A client seeks advice from a solicitor regarding suing their previous firm for negligence. The solicitor suggests sending a letter before action, giving the firm seven days to offer compensation. If the firm makes an acceptable offer before proceedings are issued, how will the solicitor's work be classified?
A client seeks advice from a solicitor regarding suing their previous firm for negligence. The solicitor suggests sending a letter before action, giving the firm seven days to offer compensation. If the firm makes an acceptable offer before proceedings are issued, how will the solicitor's work be classified?
What is hourly rate
?
What is hourly rate
?
A solicitor agrees to complete work for a client for a fixed fee. If the work turns out to be more expensive than initially expected, can the solicitor alter the fee?
A solicitor agrees to complete work for a client for a fixed fee. If the work turns out to be more expensive than initially expected, can the solicitor alter the fee?
In what specific types of proceedings is a solicitor prohibited from entering into a Conditional Fee Agreement (CFA)?
In what specific types of proceedings is a solicitor prohibited from entering into a Conditional Fee Agreement (CFA)?
Under a Damages-Based Agreement (DBA), what is the maximum amount a solicitor can receive, including VAT, from the sums ultimately recovered by the client in a personal injury case?
Under a Damages-Based Agreement (DBA), what is the maximum amount a solicitor can receive, including VAT, from the sums ultimately recovered by the client in a personal injury case?
A solicitor agrees to accept shares in a new company in return for their work rather than costs. What additional step should the solicitor advise their client regarding this arrangement?
A solicitor agrees to accept shares in a new company in return for their work rather than costs. What additional step should the solicitor advise their client regarding this arrangement?
Under what circumstance may a solicitor terminate a retainer in contentious business if the client does not pay money on account?
Under what circumstance may a solicitor terminate a retainer in contentious business if the client does not pay money on account?
What must a solicitor do if they require money on account before starting work in a non-contentious matter?
What must a solicitor do if they require money on account before starting work in a non-contentious matter?
Which of the following is NOT a formal requirement for a solicitor's bill to be valid for payment?
Which of the following is NOT a formal requirement for a solicitor's bill to be valid for payment?
A solicitor wishes to bill a client for work done on the client's file over several months in a protracted litigation case and wants to be able to sue for none payment if this happens. What type of interim bill should a solicitor use?
A solicitor wishes to bill a client for work done on the client's file over several months in a protracted litigation case and wants to be able to sue for none payment if this happens. What type of interim bill should a solicitor use?
In a non-contentious matter, when can a solicitor begin charging interest on an unpaid bill, assuming the client has been given notice of their right to challenge the bill?
In a non-contentious matter, when can a solicitor begin charging interest on an unpaid bill, assuming the client has been given notice of their right to challenge the bill?
Under what extraordinary circumstances can a solicitor commence a claim to recover costs from a client sooner than one month after delivering the bill?
Under what extraordinary circumstances can a solicitor commence a claim to recover costs from a client sooner than one month after delivering the bill?
Within what timeframe must a client apply to have a solicitor's bill assessed by the court without needing the court's permission?
Within what timeframe must a client apply to have a solicitor's bill assessed by the court without needing the court's permission?
When a bill is assessed by the court, on what basis are the costs assessed?
When a bill is assessed by the court, on what basis are the costs assessed?
What should solicitors ensure regarding clients complaints?
What should solicitors ensure regarding clients complaints?
Rex has just received a final bill from his solicitor in respect of a partnership dispute that was resolved without issuing proceedings. Rex thinks the bill (£7,000 plus VAT) is too high. Assuming that the bill complies with the relevant formalities, what TWO immediate options are available to Rex to challenge the bill?
Rex has just received a final bill from his solicitor in respect of a partnership dispute that was resolved without issuing proceedings. Rex thinks the bill (£7,000 plus VAT) is too high. Assuming that the bill complies with the relevant formalities, what TWO immediate options are available to Rex to challenge the bill?
Under a non-contentious business agreement, how can a solicitor be remunerated?
Under a non-contentious business agreement, how can a solicitor be remunerated?
In instances where a solicitor has complied with relevant provisions under s 57 Solicitors Act 1974, can the client apply to court to assess a bill?
In instances where a solicitor has complied with relevant provisions under s 57 Solicitors Act 1974, can the client apply to court to assess a bill?
What type of fee arrangement is prohibited from inclusion in a contentious business agreement?
What type of fee arrangement is prohibited from inclusion in a contentious business agreement?
What action must a costs officer take if they reduce the amount of a solicitor's bill by more than 50% in a non-contentious matter?
What action must a costs officer take if they reduce the amount of a solicitor's bill by more than 50% in a non-contentious matter?
According to paragraph 4.1, what is a solicitor obliged to properly account to a client for and what's is included in the financial benefit
term?
According to paragraph 4.1, what is a solicitor obliged to properly account to a client for and what's is included in the financial benefit
term?
A solicitor refers a client to a tax consultant and receives a commission. What are the acceptable ways for the solicitor to properly account for this financial benefit to the client?
A solicitor refers a client to a tax consultant and receives a commission. What are the acceptable ways for the solicitor to properly account for this financial benefit to the client?
In the case of Reynolds v Stone Rowe Brewer [2008] EWHC 497 (QB), what principle did it establish regarding costs estimates provided by solicitors?
In the case of Reynolds v Stone Rowe Brewer [2008] EWHC 497 (QB), what principle did it establish regarding costs estimates provided by solicitors?
Which of the following scenarios represents a blatant breach of Principle 7 (acting in the best interests of the client) and Principle 5 (acting with integrity)?
Which of the following scenarios represents a blatant breach of Principle 7 (acting in the best interests of the client) and Principle 5 (acting with integrity)?
How could a solicitor show accounting to a client for a financial benefit
How could a solicitor show accounting to a client for a financial benefit
A solicitor advises a wealthy client to invest in a highly speculative and risky venture in which the solicitor holds a significant undisclosed stake. The client loses a substantial amount of money due to the venture's failure. Which of the following principles is MOST severely violated?
A solicitor advises a wealthy client to invest in a highly speculative and risky venture in which the solicitor holds a significant undisclosed stake. The client loses a substantial amount of money due to the venture's failure. Which of the following principles is MOST severely violated?
A solicitor's firm implements a policy of automatically adding a 15% 'administration fee' to all client bills without explicitly informing clients about this fee in their initial engagement letters, nor is it transparently itemized on the bills. The firm argues that this fee covers necessary overhead costs and is standard practice. Which overarching ethical principle is MOST compromised by this practice?
A solicitor's firm implements a policy of automatically adding a 15% 'administration fee' to all client bills without explicitly informing clients about this fee in their initial engagement letters, nor is it transparently itemized on the bills. The firm argues that this fee covers necessary overhead costs and is standard practice. Which overarching ethical principle is MOST compromised by this practice?
Flashcards
Client Care
Client Care
The minimum standard of service a client can expect from a solicitor as per the Code of Conduct.
Informed client decisions
Informed client decisions
A solicitor must give clients understandable information, enabling them to make informed decisions.
Definition of 'Costs'
Definition of 'Costs'
The costs amount to include solicitor's fees and disbursements.
Information about legal costs
Information about legal costs
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Client Care Letter
Client Care Letter
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Conditional Fee Agreements (CFAs)
Conditional Fee Agreements (CFAs)
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Money on account
Money on account
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Solicitor's bill
Solicitor's bill
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Contentious Business
Contentious Business
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Commissions and secret profits
Commissions and secret profits
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Right to Challenge Bill
Right to Challenge Bill
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Non-contentious business agreements
Non-contentious business agreements
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Contentious business agreements
Contentious business agreements
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Overcharging
Overcharging
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Study Notes
Client Care and Costs
- The chapter is about acting honestly and with integrity in providing legal services, maintaining trust, showing service, and handling assets.
- The legal services market is competitive
- Firms spend a lot on advertising, making client retention through outstanding service essential.
Introduction
- Addresses client care, cost information, client letters, Consumer Contract Regulations 2013, fee structures, and billing matters.
Client Care
- Solicitors must meet minimum service standards, acting in the client's best interest.
- Solicitors should not exploit their position or mislead clients.
- The Code isn't strict on client care systems; standards vary based on the practice and clients.
- Solicitors are required to give understandable information to clients, enabling informed decisions about services and options.
Level of Service
- Service must be competent and timely.
- Solicitors must maintain current skills and knowledge.
- Competence involves considering the client's characteristics and needs.
Responsibilities
- Solicitors and clients each have their responsibilities which should be clearly defined at the outset.
- Solicitors should keep clients informed and seek instructions.
- Clients should update solicitors on relevant changes.
- Limitations imposed by third parties, like insurers, should be explained.
Competence and Supervision
- Solicitors must be knowledgeable in current law to serve clients effectively.
- Solicitors need to ensure those they supervise are competent, and stay updated on ethical and regulatory obligations.
- Managerial solicitors are accountable for supervised work.
Information on Regulation
- It must be ensured that clients know how and if services are regulated, including the protection of the SRA Compensation Fund.
- The SRA is the principal regulator, with the FCA involved sometimes.
Information About Costs
- Clients need complete legal service cost information to make informed decisions.
- Clients should be given the best, most accurate pricing info initially and as things progress
- Costs include fees and disbursements defined in the SRA Glossary.
- An accurate cost estimate must be provided while taking care, or it will be binding.
Costs in Litigation
- Solicitors should discuss potential outcomes of litigation and justify expenses to the client
- This includes the risk of paying the other party's fees.
- Legal expenses insurance should be considered.
Client Care Letter
- A good amount of information must be communicated to clients at the start
- Some data is required by the SRA, other rules, and good practice
- It's prudent to provide all client care information in writing as a letter because it can show compliance with the Code and Principles
Consumer Contracts Regulations 2013
- Solicitors must comply with the Consumer Contracts Regulations 2013, which apply to contracts with clients
- The requirements vary if its on or off the solicitor's premises.
- For contracts that are off-premises, client must know they can cancel it without reason within 14 days
- Solicitors should make sure their letters have any additional info if the contracts may vary
Fees and Costs
- The solicitor and client must agree on fees at the start of the retainer
- The way a solicitor is remunerated, and fees are restricted is by the SRA
- Restrictions vary according to the work type
- There is a distinction between contentions and non-contentious businesses
Contentious and Non-Contentious Business
- Contentious business involves court or arbitrator proceedings, starting once proceedings are issued.
- Non-contentious business does not involve court
- Non-contentious business is governed by the Solicitors' (Non-Contentious Business) Remuneration Order 2009.
Options for Solicitors' Fees
- Solicitors may charge a fee for work done in different ways. Solicitors must make sure that any arrangement is legal and the client is fully informed.
- Hourly rates are a common way to charge
- Fixed or variable fees are other available options
Conditional Fee Agreements (CFAs) and Damages-Based Agreements (DBAs)
- Agreements allowed by law are Conditional Fee Agreements (CFAs) and Damages-Based Agreements (DBAs).
- A CFA can have the client agree to charge nothing if they lose, but they pay their fees plus any agreed upon uplift if they win
- DBA is when the solicitor's fee is an agreed percentage of the damages if a client recovers damages
- The solicitor must carry out risk assessment to calculate success fee
- Lawyers cannot carry out a CFA for criminal or family proceedings
SRA Transparency Rules
- The SRA Transparency Rules also require that certain costs are included in their publications
- Solicitors may enter a contingency fee arrangement in respect of non-contentious work, but to be enforceable this must be in the form of a non-contentious business agreement
Other Methods
- A solicitor may agree to be remunerated by alternative means, e.g., shares in a company
Money on Account
- Requiring money on account is standard, but in contentious business, a solicitor may need the client to pay a reasonable costs sum.
- The solicitor can end the retainer if it isn't paid in a reasonable time, but there's no such legal right in non-contentious business
The Solicitor's Bill
- Certain legal forms must be followed for a solicitor to obtain payment from the client. The bill must contain enough information for the client to be satisfied that the bill is reasonable, and also provide information of the period that the bill relates to
- It must be signed by a solicitor or employee
- Delivery by hand or post is required unless email is agreed
Interim Bills
- A solicitor can bill the client before things are done, especially if things are going to go on for a while
- Law Society recommends that this be expressly reserved
- Interim bills come in 2 types:
- Interim 'statute bills' follow all rules per the Solicitors Act 1974.
- 'Bill on account' that are payment requests toward the final bill.
Interest on Bills
- Solicitors may charge interest on an unpaid bill one month after being delivered
- The rate of interest charged must be less than the rate of payable judgment debts, at 8%
Enforcement
- Subject to certain exceptions, a solicitor may not commence a claim until a month has passed
- The High Court has the power to allow the solicitor to commence a claim against their client within a month
Client Right to Challenge Bill
-Client may call into question the solicitor's bill.
- Client must comply with specific requirements
- There are certain options available to challenge the bill
Assessment by the Court
- Clients may have the bill assessed, sometimes referred to as 'taxed'.
- These assessments should be done within one month
- If this is not done, the client may still apply to the court, but it may take a leave of court
Non-Contentious Proceedings
- When assessing a solicitor's bill in a non-contentious proceeding, the court must consider:
- The matter's complexity
- Skill/knowledge used
- Time spent
- Number of documents prepared
- Place of transaction
- Value of any money
- Any land involved
- How important the issue is to the client
Contentious Proceedings
- When considering whether a bill is reasonable for contentious proceedings, the court must take into account:
- the conduct of parties
- money involved
- complexity
- how important this is to anyone involves
- effort, any knowledge and responsibility
Using the Firm's Complaints Procedure
- Clients must be informed of their right to complain in writing
- Inform the client the right to contact the Legal Ombudsman should the client not be satisfied with the firm's response
Non-Contentious Business Agreement
- A solicitor and client may form a non-contentious business agreement
- This must follow the Solicitors Act 1974
Contentious Business Agreements
- Solicitors may enter into a controversial business agreement, however remuneration by a contingency is not an option
- The agreement must state it is a contentious business agreement, be in writing, be signed by the client and contain all the terms.
Overcharging
- Solicitors must act in the client's best interests
- Solicitors must show integrity
- Cost officers have to inform the SRA if they lower more than half the costs on a non-contentious matter
Commission
- The solicitor client relationship is a fiduciary
- 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
- Any commission, discount or rebate are considered a financial benefit
Summary Points
- Service provided has to be satisfactory
- Be responsible and address all concerns
- Make sure to inform the client properly on charges
- Don't use any form of misleading statements
- Communication has to be clear
- Distinctions are made in controversial and non-controversial matter
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