Ethics and Professional Conduct – 4ed (2024) Chapter 1 Ethics and Regulation

• Solicitors are expected to meet high ethical standards reflected in how the profession is regulated
• Professional conduct includes rules and regulations that solicitors must comply with
• Solicitors must comply with the laws of the country and also face additional requirements

Topics Covered

• Ethics
• Solicitors Regulation Authority
• Complaints
• Legal Ombudsman
• Breach of professional conduct
• Solicitors Disciplinary Tribunal
• Powers of the court
• Negligence
• Solicitors Compensation Fund

Ethics

• The Law Society states: "The commitment to behaving ethically is at the heart of what it means to be a solicitor."
• Ethics includes moral principles and values that govern people's behaviour
• Behaviour can be unethical without being illegal
• Solicitors must follow ethical principles that apply to everyone
• Solicitors have additional ethical obligations and society expects higher standards of ethical behaviour from them
• Client confidentiality may mean that a solicitor is not under the same obligation to report a crime as a member of the public
• Particular expectations for solicitors arise due to their special relationship with clients and the justice system
• If a solicitor acts unethically, it affects the justice system as a whole, with the result that public trust in that system declines
• The focus today is on the consequences of behaviour where the ethical approach is the one which produces the best outcome
• Core standards have to be applied, along with flexibility, personal judgment, consideration for the individual facts of the case
• Ethics include the regulation of the profession and ethical values and behaviours are embedded

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
• Rules are contained in the SRA Standards and Regulations
• Those regulated by the SRA must comply with these Standards and Regulations, and the SRA may exercise its powers to take action against those who fail to do so

Key Elements of the SRA Standards and Regulations

• The SRA Principles 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') sets out the standards of professionalism required from the individuals authorised by the SRA to provide legal services
• The SRA Code of Conduct for Firms sets out the standards and business controls expected of firms (including sole practices) authorised by the SRA to provide legal services
• 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 details specific requirements placed on solicitors in financial matters, in particular when dealing with money belonging to clients or third parties
• The SRA Glossary contains all the defined terms from the Codes, Rules and Regulations
• The SRA issues Guidance to supplement the SRA Standards and Regulations from time to time
• 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 being imposed by the SRA
• The SRA focuses on behaviour or breaches which it considers to be serious
• The SRA is entirely separate from the Law Society

Complaints

• Complaints from some clients about the legal service they have received are inevitable
• Dealing with all complaints appropriately is part of delivering a professional service
• The Code of Conduct for Solicitors contains specific requirements in respect of complaints handling
• Complaints can be from 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
• 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:
  • Their right to complain about the solicitor's services and charges
  • How complaints may be made and to whom, and
  • Any right they have to make a complaint to the Legal Ombudsman and when they can make such complaint
• Under the SRA Transparency Rules, information about complaints procedures must be published on a firm's website, or be made available on request if the firm has no website (see 3.3.3.4).
• Many complaints will be resolved using the firm's own complaints procedure, and a dissatisfied client should use this procedure first, before taking more formal action
• When a client has made a complaint, and if this has not been resolved to the client's satisfaction within eight weeks following the making of a complaint, the solicitor must ensure that the client is informed in writing:
  • 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
  • If a complaint has been brought and the complaints procedure has been exhausted
    • That the solicitor cannot settle the complaint
    • The name and website address of an alternative dispute resolution (ADR) approved body which would be competent to deal with the complaint
    • Whether the solicitor agrees to use the scheme operated by that body
• Clients' complaints must be dealt with promptly, fairly and free of charge

Legal Ombudsman

• The Legal Ombudsman for England and Wales ('LeO') deals with complaints made against solicitors, barristers, legal executives, licensed conveyancers, notaries and patent attorneys
• The LeO will usually be the first point of contact for a client with a complaint about their solicitor or the legal service they have received
• The client does not have to suffer any loss for the LeO to make a determination against the solicitor arising from a complaint about the services provided
• Certain types of client can complain to the LeO, including individuals, 'micro-enterprises', charities, clubs, and personal representatives
• The complaint must relate to an act/omission by the solicitor and must relate to the services which the solicitor provided
• Ordinarily, the complainant cannot use the LeO unless the solicitor's own complaints procedure has been used, but can do so if:
  • The complaint has not been resolved to the complainant's satisfaction within eight weeks of being made to the solicitor
  • The LeO considers that there are exceptional reasons to consider the complaint sooner, or without it having been made first to the solicitor
  • The LeO considers that in-house resolution is not possible due to irretrievable breakdown in the relationship between the solicitor and the complainant
• 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 for complaint.
• When the LeO accepts a complaint for investigation, it aims to resolve it by whatever means it considers appropriate, including informal resolution
• If the LeO considers that an investigation is necessary, both parties will be given an opportunity to make representations
• A hearing will be held only where the LeO considers that the complaint cannot be determined fairly without one
• A 'determination' will then be made and sent to the parties and the SRA, with a time-limit for response by the complainant
• The LeO's determination may direct the solicitor to: (a) apologise; (b) pay compensation; (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; (f) limit the solicitor's fees
• The determination may contain one or more of the above directions and there is a limit of £50,000 on the total value that may be awarded in respect of compensation and costs
• If the complainant accepts the determination, it is binding on the parties and final
• On receiving a complaint which discloses any alleged professional misconduct on the part of the solicitor, the LeO will inform the SRA

Breach of Professional Conduct

• 'Professional misconduct' primarily concerns breaches of the SRA's Principles and/or the Codes of Conduct
• 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
• The role of the SRA is to protect the public
• They will investigate the allegation and inform the individual or firm about whom the allegation has been made and their employer
• The SRA has the power, to serve a notice on a solicitor requiring the delivery of a file or documents in the possession of the solicitor to the SRA
• The powers of the SRA following a finding of professional misconduct depend upon the subject of the complaint
• The SRA may impose sanctions (intended to discipline the individual) or controls (intended to protect the public)
• The SRA may take no further action with or without issuing advice or a warning about future conduct
• The maximum financial penalty for solicitors is £25,000
• The SRA may impose conditions on, or suspend, a solicitor's practising certificate, or make an order to control the person's activities in connection with legal practice
• In some cases, the SRA refers alleged misconduct to the Solicitors Disciplinary Tribunal
• The SRA makes its regulatory decisions public

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
• The SDT is independent of both the Law Society and the SRA
• The SDT has power to make rules governing its procedure and practice and the SRA maintains a panel of solicitors that prosecute applications before the SDT on its behalf
• An application to the SDT must be made in the prescribed form, supported by evidence
• The decisions of the SDT are called 'Judgments' and 'Orders', with detailed written Judgment made available to the parties, the Law Society and on the SDT website after the hearing

Powers of the SDT according to Section 47 Solicitors Act 1974

• Striking a solicitor off the roll
• Suspending a solicitor from practice or imposing restrictions upon the way in which a solicitor can practise
• Imposing an unlimited fine payable to HM Treasury
• Reprimanding the solicitor
• 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
• The court has jurisdiction to discipline the solicitor in respect of costs within any matter before the court
• The court may order the solicitor to 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 LeO and the SRA have no power to adjudicate upon issues of negligence in a legal sense as they are not courts
• There may be an overlap between negligence and complaints about professional services
• In addition to or instead of the actions that the SRA or Legal Ombudsman may take, a solicitor may be sued by their client in the tort of negligence
• 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 and notify relevant persons that they may have such a claim accordingly
• In circumstances where the client notifies the solicitor of their intention to make a claim, or where the solicitor discovers an act or omission which might give rise to a claim, consideration must be given as to whether a conflict of interests has arisen and/or whether the client should be advised to obtain independent advice

SRA Compensation Fund

• The SRA Compensation Fund is maintained by the SRA and 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
• It is funded by mandatory contributions by all solicitors and SRA-authorized bodies
• Payment may be made from the Fund when a client has suffered loss as a result of a defaulting practitioner's act or omission or to cover claims against uninsured firms.
• Individuals/organisations are not automatically entitled to a grant from the Fund
• The Fund does not pay out sums of more than £2 million per claim unless the SRA is satisfied that there are exceptional circumstances in the public interest that justify a higher sum
• Where payment is made from the Fund, the SRA will seek to be subrogated to the rights of the applicant and can therefore 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