Regulation of Relationship between Professional Third Parties

A. Solicitors

i. Dealings between Solicitors

a. The Underlying Relationship

The Law Society Guide 1999 required a solicitor to deal with other solicitors with ‘frankness and good faith consistent with his or her overriding duty to the client.’¹⁰² The idea of frankness between solicitors was, however, problematic because it sug­gested a requirement of complete candour in all circumstances.

The SRA Code of Conduct contains no material that explicitly sets the tone of rela­tionships between solicitors. Other solicitors are therefore presumably to be treated as third parties for the purposes of Chapter 11.01. This means that, in common with other third parties, they must not be taken unfair advantage of.

¹⁰¹ Vernon v Bosley (No 2) [1997] 1 All ER 614 (CA) and ch 19: ‘Advocacy’.

¹⁰² Taylor, The Guide to the Professional Conduct of Solicitors (n 49) rr 17.03 and 19.01.

¹⁰³ A Boon ‘Cooperation and Competition in the Handling of Disputes and Transactions’ (1994) 1(1) International Journal of the Legal Profession 109.

ii. Undertakings

The fundamental importance of solicitors honouring their promises was apparently so obvious that the Solicitors’ Practice Rules 1990 mentioned undertakings several times in, but contained no specific obligation to perform them. This was rectified in the Guide 1999 in Chapter 18, ‘Professional Undertakings’. The chapter defined an undertaking as ‘ any unequivocal declaration of intention addressed to someone who reasonably places reliance on it’ made by solicitors or their staff in the course of practice or by a solicitor not in the course of practice.^[2107]

The nature of an undertaking was further defined by the chapter.

If a solicitor gave an undertaking, however, they were obliged to carry it out even if the circumstances in which they could do so was beyond their control.^[2113] Therefore, before giving their undertaking, they had to be sure that they would be in a posi­tion to honour it. Unusually, the chapter reinforced the obligation by stating that ‘[a] solicitor who fails to honour an undertaking is prima facie guilty of professional misconduct’.^[2114] One exception was where the solicitor was in breach of an undertak­ing to the court. Only the court has power to enforce such undertakings and no other disciplinary action would normally be taken.^[2115]

The definition of undertakings changed for the purposes of the Solicitors’ Code of Conduct 2007. They were defined as ‘a statement made by you or your firm to someone who reasonably relies upon it, that you or your firm will do something or cause something to be done, or refrain from doing something’.^[2116] Other requirements remained the same. Therefore, undertakings could be given to anyone, not just to other solicitors. They could be oral or in writing. Rule 10.05 continued the require­ment to fulfil an undertaking in the course of practice or outside it. Undertakings endured for as long as the solicitor remained on the roll, and could not be unilaterally withdrawn.

Among the principles in the current SRA Handbook, the second, acting with integrity, seems particularly relevant to honouring undertakings. The SRA Code of Conduct, Chapter 11, has an outcome that undertakings are performed ‘within an agreed timescale or within a reasonable amount of time’.^[2117] Directly relevant indica­tive behaviours include maintaining an effective system of recording when undertak­ings are given and when they have been discharged^[2118] and notifying the recipient when it becomes apparent that contingent undertakings, those dependent upon the happening of a future event, will not occur.^[2119] This text seems fairly light, given the weight of material previously developed around the rule. It is an area where consider­able reliance is placed on existing norms.

Although the stern warning about breach of undertaking has been dropped from the Handbook, failure to honour an undertaking would presumably result in dis­ciplinary proceedings against the solicitor. Compensation for losses flowing from breach may be available through the firm’s insurance or the Solicitors’ Insurance Fund (SIF). Compensation for broken undertakings has, in the past, been a consid­erable drain on the SIF. Unsurprisingly the SRA is concerned that undertakings are too easily given by solicitors, and are too vague in scope. Solicitors should ensure that any undertaking given is specific, confirmed in writing and realistic in the sense that it does not promise to do anything not in the solicitor’s absolute control.

iii. Contacting a Represented Opposing Party

Restrictions on solicitors contacting opposing clients were dealt with as an issue relat­ing to lay clients. It is also a breach of professional etiquette in that it is disrespectful to the lawyer the other party has instructed. Finally, such contact also offends the principle of representation around which the legal system is built. The Solicitors’ Code of Conduct 2007 added the clients of licensed conveyancers to those who opposing solicitors should not contact, except with the consent of that solicitor.^[2120] The rules did not prohibit client to client communications or solicitors contacting witnesses.

The guidance clarified the exceptional circumstances that might justify solicitors contacting opposing clients. They were where the other solicitor has failed to commu­nicate or pass on messages to their client. Solicitors were advised that, if the solicitor reasonably considered that the other lawyer or licensed conveyancer was refusing or failing to take instructions or communicate requests or correspondence to their client, then a warning should give them the opportunity to object if an incorrect conclusion had been drawn. Following this, and no objection being received, direct contact could be attempted.^[2121]

Guidance to the 2007 rule also covered the situation where a solicitor represented corporate clients. It suggested that, where an employee was designated by the com­pany as the person responsible for giving instructions, a solicitor could contact other employees of the company directly. The guidance warned that such a course could be hazardous. First, it may involve a breach of client confidentiality. Second it may put the employee in an invidious position, such as being asked to disclose confidential information about their employer. The guidance suggested that such contact should not be made without advising the employer, or their legal representative, so that they could seek advice about whether to allow the contact.^[2122]

The current SRA Code of Conduct contains an indicative behaviour in Chapter 11, ‘Relations with Third Parties’, to the effect that solicitors meet the outcomes by not communicating with other parties who have retained lawyers, unless the lawyers con­sent or in exceptional circumstances.^[2123] It is not obvious which outcome this helps to meet, unless it is not treating third parties unfairly. A, possibly semantic, point in relation to this is that simply contacting someone does not necessarily involve treating them unfairly. Perhaps this is why ‘not contacting’ is an indicative behaviour.

iv. Reporting other Solicitors

Luban relates an incident in 1977 in which a partner in a firm and senior lawyer in the United States, ‘an upright and courtly man’, lied to an opponent to conceal discover­able documents, perjured himself to conceal the lie and, upon confessing the truth, resigned his job and spent a month in prison.^[2124] The relevance of this is the reaction of the associate who worked for the partner concerned. He

saw [the partner] lie and really couldn’t believe it. And he just had no idea of what to do. I mean, he... kept thinking there must be a reason. Besides what do you do? The guy was his boss and a great guy.

Luban attributes the complicity of the associate to the ambiguity of the ABA’s model rule which permitted a subordinate lawyer to defer to a senior lawyer’s reasonable resolution of an arguable question of professional duty. He argues that it is also the product of working in a large organisation where lines of responsibility are confused and ambiguous, resulting in gradual desensitisation to these issues. Whereas these would once have been compelling reasons for silence on such issues, the climate is arguably more conducive to the disclosure of wrongdoing within legal organisations than it once was.

In England and Wales disciplinary ‘whistle-blowing’ is not only allowed under the Public Interest Disclosure Act 1998, it is encouraged. The Solicitors’ Code of Conduct 2007, Rule 20.04 required a solicitor to report any serious misconduct by another solicitor including, if a principal in the firm, misconduct by an employee of the firm. Any conduct involving dishonesty, deception or amounting to a serious, arrestable offence amounts to serious misconduct. There was also a duty to report if there is ‘reason to doubt the professional integrity of a solicitor’ or that a firm is in serious financial difficulty which could put the public at risk. An employee could be reported to another employee, or to the principal or other director of the firm, on an anonymous basis.^[2125]

The rule was subject ‘where necessary’ to the reporting solicitor’s client’s consent.

In the current SRA Code of Conduct, solicitors have a reporting obligation. It comprises a duty to report promptly to the SRA serious misconduct by any autho­rised person or firm, or any employee, manager or owner.^[2127] The duty to consult clients about such steps has been replaced by a requirement to take into account the duty of confidentiality to clients. This, obviously, is another relaxation of the obliga­tions to clients.

B. Relationships with Barristers

The significance of the relationship between solicitors and barristers was reflected in the Law Society Guide 1999, which devoted a chapter to relations with the Bar and professional agents. The content was, however, relatively thin, with the main principles confined to stressing the duty to pay fees, even when the solicitor was not put in funds by clients, and challenging counsel’s fees.^[2128] There were only two specific issues dealt with. One covered situations when it was necessary to attend with counsel in court. The other specified that solicitors’ obligations were not abrogated by instructing counsel.^[2129]

Guidance stated that solicitors had a duty to brief appropriate counsel.^[2130] They were advised to check that counsel’s advice did not contain any ‘obvious errors’. As noted above, the common law went further than this by requiring solicitors to exercise their own judgement on counsel’s advice. This raised the interesting possibility of solicitor and counsel presenting differing advice to the client. This is a position that only the client can resolve by deciding whose advice to accept. It opened the way, how­ever, to the possibility of a later action against the lawyers if something went wrong.

Relationships with barristers did not feature as such in the 2007 Rules or the SRA Code of Conduct. Some of the earlier principles were rules of etiquette that had been overtaken by events. For example, the principle that solicitors had personal responsi­bility to pay barristers’ fees was no longer needed because it had become possible for barristers to enter binding contracts for fees. Nevertheless, a lot of abandoned advice and guidance remained good practice.

An example of still relevant guidance on managing relationships with barristers referred to attendance in court. In routine criminal cases it was not uncommon for barristers to return briefs at a late stage so that a substitute had to take over at the last minute. While this could happen in civil cases, it appeared to be less common. In such cases it is usually desirable for a solicitor to attend court with the substitute barrister in order to protect the interests of the client. Provision of competent assistance for advocates was, however, increasingly seen as expensive ‘double manning’.

The growth of solicitor advocacy and the economics of practice weakened the practice of solicitors attending court with barristers.¹²⁸ The Law Society’s transitional advice in the Guide was that ‘careful judgement’ was required before a solicitor decided not to attend court. It suggested various situations where attendance was desirable. For example, where a client was a juvenile, or was handicapped in some way, or was a ‘difficult character’ or where a substantial sentence of imprisonment is likely.¹²⁹ This advice still represents good practice, particularly in situations where barristers do not know clients well.

IX.