Professional Conduct Issues

Question 1

Can solicitors’ accepts gifts of significant value from clients?

Answer 1

There is no specific rule against accepting gifts from clients, but a solicitor needs to make a judgment call

This issue relates to the solicitor’s obligation to act with independence:
- It is arguable that a solicitor who receives a generous / significant gift compromises their independence

This issue also relate to acting in the best interests of the client:
- If other clients are aware of generous gifts accepted, they may wonder whether the cliient receives preferable treatment

Question 2

What obligation does a solicitor have to advise a client on funding?

Answer 2

Relevant if instructions ask you to consider initial conduct points having taken initial instructions from a client:

Solicitors are under a duty to advise a client on our costs of advising and representing them

Client will need/want to know (litigation costs):
- that there is no guarantee of success
- the risks of not being awarded costs
- if unsuccessful, they may be ordered to pay the other side’s costs
- legal fees on litigation are difficult to predict and can escalate
- discuss whether the benefits of bringing a claim outweigh the potential cost and award

Need to consider if we can act on this basis and make it clear what our fees will be

Question 3

Duty to give competent advice in a timely manner

Answer 3

If there is reference in instructions to a timing of an application / step in the process / procedural deadline –> consider the relevance of this time

• Is there an urgency for the client to bring a claim (e.g., Grant was obtained five months ago, and an IPFDA claim must be brought in 6 months of this)
• Advise a client on any deadlines / time constraints for bringing a particular claim
• Advise that if we act for the client, we cannot delay and the client needs to be prepared to respond quickly to any questions

Question 4

Conflicts or risks of conflicts of interest

Answer 4

Conflict of interest is a situation where separate duties to act in the best interests of two or more clients in the same or related matter conflict

• E.g., should not advise a director of a company (where company is the client) on the suitability of a new service contract - as the director’s interests may conflict with the company’s
• The firm’s client is the company (not an individual director)
• Would advise the director to obtain legal advice from another firm

Question 5

Issues which can arise in BORP (Insolvency)

Answer 5

• Advise a director (client) on issues with voidable transactions and wrongful trading
• Advise a client on the steps a director needs to take when Company is at risk of / facing insolvency (every-step defence)

If director is proposing a voidable transaction (e.g., transaction at an undervalue)
- Advise them on the risks and SANCTIONS of this if a liquidator brings a claim
- Advise that they would need to seek independent legal advice on this transaction