Solicitors Code of Conduct - changes to conflicts of interest and confidential information rules
The deadline for responses to the Solicitors Regulation Authority’s second consultation on changes to Rule 3 (Conflicts of Interest) and Rule 4 (Confidential Information) of the Solicitors’ Code of Conduct is 12 February 2010.
The SRA believes that the current Rules are not sufficiently flexible to provide for the needs of sophisticated users of legal services and has invited views on the draft changes and whether they achieve a balance between meeting clients’ needs and dealing with the potential risks so that clients and the public are protected. Subject to the outcome of the consultation, the SRA has indicated that it intends to amend the current Rules without “undue delay”.
The draft new Rules set out the situations in which it would be possible for firms to act for sophisticated clients notwithstanding a conflict of interest. Firms would need to ensure that proper safeguards were in place and that they had kept adequate records so that they could demonstrate compliance with the Rules.
This article looks in more detail at:
•What is proposed by the SRA
•The measures which firms will have to take, including the obtaining of fully informed consent from each client and agreeing in advance what will happen in the event that a firm can no longer act for both clients
•The areas of risk for law firms under a revised Rule 3, pursuant to which teams of solicitors within the same firm are likely to find themselves negotiating against each other
•The likely approach of the courts and the SRA, who will doubtless insist upon evidence that an ultimately aggrieved client fully appreciated the possible ramifications when agreeing to retain a firm in a situation of actual or potential conflict
This article first appeared in Law-Now, CMS Cameron McKenna's free online information service, and has been reproduced with their permission. For more information about Law-Now, please go to www.law-now.com.