Preamble Rules dated 10 March 2007 commencing 1 July 2007 made under Part II of the Solicitors Act 1974 and sections 9 and 9A of the Administration of Justice Act 1985 with the concurrence of the Master of the Rolls under sections 32 and 33A of the Solicitors Act 1974, section 9 of the Administration of Justice Act 1985 and paragraph 16 of Schedule 22 to the Legal Services Act 2007, the concurrence of the Lord Chancellor under paragraph 16 of Schedule 22 to the Legal Services Act 2007 and the approval of the Secretary of State under Schedule 4 to the Courts and Legal Services Act 1990, regulating the conduct of solicitors and their employees, registered European lawyers and their employees, registered foreign lawyers, and recognised bodies and their managers and employees. Rule 1.01 Justice and the rule of law You must uphold the rule of law and the proper administration of justice. 1.02 Integrity You must act with integrity. 1.03 Independence You must not allow your independence to be compromised. 1.04 Best interests of clients You must act in the best interests of each client. 1.05 Standard of service You must provide a good standard of service to your clients. 1.06 Public confidence You must not behave in a way that is likely to diminish the trust the public places in you or the legal profession. Guidance to rule 1 – Core duties General 1. A modern just society needs a legal profession which adopts high standards of integrity and professionalism. Lawyers, law firms and those who work in them serve both clients and society. In serving society, you uphold the rule of law and the proper administration of justice. In serving clients, you work in partnership with the client making the client's business your first concern. The core duties contained in rule 1 set the standards which will meet the needs of both clients and society. The core duties apply to solicitors, registered European lawyers (RELs), registered foreign lawyers (RFLs), recognised bodies, managers and employees of recognised bodies, and employees of recognised sole practitioners. 2. The core duties perform a number of functions: o (a) They define the values which should shape your professional character and be displayed in your professional behaviour. o (b) They form an overarching framework within which the more detailed and context-specific rules in the rest of the Code can be understood, thus illuminating the nature of those obligations and helping you to comply. o (c) The core duties can help you to navigate your way through those situations not covered in the detailed rules, as no code can foresee or address every ethical dilemma which may arise in legal practice. o (d) The core duties are fundamental rules. A breach may result in the imposition of sanctions. 3. Where two or more core duties come into conflict, the factor determining precedence must be the public interest, and especially the public interest in the administration of justice. Compliance with the core duties, as with all the rules, is subject to any overriding legal obligations. 4. It will be a breach of rule 1 if you permit another person to do anything on your behalf which would compromise or impair your ability to comply with any of the core duties. Justice and the rule of law – 1.01 5. You have obligations not only to clients but also to the court and to third parties with whom you have dealings on your clients' behalf - see in particular rule 10 (Relations with third parties) and rule 11 (Litigation and advocacy). Integrity – 1.02 6. Personal integrity is central to your role as the client's trusted adviser and must characterise all your professional dealings – with clients, the court, other lawyers and the public. Independence – 1.03 7. "Independence" means your own and your firm's independence, and not merely your ability to give independent advice to a client. Examples of situations which might put your independence at risk include: o (a) finance agreements/loans to your firm with particular strings attached; o (b) finance arrangements which suggest dependency upon an outside body, such as could, at that body's discretion, effectively put your firm out of business; o (c) contractual conditions in agreements with referrers of business or funders which effectively cede control of your firm to the outside body; o (d) granting options to purchase your interest in your firm for nominal value; o (e) allowing a third party access to confidential information concerning your clients; o (f) a relationship with an outside body which is not at arm's length, and/or which suggests that your firm is more akin to a part of or subsidiary of that body, rather than an independent law firm; o (g) fee sharing arrangements which go beyond what is allowed under rule 8.02; o (h) any arrangement for a third party to fund legal actions which lays constraints on the conduct of the matter which go beyond the legitimate interests of a funder. See also rule 3 (Conflict of interests) and rule 9 (Referrals of business). Best interests of clients – 1.04 8. You must always act in good faith and do your best for each of your clients. Most importantly, you must observe: o (a) your duty of confidentiality to the client - see rule 4 (Confidentiality and disclosure); o (b) your obligations with regard to conflicts of interests - see rule 3 (Conflict of interests); and o (c) your obligation not to use your position to take unfair advantage of the client – see 10.01 (Not taking unfair advantage). Standard of service – 1.05 9. You must provide a good standard of client care and of work, including the exercise of competence, skill and diligence. Disciplinary action will not always follow where breaches of this duty are minor and isolated. Public confidence – 1.06 10. Members of the public must be able to place their trust in you. Any behaviour within or outside your professional practice which undermines this trust damages not only you but the ability of the legal profession as a whole to serve society. Introduction Rule 2 is designed to help both you and your clients understand each other's expectations and responsibilities. In particular, the purpose of 2.02 (Client care) and 2.03 (Information about the cost) is to ensure that clients are given the information necessary to enable them to make appropriate decisions about if and how their matter should proceed. Under rule 5 (Business management) a recognised body, a manager of a recognised body and a recognised sole practitioner must effect supervision and put in place management arrangements to provide for compliance with rule 2. The rule does not apply to your overseas practice but you must comply with 15.02. Rule 2.01 Taking on clients (1) You are generally free to decide whether or not to take on a particular client. However, you must refuse to act or cease acting for a client in the following circumstances: o (a) when to act would involve you in a breach of the law or a breach of the rules of professional conduct; o (b) where you have insufficient resources or lack the competence to deal with the matter; o (c) where instructions are given by someone other than the client, or by only one client on behalf of others in a joint matter, you must not proceed without checking that all clients agree with the instructions given; or o (d) where you know or have reasonable grounds for believing that the instructions are affected by duress or undue influence, you must not act on those instructions until you have satisfied yourself that they represent the client's wishes. (2) You must not cease acting for a client except for good reason and on reasonable notice. 2.02 Client care (1) You must: o (a) identify clearly the client's objectives in relation to the work to be done for the client; o (b) give the client a clear explanation of the issues involved and the options available to the client; o (c) agree with the client the next steps to be taken; and o (d) keep the client informed of progress, unless otherwise agreed. (2) You must, both at the outset and, as necessary, during the course of the matter: o (a) agree an appropriate level of service; o (b) explain your responsibilities; o (c) explain the client's responsibilities; o (d) ensure that the client is given, in writing, the name and status of the person dealing with the matter and the name of the person responsible for its overall supervision; and o (e) explain any limitations or conditions resulting from your relationship with a third party (for example a funder, fee sharer or introducer) which affect the steps you can take on the client's behalf. (3) If you can demonstrate that it was inappropriate in the circumstances to meet some or all of these requirements, you will not breach 2.02. 2.03 Information about the cost (1) You must give your client the best information possible about the likely overall cost of a matter both at the outset and, when appropriate, as the matter progresses. In particular you must: o (a) advise the client of the basis and terms of your charges; o (b) advise the client if charging rates are to be increased; o (c) advise the client of likely payments which you or your client may need to make to others; o (d) discuss with the client how the client will pay, in particular: (i) whether the client may be eligible and should apply for public funding; and (ii) whether the client's own costs are covered by insurance or may be paid by someone else such as an employer or trade union; o (e) advise the client that there are circumstances where you may be entitled to exercise a lien for unpaid costs; o (f) advise the client of their potential liability for any other party's costs; and o (g) discuss with the client whether their liability for another party's costs may be covered by existing insurance or whether specially purchased insurance may be obtained.