Solicitor’s Duties and Obligations

Solicitors have always had a duty to comply with the standards and regulations set by the SRA and on 25 November 2019, the SRA Standards and Regulations (“STaRs”) came into force. STaRs sought to simplify the handbook but also, for the first time, separate an individual solicitor’s personal responsibilities from those of their firm with two distinct Codes of Conduct. This means not only could action be taken against a firm for their failure to comply but also against the individual employee, making individuals personally accountable for compliance.

If you are a solicitor who specialises in commercial litigation/dispute resolution, it is important that you are aware of the onus placed upon you, in particular when advising your client with regards to their legal fees and potential funding/insurance options available.

The Code of Conduct for Solicitors includes the following:

You must give clients information in a way they can understand and ensure they are in a position to make informed decisions about the services they need, how their matter will be handled and the options available to them

You must ensure that clients receive the best possible information about how their matter will be priced and, both at the time of engagement and when appropriate as their matter progresses, about the likely overall cost of the matter and any costs incurred.

In addition to discussing your fee estimate, you should discuss with the client how they might pay for your fees, as well as the protection that may be available to them in respect of the additional liabilities they may face, such as exposure to disbursements and the potential for an adverse costs order.

It is simply not sufficient to provide brief details, or to rely on a mere reference within an engagement letter. Failure to provide such information can result in action being taken by the regulator against both the lawyer and the firm, with the penalties being severe. This also leaves the door open for a potential professional negligence claim, as well as reputational damage.

By instructing a specialist ATE insurance broker, this would ensure that both the firm and the individual have met the standards set out by the SRA and discharged their duties.

The key benefit of having ATE insurance is that it provides the client with financial certainty in the event the claim is unsuccessful as any adverse costs which are ordered by the Court will be covered by the policy. An ATE policy can also cover own disbursements and, in some circumstances, own legal fees.

TheJudge is able to provide a unique service by tailoring insurance arrangements to meet our client’s needs and fee objectives. By using our specialist knowledge and extensive insurance relationships, we can provide a range of options with regards to ATE and other litigation insurance and can also refer clients to our affiliate litigation funding arm, Erso Capital, to discuss any third-party funding requirements.

If you have a claim where you are unsure whether ATE would be financially viable due to its lower value, TheJudge has a fast-tracked market search process, Accelerate, which is specifically designed for commercial litigation and insolvency matters where After the Event insurance cover is required for an indemnity level of £250K or less.

The aim of Accelerate is to afford you and your client the speed and certainty of obtaining ATE through a fast-track arrangement whilst also giving you the peace of mind that you are discharging your duties under the STaRs. We are able to provide an indication of terms for ATE insurance within 24 hours of receiving a short online application. By working only with A-rated insurers that understand the challenges of proportionality, we can, on most occasions, avoid the scenario of all markets declining to offer terms. We will be able to provide you and your client with a competitive non-binding indication of terms, or a selection of terms, for adverse costs and own disbursements cover on a deferred and contingent premium basis.

For further details, please contact Donna Nortcliffe or Kyle Hunter.

Manchester London