Our continuing monthly column, offers advice on ethical issues



Q Ms Smith owns a house. She wants to transfer her property to her son and daughter-in-law, who will then take out a mortgage on the property to build an extension for Ms Smith to live in. All three parties want to instruct the same solicitor. Ms Smith is adamant that this is what she wants, and is happy for the solicitor to act on the basis that he does not give any legal advice in respect of the merits of the transaction. Would it be appropriate for the solicitor to act for all of the parties if he were to limit Ms Smith's retainer in this way?

A The solicitor would be ill-advised to act for all of the parties in these circumstances. There is clearly significant potential for a conflict between the interests of the parties, which would make it inappropriate to use the 'common interest' exception (practice rule 16D(3)(a)). Moreover, Ms Smith is at a disadvantage in relation to her son and daughter-in-law in terms of her age, what she will be giving up, and the extent to which she will be vulnerable if she then fell out with them. She should have an independent solicitor acting for her.

However, if Ms Smith did take independent advice and still wanted the original solicitor to go ahead with preparing the transfer documents, this may be a situation where that solicitor could act for all the parties by limiting the retainer to preparing the documentation and registering the transfer.





Q A solicitor is asked by a husband and wife to act for them in obtaining a divorce. They have come to an amicable agreement as to the grounds on which the petition will be presented and each has agreed to split the costs equally. They do not want advice on the ancillaries, which they have already dealt with. Would it be appropriate for the solicitor to act if he were to limit the retainer so that he would not be advising either party?

A It is never advisable to act for two parties on opposite sides of a potentially litigious situation, even when limiting the retainer. Although the parties have reached a settlement, it may not be a fair settlement in that one of the parties may not have made full disclosure, or, for example, may not have understood an entitlement to take account of the other's pension rights. Moreover, one party may be taking unfair advantage or exercising undue influence over the other.





Q A solicitor acts for a husband in connection with his matrimonial affairs. The husband has threatened his wife on several occasions, as a result of which the wife obtained an order allowing her address not to be disclosed. The wife's solicitors have accidentally disclosed the address, which is a women's refuge, in a copy document they have sent to the husband's solicitor. The solicitor is aware that your client would like to know the address - does he have an obligation to tell him?

A No. Although the solicitor knows that his client would very much like to know his wife's address, in this example it is not material information (see the explanatory notes to practice rule 16E dealing with what is 'material' information) in the sense that it will not affect his decisions or the instructions he gives in relation to his retainer.





Q A solicitor is asked to act for X in buying a property. The lawyer previously acted for Y who wanted to buy the same property some months previously, but the transaction fell through following an adverse survey. X has already told you that he does not intend to get his own survey. The solicitor has tried to contact Y to obtain his consent to disclose the information to X, but without success. Clearly, the solicitor has material information that he cannot disclose, but would it be open to him either to continue acting if X agreed to varying the duty of disclosure, or for the solicitor to pass X to a colleague who was not aware of the material information and who, therefore, had no duty to disclose it under practice rule 16E(3)?

A Neither option would be appropriate in these circumstances. That is because the information is fundamental to the ability of the firm to act in the client's best interests, since it goes to the heart of whether or not the client would proceed with the transaction if he knew the information.





Q A solicitor acts for X in connection with an employment law issue concerning X's employer. The employer's lawyers have informed X's solicitor that no other employee has previously complained about the employer's conduct. A colleague of X's solicitor at the law firm has recalled that two years ago he acted for a client in a dispute with the same employer that was subsequently settled. While the subject matter of that dispute was completely unrelated to the current client's complaint, it is relevant as regards the issue of the employer's credibility. However, X's solicitor cannot trace the former client to obtain his consent to waiving confidentiality. Again, there is clear material information, but could X's solicitor pass the client on to a colleague in these circumstances?

A X's solicitor has material information that he has a duty to disclose to the client under practice rule 16E(3). Therefore, the solicitor cannot continue to represent X. The question to consider is whether it would be appropriate for one of the solicitor's colleagues who is not aware of this information to do this.

This is one of the rare circumstances where it may be possible to this course of action. Although the information would clearly assist the client, its non-disclosure would not affect the client's interests. It does not in any way undermine the client's position, in that the information is not central to the client's case and does not affect the ability of the firm to act in the best interests of the client, nor would it affect the advice that the firm gives to the client. However, X's solicitor would need to explain to the client why he was not able to continue to act and get the client's consent before passing the file to someone else in the firm.



This column is compiled by the Law Society's professional ethics guidance team. Send questions for publication to Austin O'Malley, the Law Society, Ipsley Court, Berrington Close, Redditch B98 0TD; DX 19114 Redditch