Care Proceedings Divide Parents


Our regular column tackles some of the major ethical issues facing solicitors



Q A law firm has been asked to act for Mr and Mrs Smith in connection with care proceedings. Mr Smith has been charged with indecent assault and is awaiting trial, although the firm is not instructed in these matters. Mr Smith is intending to plead not guilty and Mrs Smith says that she believes her husband is innocent. Can the firm agree to act for both parents?



A No. There is likely to be a conflict between the two clients. Even though Mrs Smith says she believes her husband to be innocent, the criminal charges against him mean that the advice that the firm should be giving her as regards her best chance of succeeding in the care proceedings is fettered by the fact that the solicitors also have a duty to act in his best interests. The firm cannot therefore act for both parties.





Q A solicitor is normally employed by J Bloggs & Co, but for the past three months the lawyer has been on secondment to a client company, working in its legal department. In this guise, the solicitor has been instructed by the company to negotiate a know-how agreement with X, who is also a client of the lawyer's law firm and for whom he has acted in the past. Does the lawyer have a problem in doing the work for the company?



A It depends. The first point to consider is whether the solicitor has confidential information concerning X that is material to this particular matter. If so, then the continuing duty of confidentiality owed to X in respect of that information cannot be reconciled with the duty of disclosure owed the company. Therefore, the solicitor would have to cease acting on this matter, unless he can agree with the company to vary his duty of disclosure. It would only be reasonable to do this provided the nature of the information does not undermine the lawyer's ability to act in the best interests of the company.

If the solicitor does not have material confidential information, then he can act, but he needs to keep the matter under review.

When returning to the law firm, the solicitor will need to consider whether he has any confidential information as a result of the secondment that is material to another client of the firm. If so, the duty of confidentiality owed the company means that the solicitor cannot disclose the information either to clients of the firm or to other fee-earners in the firm and therefore he would not be able to act for those clients.

In addition, if the interests of the company and the firm's client were adverse (see rule 16E(4) of the solicitor conduct rules), the solicitor and his firm would have to put in place safeguards in accordance with 16E(5) or (6) to ensure that the information is protected. If the interests were not adverse, the lawyer could still not act for the firm's client in view of his duty of disclosure, but the law firm may be able to do so, depending on the nature of the information.





Q A law firm is shortly to convert from a partnership to a limited liability partnership (LLP). What effect, if any, will the conversion have on those matters where different members of the firm are currently holding money as controlled trustees?



A The firm will need to consider each case individually to determine whether, following the conversion, the monies will still be controlled trust monies in accordance with the definition in rule 2(2)(h) of the Solicitors Accounts Rules 1998. Where a partner or employee of the firm has been acting as the sole trustee or executor, those monies will continue to be controlled trust monies following the conversion and will either have to be held in an account in the name of the controlled trustee, or in an account in the name of the LLP. However, monies that have been held by two or more partners, or a partner together with a solicitor employee, will no longer be controlled trust monies, and will have to be held as client money in the name of the LLP (see rule 14(3) of the 1998 rules).



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