5 Practical Things You Need To Know In Private Client Practice Today
1. Changes to the Legal Ombudsman’s remit
From 1 February 2013 the Legal Ombudsman is now allowed to award compensation of up to £50,000 when dealing with complaints against legal suppliers. Complaints can be received from prospective customers who could reasonably have expected to receive a service or who were unreasonably offered a service they did not want. The time limits for accepting a complaint have also increased to six years from the date of the act or omission and three years from the date the complainant should reasonably have known there were grounds for complaint.
The SRA Code of Conduct does require firms to inform clients in writing at the outset of the matter of their right to complain and how to do so (Outcome 1.9) and firms should advise clients, again in writing, both at the commencement and conclusion of the firm’s complaints procedure, of their right to complain to the Legal Ombudsman. I am sure from my own observations that some firms have not updated their client care letters and terms of business to show the correct address for the Legal Ombudsman which is of course now PO Box 6806, Wolverhampton WV1 9WJ telephone 0300 555 0333; email: firstname.lastname@example.org
2. Vulnerable clients and the SRA
Do you have a ‘vulnerable client base’? According to the Solicitors Regulation Authority (SRA) firms will have a vulnerable client base if their work includes immigration, mental health, elderly clients and crime. Circumstances can expand this to include “anyone who is socially, mentally or physiologically vulnerable”. The SRA’s Director for Risk, Samantha Barrass, says, “We can all become vulnerable depending on the circumstances and what happens to us. But the responsibility for judging whether your client base is vulnerable is the firm’s own.” [Solicitors Journal 28 February 2012].
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The SRA’s approach to regulation is now “outcomes-focused and risk-based, so that clients receive services in a way that best suits their needs.” One of the suggested ways of achieving the outcomes of the Code (known as indicative behaviour) is that you must have proper regard to the client’s mental capacity or other vulnerability when taking instructions and during the course of the retainer – IB 1.6.
Another is to provide information on fee arrangements “in a clear and accessible form which is appropriate to the needs and circumstances of the client” – IB 1.19.
The cost of any adjustments to your standard information cannot be passed on to the client but your standard terms and conditions may well need tailoring, for example by being printed in large type or having an audio version.
3. Effect of Equality Act 2010 on private client advice
From 1st October 2010 the Equality Act replaced major parts of the Disability Discrimination Act 2005 and all of the Disability Discrimination Act 1995 in England, Wales and Scotland.
It is not just client care letters which may need to be altered and tailored to each client, but also how you charge for the matter as a whole. If you charge on a time basis for a matter and it takes longer to complete the matter due to more lengthy meetings because of the client’s specific needs, can you charge for this “extra” time? This is a grey area and very difficult to get right in practice.
A disabled person has rights to protect them from discrimination which come from the Equality Act 2010 and the United Nations Convention on disability rights. You are defined as ‘disabled’ under the Equality Act if you have a physical or mental impairment that has a ‘substantial’ and ‘long-term’ effect on your ability to do your normal daily activities. Addiction to non-prescribed drugs or alcohol is not included within this. This definition is narrower than the SRA’s view of vulnerable clients but it is important to bear in mind your obligations under the Equality Act.
The Equality Act prohibits discrimination against disabled people (inter alia) in the areas of employment, education, access to goods, services and facilities and buying and renting land or property. Section 20 of the Equality Act imposes a duty to make reasonable adjustments when providing services. You will be considered to have discriminated against a disabled person if you do not make reasonable adjustments so that the disadvantage to the disabled person is removed.
Reasonable adjustments include changing how a service is provided, making changes to the built environment and providing auxiliary aids and services (such as a sign language interpreter). The costs for making the majority of these adjustments cannot be passed on to the disabled person although it is not clear who should pay for a sign language interpreter.
Complying with the Equality Act must be remembered when considering dealing with vulnerable clients and it is not just relevant to clients visiting the office but also when you visit clients outside the office, such as in their home or in a care-home.
4. Guidance for 3rd party management of another’s funds
A long term project of the Law Society is the first universal framework for banks and building societies to adopt a consistent approach when helping relatives or carers who need to manage an account on behalf of another person who is elderly, vulnerable or unable to manage their own affairs – see the Law Society’s Press release
for 3 April 2013 page to obtain the link to the download for the guidance.
The guidance will help banks and building society staff to recognise and understand Lasting Powers of Attorney, Deputyship Orders and other third party management arrangements.
5. Presumption of Death Act 2013
The Act gained Royal Assent on 26 March 2013. It introduces a new court-based procedure which will enable those left behind when someone goes missing to obtain a declaration from the High Court that the missing person is deemed to have died. The Court will be able to make that decision if satisfied that the missing person is dead or is not known to have been alive for a period of at least seven years. The decision will be linked to the register of death and the certificate will be conclusive and effective for all purposes and against all persons.
The Act was needed because the law in England & Wales did not have a single certificate procedure for such situations (unlike Scotland and Northern Ireland).
The Act is anticipated to produce about 30 – 40 declarations per year and make it easier for families to resolve various financial and administrative difficulties which arise.
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