ADVICE Q&A

How to avoid liability amid auditor's probe

In a continuing series, the Law Society's practice advice service offers guidance on frequently asked questions

Q How much should I charge for swearing an oath and is this charge mandatory?

A Section 2 of The Commissioners for Oaths (Authorised Persons) (Fees) Order 1993 states that the following fees 'shall' be charged: 5 for taking an affidavit, declaration or affirmation, for each person making the same and, in addition, 2 for each exhibit or schedule referred to.

Q Does the Law Society issue any guidance on dealing with auditors' enquiries?

A Yes.

Under an agreement made in 1970 between the Law Society and the Institute of Chartered Accountants it was agreed that auditors should not ask solicitors non-specific questions which could expose the firm and its clients to massive liability.

The Society guidance on auditors' enquiry letters was initially published in 1970, it is reviewed periodically, and published (see [2000] Gazette, 16 March, 44-45).

Last year, the Law Society complained to the Auditing Practices Board (APB) about a series of breaches which were occurring throughout the country, and agreed to collate examples of the breaches which were sent to the APB.

The APB has indicated that it wishes to review the 1970 agreement and the Society is currently awaiting developments.

At present, the Society continues to recommend that solicitors do not answer the catch-all type questions and the 1970s guidance still remains (see [2001] Gazette, 21 June, 8).

Q Can I represent my client in the Crown Court on committal for sentence?

A The 1972 practice direction 1 ALLER 608 allows defence solicitors in criminal proceedings to appear in the crown court on appeal from the magistrates' court or on committal for sentence in the Crown Court, if the solicitor or a member of his firm appeared on behalf of the defendant in the magistrates' court.

Solicitors also have a right of audience in civil proceedings which are on appeal from the magistrates' court, if the solicitor or a member of his firm appeared in the magistrates' court proceedings.

There are also special exemptions for solicitors practising in Bodmin and Truro in Cornwall.

Q My client has requested a remuneration certificate, and the bill has been paid in full by way of deduction from monies received on account.

Is he still entitled to a certificate?

A Yes.

If a solicitor deducts his costs from monies held on account and the client objects in writing to the amount of those costs within the 'prescribed time' (three months or lesser time specified by the solicitor which cannot be less than one month), the solicitor must immediately inform the client in writing of his right to obtain a remuneration certificate or to apply for assessment.

The client then has one month in which to ask the solicitor to apply for a remuneration certificate.

If a solicitor wishes to speed up the process, he should send the necessary information to the client with the bill.

The client then has one month from that time to ask the solicitor to apply for a certificate.

Q My client is abroad on business and urgently needs to swear an affidavit for use in court proceedings here.

Can I send the affidavit to him for swearing abroad?

A Yes.

He can swear it before any person who has authority to administer an oath in that place section 3(1) of the Commissioners for Oaths Act 1889.

Alternatively, section 6 (as amended) of that Act empowers every British ambassador, envoy, minister, and consul, and other officials exercising their functions abroad, to administer oaths there.

Q Is after-the-event insurance mandatory in conditional fee cases?

A No.

However, the solicitors' costs information and client care code 1999 requires solicitors in all cases to discuss with clients whether the purchase of after-the-event insurance is advisable.

Furthermore, in matters where a conditional fee agreement is being entered into, under regulation 4(2)(e) of the Conditional Fee Agreement Regulations 2000, legal representatives must inform, explain and advise on whether they consider any particular method of financing the costs of litigation is appropriate.

You should note that some after-the-event insurers require solicitors who are on their panels to take out after-the-event insurance in all conditional fee agreement cases.

It is important that solicitors make it clear to their clients that they are not acting as brokers.

Q I have issued a gross sum bill to my client.

He has now requested a further detailed breakdown.

Must I supply this?

A In contentious matters, where a solicitor has issued a gross sum bill, the client may request a detailed breakdown of costs in lieu of the original bill within three months of receiving the bill.

This does not apply if the solicitor has issued proceedings for payment of the bill or if the costs are subject to a contentious business agreement (see section 64 (2) of the Solicitors Act 1974).

However, you might wish to explain to your client that his request has the dramatic effect of cancelling the original gross sum bill.

If when going through your file you consider you did not include all of your costs in the original bill, you are free to draw up a bill for the higher amount.

The position differs in non-contentious matters as the client has the right to ask for a remuneration certificate (see article 4 of the Solicitors' (Non-Contentious Business) Remuneration Order 1994) if he is unhappy with the amount charged.

In this case, the solicitor is not obliged to provide a further detailed breakdown after providing a gross sum bill.

If the client wishes to receive a further breakdown, the solicitor can make a charge for the further work involved as long as the client is informed in advance of this additional cost.

Q Does the Law Society have any information on computer software for solicitors?

A Yes.

This April the Law Society sent a copy of the fourth edition of its Software Solutions Guide to all partners in firms with 10 partners or fewer, and to the senior partner of larger firms.

The aim of the guide is to help firms select software packages suitable for their needs.

The suppliers featured in the guide have all passed rigorous vetting by the Society selection panel in terms of product strategy, financial health and feedback from existing users of their systems.

The guide is currently on the Society Web site www.it.lawsociety.org.uk or can be purchased (10) from the Law Society bookshop at 113 Chancery Lane London WC2A 1PL (tel: 020 7320 5640).

This column is compiled by the Law Society's practice advice service.

Comments should be sent to Nasrin Master, Practice Advice Service Manager, the Law Society, 113 Chancery Lane, London WC2A 1PL.

The service endeavours to ensure that the information provided is correct but does not accept liability for error or omission.

This publication is intended for information purposes only and should not act on the basis of the information provided alone.