The professional ethics guidance team tackles a wide range of issues, from money laundering to conflict rules, explains Peter Williamson




One of the busiest places you will find at the Solicitors Regulation Authority (SRA) is the professional ethics guidance team at 11am when the lines open. The torrent of calls that comes in on a vast range of subjects never ceases to amaze me.



‘What are my obligations if I think my client might be involved in benefit fraud?’ ‘Does the ambiguous wording on an undertaking mean my client might have to pay up for a failed transaction?’ ‘What if the police want to interview me about my client and what about my duties of client confidentiality?’



Typically, an adviser might take ten such varied calls within their first half hour on duty, and they usually end with sincere thanks from the solicitors who feel clearer about exercising their professional judgement.



So how does this much-valued service fit into the regulatory framework? It seems self-evident that a regulator should support compliance by helping solicitors understand the rules. Solicitors who seek advice are more likely to comply with their professional responsibilities, and their concerns about what they need to do to meet regulatory requirements are eased. A regulator’s duty is to encourage and support compliance, not to set traps to catch people out.



There has been debate about the extent to which the guidance service should be confidential. The SRA’s policy is that unless there is a significant risk to clients or the public interest, calls to the guidance team are treated confidentially. Solicitors are free to identify themselves or not. In reality, where solicitors inform the team of any breach of the rules, they are encouraged to rectify the position. In the main, solicitors calling the helpline want to comply and are not looking for ways to get round

the rules.



We recognise that solicitors face complex ethical situations and a good regulator must provide general, and sometimes specific, guidance at these times. However, this cannot extend to giving legal advice.



This issue has come to the fore over money laundering legislation and regulations. Many firms’ money laundering reporting officers use the guidance service to help with this complex area. But these queries often run quickly into a need for legal advice on detailed points of the legislation.



The SRA remains committed to providing guidance on the professional conduct obligations arising from money laundering regulations, but we cannot – indeed must not – offer legal advice. Our colleagues at the representative Law Society will be able to fill this gap, and see this as an opportunity to support their members. We have formed a joint working party to make sure that any service offered to the profession by the Law Society will complement rather than duplicate ours.



The guidance service also helps us with a useful snapshot of the issues that are causing most concern to solicitors. Our analysis of calls received last year shows that the biggest single category of enquiries was about the conflict rule. This was closely followed by enquiries about accounts rules and then confidentially issues. With more than 70,000 calls received each year, we can be pretty sure that this is an accurate reflection of what is concerning the profession. This feeds back into the development of better rules and guidance training.



The service will face one of its biggest challenges as the guidance team gears up for the introduction of the new code of conduct. A programme of training for the advisers is just about to begin to meet the anticipated increase in calls. If the Lord Chancellor signs off the code this month, it will – at last – come into force on 1 July.



So what changes do we expect will cause most scratching of heads? Fortunately, the code is underpinned by the six core principles set out in rule 1. These take precedence over all the remanding rules. I hope that the clarity of the new rule 1 will help solicitors focus on their primary professional obligations. No doubt the six principles will become the new mantra for the guidance team.



The new rules relating to conflicts of interest and the duties of confidentiality and disclosure are already in force, having been fast-tracked ahead of the rest of the code. The guidance team is already familiar with telling callers that the new information barriers cannot cure a conflict, and that when duties of confidentiality and disclosure come into conflict, then the duty of confidentiality prevails.



The new business management rules are one of the biggest areas of change and will affect all firms. These place high-level management responsibilities on partners, who will be required to make arrangements for the effective management of the firm as a whole. However, these rules do not prescribe the detail of these arrangements, so we expect that in many ways firms will have more freedom in meeting their obligations.



l To contact the professional ethics guidance service, tel: 0870 606 2577. Calls are charged at national rates and the hours are Monday to Friday, 11am to 1pm and 2pm to 4pm.



Peter Williamson is chairman of the Solicitors Regulation Authority’s board