Good Practice

Conduct and service

To terminate - or not to terminateA question that frequently perplexes solicitors is when and whether they can terminate their retainers if they consider things are going wrong.

It's a sensible thing to consider, because if the relationship between a solicitor and client is deteriorating, it is likely that it will only get worse once that essential element of trust has disappeared.

If it does continue to deteriorate, the end result could be a complaint - if that is not already the case.Such were the circumstances in a matter that came to the attention of the Office for the Supervision of Solicitors (OSS) and then made its way to the Legal Services Ombudsman.Principle 12.12 of the Guide to the Professional Conduct of Solicitors, 1999, eighth edition governs this issue.

It sets out that a solicitor must not terminate a retainer except for good reason and upon reasonable notice.The usual instances that would be regarded as 'good reason' are when a solicitor would be in breach of some rule of conduct if he continued to act; where he is unable to obtain clear instructions or, which is a frequent event, there is a serious breakdown of confidence so there is no longer a satisfactory solicitor/ client relationship.

Failure to make a requested payment on account of costs in a contentious matter would also be regarded as 'good reason', but in a non-contentious matter would only be regarded as such if a payment on account of costs (as opposed to disbursements) was made a condition of instructions being accepted.In this case, the client had instructed the solicitors to appeal against a decision of his university to exclude him.

The solicitors had advised that it was only possible to try to mitigate the penalty, not to overturn it.

However, the client refused to accept the advice.

In fact, an appeal had been lodged and a hearing set.

Two days before the appeal date the solicitors terminated their retainer on the grounds that, since the client wouldn't accept their advice, they could no longer represent him.

The OSS considered that, while there were reasonable grounds for termination, it was not reasonable for that to be done only two days before a scheduled hearing date.

Such a late termination had inevitably caused stress and worry to the client, who was awarded compensation of 150 - an award endorsed by the ombudsman.

The view was that the solicitors should have turned up at the appeal, if only to ask for the hearing to be adjourned.l Every case before the adjudication panel is decided on its individual facts.

These case studies are for illustration only and should not be treated as precedents.

Risk management

Motivating managementHow do you motivate your staff? If you're a partner, head of department or have any supervisory responsibilities, then you've got a great opportunity every day to influence the way your people work, and how they feel about their work.If, on the other hand you are an assistant, trainee or paralegal, you still have a major contribution to make to the way your team or department runs.It's a clich, but negative attitudes do transmit themselves to others.

Think about how you respond when people come to you with a new idea or suggestion.

Do you shoot it down immediately ('we haven't got time for that; it's too difficult; we haven't got the resources')? Or do you give it some genuine thought before replying? If it's the former, don't be too surprised if your staff stop bringing you solutions to problems.

They already know what the answer will be.Are you always moaning about the job, the conditions you work under and the lack of understanding or information you get from management, junior staff or clients? This will encourage others to adopt the same attitude.

If you believe you are unappreciated or overworked, then take positive steps to sort things out.

If you carry on complaining without acting, nothing will change.How does this apply to risk management? Well, if you are negative, if you ignore office procedures or if you openly criticise colleagues, whether senior or junior, you cannot blame other staff for behaving in the same way.

By your behaviour, you may be encouraging them to take dangerous short-cuts.

And you may be creating a culture in which it becomes more difficult to identify problems and improve ways of working as a team.'Office culture' is something that we often talk about in risk management.

Does your office have a culture which enables staff to speak freely, to voice disagreement with new procedures, and to own up to mistakes without fearing a disproportionate response? Or have you got a culture of secrecy, of silent resentment and of hidden dissatisfaction? If this is the prevailing atmosphere, your best attempts to set up systems will be sabotaged.

No wonder nobody is following the office manual on client care letters - they see no point in telling you that the letters don't work.

Why did no one tell you that Ms X had phoned up several times complaining about the service she'd received? Because they were too frightened to tell you about it.

Worse still, perhaps they felt indifferent to the matter; 'it's not my problem'.Encourage your staff to believe that they have an important role to play in the practice, and to understand that claims will affect the profitability of the business as a whole.

Risk management is everyone's business.

Every member of the practice should be a risk manager for their own work, on a daily basis.

Make sure they have the information and education to do this, and create a culture in which initiative thrives.l This column was prepared by the St.

Paul risk management team.

QUESTION OF ETHICSQ A former client has notified me that he wants to make a claim against me in respect of some litigation which was unsuccessful.

I'm confident I did nothing wrong and I have reported the matter to my indemnity insurers as I am required to do.

I don't think I have to tell my client the name of my insurers although my client says I do.

Who is right?A Your client is right.

The Solicitors Indemnity Insurance Rules 2001 contain a new requirement under rule 46 that firms must give details of their qualifying insurers to any person who asserts a claim against the firm.

The information which has to be given is the insurer's name and address and the relevant policy number.

The rule also allows the Law Society to give the name of a firm's insurers to a person asserting a claim against the firm if, for example, a firm refuses to comply with its obligations.Please noteThe Solicitors' Publicity Code 2001 replaced the Solicitors' Publicity Code 1990 on 16 November 2001.

It also repealed practice rule 11 (Names used by a firm).

The new code requires all firms to put 'regulated by the Law Society' on their notepaper.

Practitioners can postpone this until 1 January 2003 but only if they continue to comply with the 1990 code and the old practice rule 11.

l Question of ethics 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; tel: 020 7242 1222.