QUESTION OF ETHICS

Q We have a recognised body that is a trustee company.

The principals of the partnership are all members of the recognised body and the recognised body only acts as agent for the principals.

Do we need to have the top-up insurance required by rule 13 of the Solicitors' Incorporated Practice Rules 1988?A Yes.

The rules changed on 22 May 2000 to make clear that only nominee companies can claim the exemption fromtop-up cover.

The Society is not convinced that a company which is a trustee is in a position to act only as agent for other persons, as it will owe duties as trustee to the beneficiaries.

Exemption from top-up is now available to a nominee company which can act only as agent for the principals in a partnership, even if only some of the principals own the shares in the nominee company.

Aide Memoirel The new Indemnity Insurance Rules will be effective from1 September 2000.

Solicitors must have their new indemnity insurance in place by that date.

l The Establishment of Lawyers Directive 98/5/EC was implemented in England and Wales on 22 May 2000.

Lawyers from other EU states who are EU nationals and established in the UK have to register with one of the UK Law Societies or Bars.

Lawyers already practising in the UK have until 21 November 2000 to make their applications, unless they wish to take advantage of their new rights under the Directive at an earlier date.

l Question of ethics is compiled by the Law Society's professional ethics guidance team.

Send questions intended for publication to Austin O'Malley, the Law Society, Ipsley Court, Berrington Close, Redditch B98 0TD; DX 19114 Redditch;tel: 020 7242 1222.