Question of ethics

Q I act for a landlord whom was intending to renew a lease to a long-standing tenant.

My usual practice is to ask the tenant's solicitor for an undertaking to pay my costs, and this was done.

The parties then fell out and the tenant has withdrawn from the transaction.

And I have almost fallen out with the tenant's solicitor.

I have done much work on the draft lease and I think I am right to ask for my costs in accordance with the undertaking.

The tenant's solicitor says I am not, though he accepts that his client halted the transaction.

Who is right please?

A That depends on the wording of the undertaking.

If this was simply to pay your costs, then the undertaking was discharged when the tenant withdrew.

The tenant's solicitor would only have an ongoing liability if there was a suitable provision in the undertaking, for example to pay your costs irrespective of whether the transaction was completed (see principle 18.15, note 1(a) on page 357 of the the Guide to the Professional Conduct of Solicitors (1999, eighth edition).

Please note

After an initial consultation paper on new rules for dealing with conflict and confidentiality issues, a further consultation document has been prepared.

This will be the last opportunity to comment on these important rules and their guidance, which will affect all solicitors and their firms.

The consultation period ends on the 6 December 2002.

The consultation document can be accessed at: www.lawsociety.org.uk and go to view all contents A-Z/Rules Review: consultation: Proposed rules and guidance of conflict and confidentiality, or in printed form from Professional Ethics (0870 606 2577).

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.