I am writing to clarify how practice rule 6(3) applies to the situation described by Jamie Coomber recently (see [2003] Gazette, 11 September, 15), which is briefly as follows.

The practitioner had received instructions from a lender which he felt exceeded the limitations in the rule.

When he voiced his concerns, the lender suggested that the difficulty could be resolved if the parties were represented by different solicitors or partners within the practitioner's firm.

The lender said that the majority of solicitors on its panel were content to adopt that approach.

However, the regulatory position is that the lender's suggestion will not deal with the dilemma arising from the lender's instructions falling outside the rule.

Practice rule 6(3) prohibits a solicitor acting for both lender and borrower if the lender's instructions extend beyond the limitations in the rule.

The definition of 'solicitor' includes the solicitor's practice and also any associated practice, (see note (i) to rule 6(1)).

Consequently, it is not possible to avoid a breach of rule 6(3) by appointing different solicitors within the firm to deal with the mortgage for the borrower and lender.

Regarding the indemnity position, if the lender can establish that the solicitor has incurred a civil liability arising from private legal practice in connection with the firm's practice, then the firm's qualifying insurer will be required to provide indemnity, notwithstanding the professional conduct position.

The insurer can only avoid cover if the claim falls within one of the permitted exclusions set out in clause 6 of the minimum terms and conditions, which form appendix 1 of the Solicitors' Indemnity Insurance Rules.

Julian Wildsmith, Law Society's head of professional ethics