Rules review - the closing stages

REGULATION

Edward Nally runs the rule over moves to simplify the framework that governs regulation of the profession

Rules, as they say, must be obeyed.

But rules also need to be drafted.

The regulatory framework that defines the Law Society is necessarily complex, and it is comprehensive.

The existing Guide to Professional Conduct is a mixture of principles, good practice, rules, practice advice and council statements.

Add on to that layers of guidance, the common law and statutory obligations, and it becomes easy to see how complex the structure is.

In May 1999, the regulation review working party was set up by the Law Society Council to start the mammoth task of rewriting the rules with a view to simplifying them and making them less burdensome, for solicitors and clients alike.

Considerable work has gone on, involving large numbers of people working or contributing to the task from their different specialisms or fields of interest.

The work is now at last maturing towards completion.

Later this year, the council will be invited to approve for consultation the entire set of rules, with guidance on various aspects of the rules also being developed.

Although several consultations have been issued over the past couple of years, these have been on separate sections of the rules or single issues and the profession has not had the opportunity to see the proposed new rules in their entirety.

It is critical that the profession and other stakeholders have the opportunity to see all the rules and guidance in their proposed final form before they are made by the council.

Indeed, it is a statutory obligation.

Once any adjustments or points arising from the consultation are incorporated, the council will be required to pass the rules subject to approval by the Master of the Rolls and the Lord Chancellor's Department.

Once the statutory approvals have been obtained, a date for the implementation of the entire rules will be agreed and notified to the profession.

I expect a long lead-in time will be essential to allow for preparation, explanation and education.

Structure of the rules

The council has approved the working party's proposals for a layered framework for the future rules consisting of a set of core duties, detailed rules giving more substance to the core duties, and a layer of non-mandatory guidance.

The core duties that are currently proposed - each defining a specific and fundamental responsibility of the solicitor - are:

l Integrity.

Act with integrity towards clients, the courts, lawyers and others;

l Independence.

Do not allow independence to be compromised;

l Best interests of clients.

Treat the interests of clients as paramount;

l Confidentiality.

Keep all information about clients confidential;

l Conflict of interest.

Do not act where there is a conflict;

l Competence.

Act only when able to provide a competent service;

l Fairness.

Treat clients fairly, reasonably and without unlawful discrimination;

l Client care.

Maintain appropriate client care procedures;

l Management.

Operate appropriate business systems and processes to meet duties to clients, and;

l Professionalism.

In professional work, do not behave in a way which damages the reputation or integrity of the profession.

The rules will then be organised around several themes, each linked to one or more of the core duties.

These are:

l Mode of practice/framework of practice.

These will cover areas such as incorporation rules, limited liability partnerships, investment business rules, employed solicitors and fee sharing;

l Obtaining business.

These will cover matters such as the introduction and referral rules, and publicity requirements;

l Business operation rules.

These will include supervision and management responsibilities and rules about supervision of clients' matters, general management and business systems;

l Relationship with clients.

These will include client care rules, such as the provision of costs information and complaints- handling requirements.

The same rules will also deal in detail with questions of conflict of interest and confidentiality.

These rules will also deal with anti-discrimination;

l Duty to the court, litigation and advocacy.

This section will explain the roles of solicitors as advocates and will cover associated aspects of litigation practice in particular;

l Relationship with others.

This section will cover the obligations of the solicitor to third parties and will deal with matters such as undertakings, relationships with foreign lawyers or with counsel.

There will also be express duties to co-operate with the Society, particularly on issues of conduct, and;

l International aspects of practice.

This section will incorporate and rationalise as appropriate the obligations of solicitors in the international arena having regard to relevant EU and other requirements.

Principles of rule-making

The working party has identified the following principles as the key to good rule-making.

It has determined that the rules must be:

l Necessary - relate to solicitors' proper duties and necessary to enable solicitors to meet the reasonable expectations of clients;

l Clear - open and user-friendly for solicitors, clients and regulators;

l Fair - to clients, the administration of justice and to solicitors;

l Enforceable - to provide a system that works and meets expectations of solicitors and clients;

l Proportionate - to the risk and not over-burdensome;

l Targeted - focused on the problem, minimising side-effects on those who do not present a risk, and;

l Consistent - with the other rules, achieving proper integration and internal coherence.

Also, consistent with the Law Society's wider regulatory priorities.

Once enacted, these rules will impact on every solicitor in England and Wales and abroad, and the clients and others who do business with the solicitors' profession.

Inevitably, there will be some controversy about the changes.

As a broad observation, I find that most people are enthusiastic about simplifying a particular rule or scrapping it altogether, but when they start to think more deeply about the full implications of any change, seeds of doubt start to be sown in their minds.

We are attempting to link the core duties into the more detailed rules so that there is cohesion between these different layers.

Guidance will be kept to what we believe is the necessary minimum for interpretation purposes.

The notion is the guidance will develop as a mixture of good practice and procedure, not all of which is intended initially to be reflected in the rule book.

Having worked hard to eliminate large tracts of text, it would seem a little odd to reintroduce words at such an early stage in the life of the new rules.

However, there may well be considerable cause for separate guidance materials to be developed over a period of time.

I expect these to be designed in plain English style and in a manner which is comprehensible for clients and solicitors alike.

I hope the complete work will receive support when it is exposed to the profession.

It is a genuine attempt to provide a coherent and comprehensive approach to regulation of the profession in the 21st century.

The Law Society will welcome views as the project comes to fruition.

Edward Nally is the Law Society's Deputy Vice-President and chairman of its regulation review working party