The introduction of law corporations from 1 October 2000 necessitated consequential amendments to the Legal Profession (Professional Conduct) Rules 1998 ('the Professional Conduct Rules') and the Legal Profession (Publicity) Rules 1998 ('the Publicity Rules'). The Council of the Law Society took the opportunity to conduct a comprehensive review of both these Rules. In this article we hope to explain the reasons for the amendments to the Rules and to give a brief description of the changes.
Introduction
The Council requested the ethics committees of 2000 and 2001 ('the Committee')
to conduct the review of both Rules. The Committee focused on three aspects in
its review. Firstly, to review both the Rules to determine if any existing rule
ought to be amended. Secondly, to review the Rules in the light of the impact of
information technology on the practice of law. Finally, to review the Rules to
determine if any practice rules or rules of common law ought to be codified.
As a result, several substantive amendments were made to both Rules. These amendments came into effect on 1 September 2001.
Review of the Professional Conduct Rules
Rule 31
Following feedback from members, r 31 has been amended. The previous r 31 provided that an advocate and solicitor who acted for a client in a matter 'shall not act against the client or against persons involved or associated with the client in that matter in the same or related matter'.
A r 31(3) has been added from 1 September 2001 to provide that nothing in r 31 shall preclude a law firm or law corporation (as opposed to the individual advocate and solicitor) acting against a party in the matter, provided two conditions are satisfied. Firstly, the law firm or law corporation has not acted for the party 'in the same or any related matter'. Secondly, any advocate and solicitor of the law firm or law corporation who had previously acted for the party in the same or related matter is not involved in the matter or any related matter and does not disclose any confidential information relating to the matter or the party to any member of the law firm or law corporation'.
It should be noted that the absolute prohibition against an advocate and solicitor who has previously acted for a client in a matter to, thereafter, not act against the client or other person involved in the same or related matter remains. This was so whether he had in his possession any confidential information relevant to that matter. The material change relates to the position of law firms or law corporations. The amendments ensure that a law firm or law corporation is not precluded from acting against any party just because a particular advocate and solicitor within the law firm or law corporation is conflicted from doing so provided that there are adequate safeguards to ensure that there is no risk of confidential information being disclosed.
Rule 43
The amendment to r 43 of the Professional Conduct Rules was meant to clarify the rule. The Committee agreed with the view of the original committee that drafted the Professional Conduct Rules, that the last two sentences of the rule should be deleted for clarity.
Rule 43 states that when a solicitor withdraws from acting in view of a conflict of interest, the fee chargeable by him may only be for those items that would not be duplicated by the new solicitor.
Rule 52
Rule 52 sets out the professional duty of an advocate and solicitor to meet the fees of professional agents when there is no agreement with the agent that he look to the client of the lawyer for payment of his fees.
The amendment to this rule is a major change. The Committee has agreed with the view of the Council that the Law Society should not continue to hold its members professionally liable for the fees of professional agents they engage on their clients' behalf when there is no reciprocal professional obligation imposed by other professional bodies.
The amended rule only requires an advocate and solicitor to be professionally responsible (unless agreed otherwise) for the fees of a fellow advocate and solicitor and for a foreign lawyer but only in jurisdictions where there are reciprocal obligations.
Therefore, from 1 September 2001, an advocate and solicitor will not be liable for professional misconduct if he or she fails to meet the fees of a professional agent engaged on a client's behalf. It should be noted that nothing in this rule affects the advocate and solicitor's contractual liability to such agents or third parties. It is always a good rule of practice to inform professional agents that their fees will be met by the client directly or, alternatively, to take sufficient monies to account to pay for the professional agent's fees.
Rule 70
There are several amendments to the previous r 70. The first amendment is a change to the notice period from 48 hours to two clear days. The second amendment is to make clear that the 'two clear days' notice' to be given to an advocate and solicitor is only applicable in two situations. Firstly, before entering judgment in default of defence and secondly, before setting a divorce petition down as uncontested as an answer has not been filed within the prescribed time (see the Council's Practice Direction published in the Law Gazette of May 2001 at p 6).
By way of clarification, we wish to add that the Council has ruled that the two clear days' notice can only be given after the lapse of the 14 days provided by the relevant rules to file a defence or an answer and not earlier.
The other amendments provide that r 70 does not apply in cases where the time limits are set by an order of court (see r 70(1) and 70(3)).
An advocate and solicitor cannot require another advocate and solicitor to give two clear days' notice before taking action for not complying with an order of court; for example, if a Banker's guarantee is to be delivered within 14 days per an order of court and is not done so, an advocate and solicitor is not required to give two clear days' notice after the 14th day in order to enter judgment in default. This is also the case in dealing with 'unless' orders.
Further amendments to r 70 are meant to deal with the undesirable practice of some advocates and solicitors in giving fellow advocates and solicitors notice after working hours and deeming that the 48-hour notice period starts to run immediately thereafter. Council is of the view that such conduct is against the best traditions of the Bar and should not be encouraged.
The rule now provides that any notice given on a working day after 4pm or on a day other than a working day shall be deemed to have been given the next working day (see r 70(2)).
The term 'working day' is defined to exclude Saturday, Sunday or public holiday (see r 70(4)).
Review of the Publicity and the Professional Conduct Rules in View of the Impact of Information Technology
Rules 6 and 9 of the Publicity Rules
The impact of IT was most felt with the introduction of the internet. The Council received feedback from members that they were being asked to hyperlink their websites with their clients or to give information on their law firms or lawyers on internet sites of third parties.
A sub-committee consisting of members of the IT and the Ethics committees was formed in 2000 to study the impact of IT on ethics. The sub-committee's work led to the amendment of rr 6 and 9 of the Publicity Rules 1998, the introduction of rr 11A and 11B to the Professional Conduct Rules and the Guidance Note on Ethics and IT published in this issue of the Law Gazette.
The sub-committee and Council agreed that r 9 of the Publicity Rules 1998, which absolutely prohibited advocates and solicitors from participating in client or third party publicity, had to be reviewed.
The sub-committee and Council also agreed that any amendment of any rule must be done by studying the impact of that change generally on the practice of law and not merely from an IT point of view.
The sub-committee came to the conclusion, after looking at services provided on the internet and the growing trend of referral arrangements for work between law firms and third parties through the internet, that r 9 of the Publicity Rules had to change. The sub-committee's recommendations were accepted by the Committee and Council.
In essence, the amended r 9 of the Publicity Rules allows an advocate and solicitor or law firm or law corporation to participate in any third party or client publicity. The only caveat is found in rr 6 and 7 of the Publicity Rules that set out the general principles of publicity within Singapore for an advocate and solicitor or law firm or law corporation.
The established rule of not publicising the practice in a false or misleading manner or to bring the legal profession into disrepute and the power of the Council to determine that the publicity is undesirable still stands (see r 7(1) of the Publicity Rules).
The provision in r 6 of the Publicity Rules that an advocate and solicitor not call himself or the law firm or law corporation as an expert or specialist in a field unless certain conditions apply stands as well (see r 6(2) of the Publicity Rules).
In light of the liberalisation of the Rules to allow third party publicity, the Council felt that amendments were required to both Rules to provide clear guidelines as to the extent that third party publicity would be permissible. The Committee was tasked to consider the appropriate safeguards. An amendment made on 1 September 2001 to r 6 is found in a new r 6(3) of the Publicity Rules. Rule 6(3) states that '(n)othing in these Rules shall be interpreted as permitting the doing of anything ... that ... may reasonably be regarded as touting'.
This rule reminds members that although the Council has allowed advocates and solicitors to participate in client or third party publicity, the law against touting still exists and members must be mindful of it when engaging in any publicity whether directly or through third parties or clients (see also r 11A(1) of the Professional Conduct Rules below).
Rules Against Touting and Rules on Referrals
The Committee and the Council agreed it would be difficult to precisely define what amounts to touting as there is no definition of the term in the Rules. One possible situation where touting can arise is when a law firm or law corporation uses a third party, on a regular basis, to bring work to that law firm or law corporation. In such instances, if the arrangement cannot satisfy the criteria for referral of work set out in the new rr 11A and 11B of the Professional Conduct Rules discussed below, it could lead to the inference that the third party was used for the purpose of touting.
We would also like to highlight that s 83(2) of the Legal Profession Act (Cap 161, 2000 Rev Ed) sets out specific offences of misconduct in s 83(2)(d), (e), (f) and (g) that relate to touting. This includes sharing of fees with a third party for referring work or allowing an unauthorised person to undertake or carry on legal work in his name or accepting work from any person proclaimed as a tout under any written law. It should be noted that these are not in any way exhaustive but rather instances of clear cases of touting.
The distinction between a legitimate referral agreement between a third party and a law firm or law corporation to refer work as opposed to an attempt to tout for work by that law firm or law corporation can be gleaned by looking at the new rr 11A and 11B of the Professional Conduct Rules. These new rules are based on the Law Society of England's Referral Code 1991.
The general standards/principles that must be adhered to when accepting work referred by a third party are found in r 11A of the Professional Conduct Rules.
Rule 11A(1) states that '[a]n advocate and solicitor, or a law firm or a law corporation shall not tout for business or do anything which is likely to lead to the reasonable inference that it is done for the purpose of touting'.
When work is referred, the advocate and solicitor, law firm or law corporation 'shall' comply with six standards, namely:
For example, if a debt collection agency refers clients to a law firm for recovery of their debts, the law firm cannot allow the referror to dictate the legal steps taken for the recovery or accept that all instructions for the progress of the case be communicated to the law firm by the referror only. Even if the referror produces a letter of authority on the client's behalf, the practitioner has a duty under r 23 of the Professional Conduct Rules to verify the authority of the agent to give instructions.
An additional four sets of standards/principles apply for referrals of conveyancing services as described in r 11B of the Professional Conduct Rules.
The most significant difference between referral arrangements for non-conveyancing and conveyancing work is that the referral agreements for conveyancing services must be made in writing.
Rule 11B(1) sets out certain terms the written agreement must contain. They are as follows:
If, for example, a developer who has recently launched a residential development approaches your law firm with an offer to refer all purchasers' solicitors' work to your law firm, you must enter into a written agreement with them.
Before you do so, if you are informed that the offer to the purchasers who instruct your law firm would be that they would receive a legal costs subsidy from the developer that would not be offered to purchasers who instructed another law firm, then you must refuse this arrangement. The publicity of the developer/referror would certainly suggest that purchasers can obtain free or reduced legal charges for conveyancing by instructing your law firm. This could influence the right of the client to appoint a law firm of his choice (see r 11B(1)(c) of the Professional Conduct Rules and the case of the Law Society of Singapore v Disciplinary Committee [2000] 4 SLR 413).
Codification of a Common Law Rule
Rule 53A
Under the final basis of review, the Council has codified the common law rule of conduct when dealing with third parties. This is found in r 53A of the Professional Conduct Rules. This rule simply codifies the common law principle that an advocate and solicitor cannot take unfair advantage of any person or act towards anyone in any fraudulent or deceitful manner or otherwise contrary to the position as an advocate and solicitor or officer of the court; for example, if an advocate and solicitor copies a letter of demand sent to a third party to the third party's Bankers, such conduct would be viewed as acting contrary to the position as an advocate and solicitor. An advocate and solicitor should be aware that there could be various legal defences to the claim that has not been adjudicated upon. To copy such a letter of demand to the Bankers when there is no duty in law to do so would be unfair and can be construed as an attempt to exert undue pressure on the third party.
Yasho Dhoraisingam
Law Society of Singapore
&
Sivakumar Murugaiyan
White & Case, Colin Ng & Partners