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Council’s Practice Direction 6 of 2009: Code of Practice in Non-injury and Personal Injury Motor Accident Cases
1. This Practice Direction takes effect on 1 December 2009.
2. This Practice Direction sets out a code of practice for solicitors concerning the making or commencement of any claim or action (for damages or otherwise) in non-injury and personal injury motor accident cases, and in respect of the negotiation, compromise, settlement or conduct of that claim or action. This Practice Direction:
2.1. consolidates and highlights certain ethical obligations on warrants to act and providing welfare assistance to clients which are also generally applicable to all solicitors in contentious matters;
2.2. establishes the ethical parameters of agreements entered into by solicitors with third parties for referral of work in non-injury and personal injury motor accident cases; and
2.3. complements the existing legislative regime under the Legal Profession Act (the “Act”), the Legal Profession (Professional Conduct) Rules (“PCR”) and the Legal Profession (Publicity) Rules (“Publicity Rules”).
4. After a solicitor or a law practice has properly verified the identity of the client or the principal client, the solicitor or law practice may accept instructions from the client or an agent on behalf of a principal client to act in the matter. In the latter case, the solicitor must ensure that the agent has the required authority to give instructions on behalf of the principal client and, in the absence of evidence of such authority, the solicitor must, within a reasonable time thereof, confirm the instructions with the principal client: r 23 PCR.
5. It is in the interests of both the solicitor and the client that the solicitor or the law practice should obtain written instructions of the client or his agent to act in the matter. If a solicitor or a law practice has received oral instructions from the client or his agent to act in the matter, the solicitor or law practice must confirm the oral instructions subsequently in a written Warrant to Act: O 64 r 7(1) of the Rules of Court. The absence of such a Warrant to Act is, if the solicitor’s authority to act is disputed, prima facie evidence that he has not been authorised to represent such party: O 64 r 7(2) of the Rules of Court.
6. In the context of a third party referring a client to a solicitor or a law practice, the solicitor or law practice, as the case may be, must comply with all the requirements in r 11A(2) PCR. In particular, the solicitor or law practice must “communicate directly with the client to obtain or confirm instructions in the process of providing advice and at all appropriate stages of the transaction”: r 11A(2)(f) PCR. The solicitor or law practice must not accept instructions from the third party to act in the matter.
7. It is in the interests of the solicitor to explain properly the nature, contents and scope of the Warrant to Act directly to his client, and not to delegate this duty to a staff of his law practice. Failure to provide the client with a proper explanation may result in disputes over what the client knew or was told when the Warrant to Act was executed, which may attract allegations of misconduct. Further, the terms of any contentious fee agreement between the solicitor and the client could be deemed unfair or unreasonable and such an agreement may be declared void: s 113(4) of the Act. As a matter of precaution and prudence, it is in the interests of the solicitor to maintain comprehensive and contemporaneous attendance notes of the solicitor’s explanation to the client when the Warrant to Act is executed.
8. In the context of a third party referring a client to a solicitor or a law practice, the solicitor or law practice, as the case may be, is prohibited from leaving blank forms of Warrants to Act with the third party or allowing the third party to secure a client’s signature to a Warrant to Act. The arrangements for the explanation and execution of a Warrant to Act must be made directly by the solicitor or the law practice with the client: r 11A(2)(f) PCR. For the reasons stated in para 7 above, it is in the interests of the solicitor to ensure that the Warrant to Act is executed by the client in the solicitor’s presence.
9. A solicitor cannot refuse to disclose his Warrant to Act to a third party where his authority to act is disputed. Where an action has been commenced in Court, no privilege attaches ipso facto to a Warrant to Act and a solicitor who receives a request to disclose his Warrant to Act should do so as a matter of course: Tung Hui Mannequin Industries v Tenet Insurance Co Ltd and Others [2005] 3 SLR 184.
10. At the same time, in the interests of efficacy, the Council is of the view that such requests should not be made unnecessarily. A law practice should as a general rule accept another law practice’s written representation that the latter is authorised to act for a particular client on the face value of the representation made, unless there are good reasons for suspecting that the representation has been falsely made: see Council’s Ruling 1 of 1992 on Request for Written Warrants to Act.
11. For referral of a client by a third party to a solicitor or a law practice, the solicitor or law practice, as the case may be, must comply with all the requirements in r 11A(2) PCR.
12. In addition, the Council is of the view that the ethical requirements stipulated in r 11B PCR for agreements for referrals of conveyancing services should similarly apply to agreements entered into by a solicitor or a law practice with third parties for referral of non-injury motor accident or personal injury motor accident work. For such agreements, the solicitor or law practice, as the case may be, shall ensure that the agreement is made in writing and contains the following terms:
12.1.The referror undertakes in such an agreement to comply with the PCR and the Publicity Rules.
12.2.The solicitor or law practice shall not:
a. accept from the referror the payment of commission, referral fee or any other form of consideration; or
b. reward the referror by the payment of commission, referral fee or any other form of consideration.
12.3. The solicitor or law practice must be entitled to terminate the agreement immediately if there is reason to believe that the referror is in breach of any of the terms of the agreement;
12.4. Any publicity of the referror (whether written or otherwise), which makes reference to any service that may be provided by the solicitor or law practice must not suggest any of the following:
a. that the service is free;
b. that different charges for the service would be made according to whether or not the client instructs the particular solicitor or law practice; or
c. that the availability or price of other services offered by the referror or any party related to the referror are conditional on the client instructing the solicitor or law practice; and
12.5.The referror must not do anything to impair the right of the client not to appoint the solicitor or law practice or in any way influence the right of the client to appoint the solicitor or law practice of his choice.
13. The solicitor or law practice must terminate the agreement immediately if the referror is in breach of any term referred to in para 12 above or if there is reason to believe that the solicitor or law practice is in breach of such term.
14. If the solicitor or law practice is satisfied that the referror has inflated the claim or was complicit in a staged accident or otherwise committed any fraud, dishonesty, crime or illegal conduct, the solicitor or law practice has a duty to advise the client of the same and the legal consequences of misleading the Court. The solicitor or law practice should also advise the client to require the referror to make the appropriate rectification or take other corrective action. If the client refuses to accept the advice or if the referror refuses to make the appropriate rectification or take other corrective action, the solicitor or law practice, as the case may be, must terminate the agreement immediately and cease to act in the matter. When advising the client, the solicitor must not knowingly assist in or encourage any fraud, dishonesty, crime or illegal conduct. The solicitor must also, at all times, comply with his ethical obligations not to knowingly mislead or deceive the Court: see rr 56 to 59 PCR.
15. Where the solicitor or law practice has terminated the agreement under para 13 or para 14 above, the solicitor or law practice, as the case may be, may continue to act in matters the solicitor or law practice was instructed before the termination but should not accept any further referrals from the referror.
16. Solicitors should bear in mind Council’s Guidance Note 1 of 2004 on Providing Welfare Assistance to Clients, where Council advised that lending monies by a law practice to clients will put a solicitor in a position of personal conflict of interest as the solicitor will have a creditor/debtor relationship with his client and the debt would be re-paid only if the client’s case was either settled or paid. Council also advised that if the client’s case was pending litigation, allegations of maintenance and champerty could be made against the law practice. Law practices should direct clients who are foreign workers to appropriate organisations that can provide welfare assistance to them.
Date: 1 December 2009
The Council of the Law Society of Singapore