Usually, this will be a person’s spouse/partner, children and possibly other family members, but that may not always be true. Private client lawyer James McMullan explores children’s inheritance rights.
Under English law, a person may give their estate to whomever they chose, and so whilst it may seem logical that children inherit something from their parents, there is no legal obligation on a parent to do so. For anyone familiar with the inheritance rules of other countries, this may seem strange as other jurisdictions have rules dictating how an estate should be divided which includes leaving a percentage to your children. However, English Law upholds a concept known as testamentary freedom.
Who comes under the definition of ‘children’?
As society develops, ‘blended’ families are becoming much more common, and with this, the question of who should be entitled to inherit has raised more questions.
Previously, the legal definition of children had meant only legitimate children who are born through marriage. The legal definition of children today includes legitimate and illegitimate children (an unfortunate term referring to those born outside of marriage) and adopted children but does not include stepchildren unless the stepchild has been adopted by the stepparent. It should also be noted that adopted children are taken to be the children of their adoptive parents only, and the legal connection to their natural parents is severed by the adoption order.
Different ways children can inherit and their rights
When a person has died without making a will, their estate will be dealt with in accordance with the intestacy rules, which make provision for various persons set out in a ladder of priority, starting with a person’s spouse or civil partner and children.
‘Partner’ in the context of the intestacy rules refers to one’s civil partner only and not a domestic partner who has not entered into a formal marriage or civil partnership.
If a person has a spouse/partner, the first £270,000 of their estate is given to the spouse/partner, with the remainder of the estate being divided between the spouse/partner and the children in equal shares. If there is no spouse/partner, the estate is divided equally between the children. If there are no children, then wider family members may inherit.
Under a will, there is more flexibility. Whilst the definition of children remains the same, a testator could, if they choose, make an express provision in their will that children should be defined to include their stepchildren. They could also do the opposite and state that they only want children to mean their legitimate children, thereby excluding any illegitimate and adopted children from any inheritance under the will.
Not only does a will offer flexibility regarding who will inherit, but the testator also controls how much they will inherit. For example, you may wish your children to receive unequal amounts for whatever reason, which is not available under the intestacy rules. You may wish to make specific provisions for a disabled or vulnerable child.
As mentioned, children have no legal right to inherit. Despite this, there are a number of ways a child may receive an inheritance by making a claim against the estate.
A child of a person who has died or a person who was treated as a “child of the family” of the deceased, may make a claim for an award out of the estate if the will does not make ‘reasonable financial provision’ for them under The Inheritance (Provision for Family and Dependants) Act 1975.
A child will not automatically be entitled to an award, and the court will look at various factors in making their decision, such as the child’s financial needs and resources and the relationship between the parent and the child, and what caused the parent to make their decision. This may also be applicable to stepchildren, who are not included in the definition of children but could be considered a person who is treated like a child of the deceased, especially if the stepchild depended on them.
Conclusion
If you die without a will, you will have no control over who receives your estate, and your children’s inheritance rights will be dictated by the Intestacy Rules.
If you would like to exclude a child from receiving an inheritance or dictate the share that each child should receive, it is strongly recommended that you write a will to retain control over your estate. The vacuum caused by the lack of a will often results in claims being made against the estate, which could have been avoided by careful express provision in a well-considered will.
If you have questions about children’s inheritance or would like specific advice based on your circumstances and a will drafted to meet your family’s needs, speak to private client lawyer James McMullan today.
Note: This article is not legal advice; it provides information of general interest about current legal issues.
The Claimant believed he was encouraged to make substantial investments in the Defendant’s business due to false statements made by the Defendant during pre-contractual negotiations. Therefore, the Claimant issued proceedings, seeking a primary claim in deceit.
To establish liability in deceit, the Claimant needed to prove that the Defendant intended his representations to be false.
The Defendant pleaded that he was unaware that his representations would be conveyed or interpreted as false; therefore, he could not be liable for deceit. He stated that he did not seek to hide anything from the Claimant and that the Claimant always had access to legal documents and accounts relating to the investments.
Background
The Defendant and Claimant each ran respective businesses within the shipping industry. In 2013, the parties entered a joint venture arrangement (ETFA 1) on a 50/50 basis.
Shortly after, a third party, Kohlberg Kravis Roberts, approached the Defendant with a further joint venture proposal, as they wanted to make investments within the shipping market, and a joint venture vehicle was set up (OML).
The Defendant asked the Claimant whether he would like to participate in the OML venture and advised that the Claimant’s contribution to EFTA 1 would be used. The Claimant confirmed that he would be happy to roll over his entire interest to the OML venture, and in July 2014, the Claimant and Defendant entered into a second JV agreement (ETFA 2) to reflect this.
In August 2014, the Defendant advised the Claimant that the OML venture had completed, and the Defendant would finalise “whatever the number is” for the Claimant’s share in the deal. The parties agreed that the Claimant should receive a 30% interest and entered into a third JV agreement (ETFA 3), which effectively superseded ETFA 1 and 2.
In November 2018, the Claimant voiced concerns over the setup of the OML venture. He could not see how his investment in ETFA 1 had gone into the OML venture (despite what he was led to believe by the Defendant). He felt that he had been “outsmarted” and “cheated”.
The Defendant suggested that the Claimant appoint an auditor of his choice to investigate the matter, but the Claimant rejected this and issued proceedings for deceit in May 2019.
The Court’s decision
The Court considered whether the representations made by the Defendant were made to induce the Claimant to enter into ETFA 3 and whether the representations given were deceitful.
The Defendant attempted to rely on a non-reliance clause contained in ETFA 3 for any information or representations given. However, the Court held that the clause failed as a defence, as it could not shield the Defendant against any liability in deceit. The non-reliance clause could only come into effect against claims for non-fraudulent misrepresentations.
The Court considered the principle of deceit by recklessness and whether the Defendant, in making false representations recklessly and not caring about what they conveyed, was any different than a person making statements, not caring about whether they were true or false. The Court took from the Judgment in Derry v Peek that liability in deceit is proven when a “false representation has been made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false.” The Court found the representations made by the Defendant in the OML venture were knowingly false. Because of those representations, the Claimant entered ETFA 3, giving up all rights under ETFA 1 and 2.
The Court held that, although it was highly unlikely that the Defendant set out to defraud the Claimant. Nevertheless, it was proven that the Defendant was liable in deceit for the false representations made to the Claimant when entering ETFA 3. The Claimant was therefore awarded damages with interest and rescission of the contract.
What does this mean for commercial vendors?
The Judgment illustrates the potential dangers in transactions for commercial vendors and how important it is to be careful when making representations in pre-contractual negotiations.
Non-reliance clauses are generally used to try and exclude reliance on pre-contractual representation so that claims for overselling/exaggerating the performance of a business can be protected. This Judgment, however, highlights that a party cannot contract out of its liability for misrepresentation under the Misrepresentations Act 1967, no matter how well-drafted their clause is.
A good non-reliance clause can defeat most claims; however, it won’t be sufficient on its own to defeat claims of deceit.
The importance of understanding how statements could be interpreted or conveyed by a counterparty is imperative during negotiations so that both parties have a clear picture of the transaction and there is no overselling of a business. The Judgment highlights that simply being unaware of or not recognising what has been said will not shield a party from its liability in deceit.
Contact Victoria Holland today if you have concerns about your pre-contractual representations, non-reliance clauses or joint venture agreements.
Note: This article is not legal advice; it provides information of general interest about current legal issues.
The Greek philosopher Heraclitus reputedly said, ‘Character is Destiny’. On 11 February 2022, The Honourable Mrs Justice Collins Rice handed down Judgment which tended towards that view.
The case of Sawati v The General Medical Council considers the approach by the Medical Practitioners Tribunal (MPT) to ‘good character’ regarding allegations of dishonesty. This decision has general application across the regulatory arena, not solely to healthcare cases.
The appeal succeeded on the MPT’s approach to insight following an unsuccessful defence (another interesting regulatory issue). The sanction of erasure was quashed and remitted to a differently constituted MPT for reconsideration. The appeal failed on the ‘good character’ ground, however, and that’s the focus for this article.
Case background
Dr Sawati was in the second year of her foundation training when allegations of misconduct were reported to the GMC. In 2021, six allegations came before the MPT; four allegations were proven, including three with dishonesty.
On appeal, Dr Sawati asserted that the dishonesty findings were unsustainable. The MPT was wrong procedurally in making the first dishonesty finding because, on the face of its decision, only after it had proved dishonesty did it consider her good character and her problems with communication.
That mistake infected the subsequent two findings of dishonesty. The MPT should have directed itself expressly at the start of its analysis to take good character into account when considering Dr Sawati’s credibility and propensity to be dishonest.
The argument goes that if your character has a clean bill of health, you are more believable as a witness and less likely to have behaved dishonestly.
High Court findings
Paragraphs 53-56 of the Judgment include a useful detailed review of the case law:
Donkin v Law Society: cogent evidence of positive good character is relevant although the weight to be attached to that evidence is a matter for the tribunal.
Wisson v Health Professions Council: Relevance can go to credibility and to propensity.
Martin v Solicitors Regulation Authority: good character evidence should not detract from focus on evidence directly relevant to the alleged wrongdoing and decisions on weight are for the fact finder not the appeal court unless the decision is one that no reasonable tribunal could have reached.
Kahn v The General Medical Council: the appeal court can infer from all the material that the tribunal must have taken good character properly into account: it does not have to direct itself to do so explicitly.
The MPT had received accurate written legal advice on the interrelated issues of witness credibility and memory; dishonesty; and good character.
The MPT’s decision must be ‘read fairly, as a whole, in context and having regard to its structure’.
The appeal court should ‘decline invitations to narrow textual analysis quoting after misdirection’.
It can be inferred from all the material that ‘good character’ has been properly considered. It does not have to be explicitly so stated in the decision.
The MPT had clear, correct advice on good character which it reproduced in its decision.
The MPT gave itself a self-direction, leaving little room for doubt on appeal. It was ‘an invitation to narrow textual analysis’ to suggest that the self-direction should have come a little earlier in the process or with explanation of the application of the self-direction to the facts found.
The MPT maintained its ‘primary focus’ on the specific evidence directly relevant to the alleged wrongdoing.
It was wrong to suggest that the MPT did not have good character in mind at all or that it failed to give enough explanation for its overall conclusions.
The MPT was entitled to weigh specific factors concerning actual events more decisively than general factors relating to credibility and propensity.
An unblemished record may properly carry less weight at an early stage of a career than where there is an established track record. Conversely, inexperience may carry more weight in understanding what happened.
Decisions on weight are for the fact finder and ought not to be disturbed on appeal unless the decision is one that no reasonable tribunal could have reached.
The MPT’s decision on the first allegation (retrospective amendment of a patient’s record) was at least open to it on the totality of the evidence.
Tribunals might consider giving clear directions during the case management process stating when ‘good character’ evidence is to be received and at what stage it will be shown to the tribunal.
This is a potentially important aspect of case preparation for those appearing in person or as advocates before professional disciplinary tribunals. My experience suggests that ‘good character’ evidence is often an afterthought. Precedent makes the case for giving it serious consideration, even if only to discount it as an option with reasons. It may be particularly useful where there is no clear motive for the misconduct alleged to have been committed by a previously blameless individual. Those cases where we read the reports and scratch our heads as to why the offender thought that what they were doing made any sense. Experience tells me that the ‘good character’ argument may succeed if thoroughly and realistically prepared. And in such a case, character is, indeed, destiny.
Contact regulatory specialist and solicitor Susan Humble today.
Note: This article is not legal advice; it provides information of general interest about current legal issues.
Let’s start at the beginning. An unmarried couple is in love and can’t wait to live together. They’ve saved their deposits and are looking at houses. Finally, they find a property and begin purchasing their dream home. Amongst multiple forms from their solicitor is one that asks how they would like to hold the property and whether they would like to be “joint tenants” or “tenants in common.”
In an ideal world, the solicitor clearly explains the difference between these two, but this doesn’t always happen. If the couple selects the wrong option, a cohabitation dispute could follow if the couple separates.
If only one person has contributed capital to the purchase or has contributed considerably more than the other, if the parties are joint tenants, then each party still owns an equal share of the property. This option might seem unfair, particularly where one party has used inheritance money or the “bank of mum and dad” to support the purchase. By selecting tenants in common, buyers can choose to own the property in percentage shares, for example, based on the amount they put in. These shares are not set in stone but could be crucial if the relationship breaks down and a dispute arises. Pippa advises:
“Although you might prioritise choosing the new kitchen, make time to decide how you should own your property at the outset; it may save you thousands on legal fees and protect your financial interests. Each purchaser should seek independent legal advice regarding any inequality in your deposit contribution. How you own your property also has implications on who benefits in the event of death, and there can be potential tax consequences/advantages depending on the option selected.”
Contact family solicitor Pippa Marshall or head of property Brinda Granthrai today to find out how they can help you.
Note: This article is not legal advice; it provides information of general interest about current legal issues.
Marriage and relationship breakdowns are often stressful and emotionally charged. You need a legal partner who listens, is reassuring and works for and with you to reach a fair and amicable agreement regarding your financial affairs and child arrangements. The support you receive is as important as the advice given.
The team at RIAA Barker Gillette combines the legal insights you expect from an international law firm with the compassion and understanding you need.
We have expertise in marital agreements, divorce and financial settlements, cohabitation disputes and child arrangements.
We regularly deal with cases involving considerable wealth or complex assets and families with an international footprint. Where a family’s affairs involve business or property interests, our team draws upon the in-house dedicated private client, real estate and corporate teams’ expertise. In addition, our network of international offices provides local legal advice for families that need it.
We recognise the desire to settle cases where a relationship has broken down as quickly and amicably as possible and use negotiation and Alternative Dispute Resolution (ADR) methods where appropriate. Pippa is a member of Resolution and strives to comply with their Code of Practice. This approach keeps legal costs manageable and avoids unnecessary delays in concluding matters. Court proceedings should always be a last resort, but when needed, we have the expertise to manage court cases efficiently and effectively to their conclusion.
Divorce and relationship breakdowns are some of the most challenging life experiences. The need to listen and understand, to know when to act quickly and when to take time, is part of the unique approach at RIAA Barker Gillette.
The SRA has been robustly targeting compliance with these Rules in recent months. Firms have fallen foul of the requirements, and it is fair to say that there was resistance from some to the provisions when introduced. That was evidenced by comments below the line in the legal press. In August 2021, the SRA reported as a news item that a dozen practices had been fined for repeatedly failing to display the correct information.
In summer 2021, the SRA wrote to the 8,000 firms not already checked out, requesting a signed declaration of adherence. The SRA has helpfully provided templates to make the task of compliance easier.
The climate appears to have settled. A potential client with a clear idea of how much their matter will cost is more likely to translate into a loyal client for years to come. Transparency enables firms to use their websites as a ‘word of mouth’ marketing tool, particularly when coupled with positive reviews. There are opportunities to present information in attractive ways to bolster a firm’s offering.
Rule 1 is directed at costs information on services for individuals and businesses, including residential conveyancing, probate, employment tribunals (employees and employers), and debt recovery to £100k (businesses only). Complaints information, including options to contact the Legal Ombudsman and the SRA, must be published prominently (Rule 2). The SRA’s ‘click through’ digital badge must also be published, as well as the firm’s SRA number (Rule 4).
The Rules also provide for information about those doing the work, key stages, and timescales to be included.
What happens if your firm chooses not to have a website? A brave decision nowadays! However, Rule 3.1 provides that the information required by Rules 1 and 2, costs and complaints, must be available on request. Be prepared for the SRA mystery shopper!
What could happen to your firm if it does not comply?
The SRA started handing out fines and rebukes to firms that were non-compliant in the summer of 2020. The most recent SRA decision in this area has just been published.
Recent SRA Decision
On 12 August 2021, the SRA imposed a ‘control of practice’ authorisation condition on ANB Law in Peterborough.
The SRA adjudicator’s decision followed a period of non-compliance since June 2021, when it is assumed that the firm came to the SRA’s attention.
The decision was stated by the adjudicator to have been made in the public interest because: there was a risk of non-compliance; the conduct was likely to be repeated; the conditions imposed addressed repetition of the conduct, and, interestingly, ‘there is no evidence to date that the firm’s conduct has caused any lasting significant harm to consumers or third parties’.
One wonders what that evidence might have been if it had existed. There’s a potential ‘level playing field’ argument to be made in terms of harm to third parties. Non-compliant firms might gain a potential competitive pricing advantage over compliant firms if allowed to remain non-compliant unrestrained by the SRA. Any advantage is limited if the SRA takes swift action and imposes conditions requiring compliance speedily.
The firm was required within 30 days to provide evidence to the SRA’s ‘reasonable satisfaction’ of compliance with Rule 1 (where the relevant services were supplied by the firm). Evidence regarding the publication of complaints information and the digital badge had to be provided within the same timeframe.
The story did not end there. On 16 November 2021, the SRA imposed a fine of £1,000 on the firm with a costs order of £300. The condition referenced above remained in place.
The SRA’s published decision provides context for the Rules. The Rules are directed ‘to ensure people have accurate and relevant information about a solicitor or firm when they are considering purchasing legal services. They are intended to help members of the public and small businesses make informed choices, improving competition in the legal market’.
Such decisions are generally published online. The reputational damage attached to getting this wrong is potentially significant.
How can RIAA Barker Gillette help?
Susan Humble, the Head of RIAA Barker Gillette’s Regulatory Department, was the CEO and Clerk of the Solicitors Disciplinary Tribunal for almost eight years. Susan and the RBG Regulatory team can help you with your regulatory problems, including compliance with the Transparency Rules. A chat with us will quickly help you to manage those regulatory worries once you have heard our clear and concise advice.
We are just an email or phone call away!
Note: This article is not legal advice; it provides information of general interest about current legal issues.
In a landowner versus drones situation, the former can draw on the principle that the air space in the vertical column above his land is his to such height as is necessary for the ordinary use and enjoyment of his property. Entering that air space is a trespass and exposes the trespasser to a claim for damages and injunctive relief.
So, for example, it is commonplace for developers to negotiate a licence to enable the jibs of their cranes to go through the air space of an adjoining property owner to preclude a claim for trespass and the possibility of an injunction to impede building progress. A developer has to invest a lot before starting a building project and is unlikely to take a chance.
The stakes are usually much lower for someone interested in collecting images with a camera fitted to a drone. The imagery results are impressive, with drone cameras that can hover and zoom in for close-up results. A surveyor or journalist may be more gung ho about just going ahead with a one-off trespass. A one-off infringement is unlikely to generate litigation, save in egregious cases.
A landowner aggrieved by a drone flying through his air space can potentially claim under many heads. It is not only the law on trespass that may yield a claim; there is the tort of a private nuisance, the rights to data protection in the collected images, and claims for breach of privacy and confidentiality, depending on the circumstances.
Does this mean that investors in drone technology should give up in the face of powerful, long-held vested interests in land? History shows that landowners have to yield to advances in technology in the end. One can go back to the 19th century when the landed gentry fought the railways, to the 20th century when governments would compulsorily buy land needed for urban expansion and roadway infrastructure, and more recently to the imposition of telecommunication legislation which has transferred rooftop property rights to telecoms operators. The public interest generally prevails.
Some prescient commentators see a future distribution system where online sellers have district hubs or vertiports (on the top of buildings) where drones collect goods for transportation via air traffic channels to our homes. Of course, if establishing such systems is in the public interest, legislation will likely restrict private property rights, which may stand in the way of ‘progress’. But it should not be beyond the wit of those who rule us to preserve most of the private property rights mentioned above, and compromise is often the way forward.
Want to know your property rights? Call John Gillette today.
Note: This article is not legal advice; it provides information of general interest about current legal issues.
‘Those are my principles, and if you don’t like them… well, I have others.’ The Christmas Quiz season is over, like turkey or mushroom risotto, so no prizes for guessing that Groucho Marx said this. The Solicitors Regulation Authority (SRA) has Principles, the SRA Principles 2019 (formerly, the SRA Principles 2011). If we solicitors don’t like them … well, tough because the SRA doesn’t, currently, have others. Principles are the benchmark against which our conduct (including that of those who work with and for us) is measured. What follows is a summary analysis of how the SRA Principles are applied in practice, studded with gems of cases along the way.
What is a ‘Principle’? A quick ‘Google’ brings up 7,470,000,000 results. I like the Cambridge Dictionary’s suggestion of ‘a moral rule or standard of good behaviour’. This fits our purpose well. The SRA defines the term in its Principles 2019 as:
‘the fundamental tenets of ethical behaviour that we expect all those that we regulate to uphold.’
Back in the dark ages of 2011, the definition was longer and less prescriptive:
‘The Principles embody the key ethical requirements on firms and individuals who are involved in the provision of legal services. You should always have regard to the Principles and use them as your starting point when faced with an ethical dilemma.’
The status of the Principles has, it seems, been quietly upgraded from starting point when facing an ethical dilemma to fundamental tenet. It is essential to understand what the Principles are and how they can be broken when practising as a solicitor in 2022.
The word ‘ethical’ is emotionally charged. Look at the divergence of opinion on Insulate Britain. There is little doubt that the nine protestors jailed for breaking an injunction against illegally blockading traffic on the M25 believe that what they are doing is ethical in furtherance of their campaign on home insulation. Those who were unable to get to hospital appointments, drive their children to school, get help by ambulance, may disagree that the protestors are behaving ethically. ‘Ethical’ relates to human morals and human morals are deeply personal rather than ‘one size fits all’. Morals are fluid, especially when talking about our own as opposed to someone else’s. This can be seen in the move from fault to no-fault divorce, the treatment of women who kill when subjected to coercive control, and our views of MPs who have second jobs. When we get into the realm of ‘morals’, we are venturing outside the boundaries of professional conduct and into the realm of private conduct. We saw where that can lead in the High Court decision of Beckwith v Solicitors Regulation Authority about which much has been said and will not be repeated here. We are dealing with the expected standard of behaviour; what’s right and wrong. Such judgements inevitably involve the placing of our baggage on the table and are, therefore, nuanced, and subject to unconscious bias.
The SRA provides guidance on its website on the application of its Principles in situations where they conflict with each other:
‘Should the Principles come into conflict, those which safeguard the wider public interest (such as the rule of law, and public confidence in a trustworthy solicitors’ profession and a safe and effective market for regulated legal services) take precedence over an individual client’s interests. You should, where relevant, inform your client of the circumstances in which your duty to the Court and other professional obligations will outweigh your duty to them.’ (my emphasis).
Public interest trumps individual client interest. Informing a client of ‘circumstances’ does not necessarily mean that the client will remember receiving that information when the chips are down. Clients in most situations tend not to care overly about the public interest when making legal services distress purchases. That’s human nature; are any of us wholly altruistic? In regulatory language (albeit that some are coy about saying so), ‘clients’ are now ‘consumers of legal services’. Section 1 of the Legal Services Act 2007 sets out the regulatory objectives, including at 1(d) ‘protecting and promoting the interests of consumers’. The Legal Services Consumer Panel created by that same Act provides ‘independent advice to the Legal Services Board about the interests of legal services consumers’. The Legal Ombudsman refers to ‘consumers’ on its website. Consumers may not be willing to accept that the provider of a service owes a higher duty to anyone other than them. They who pay the piper etc. A synonym for ‘consumer’ is ‘customer’ and, as Mr Selfridge said back in 1909, ‘the customer is always right’.
The table below sets out the Principles as they are and as they were:
2019
2011
We must act:
We must:
1. in a way that upholds the constitutional principle of the rule of law, and the proper administration of justice
1. uphold the rule of law and the proper administration of justice
2. in a way that upholds public trust and confidence in the solicitors’ profession and in legal services provided by authorised persons
2. act with integrity
3. with independence
3. not allow our independence to be compromised
4. with honesty
4. act in the best interests of each client
5. with integrity
5. provide a proper standard of service to our clients
6. in a way that encourages equality, diversity and inclusion
6. behave in a way that maintains the trust the public places in us and in the provision of legal services
7. in the best interests of each client
7. comply with our legal and regulatory obligations and deal with our regulators and ombudsmen in an open, timely and co-operative manner
8. run our business or carry out our role in the business effectively and in accordance with proper governance and sound financial and risk management principles
9. run our business or carry out our role in the business in a way that encourages equality of opportunity and respect for diversity; and
10. protect client money and assets.
There are now 7 where there used to be 10 Principles. The Principles are supplemented by ‘Codes of Conduct’ for Solicitors and Firms. Where allegations are made by the SRA, they are likely to plead breaches of Principles and Codes.
Some context is provided on the SRA’s website, in the ‘Introduction to the SRA’s Enforcement Strategy’. One point on the website is that we must search hard to find what we want. Useful information is hidden under layers of web pages. SRA: must do better! The Introduction states that:
‘Our SRA Principles and Codes of Conduct aim to drive high professional standards. Through them we seek to give a clear message to the public, regulated individuals and firms about what regulation stands for and what a competent and an ethical legal profession looks like.
We work in the public interest, protecting consumers, setting and enforcing high professional standards, and supporting access to affordable legal services, the rule of law and the administration of justice.
Our regulation therefore seeks to:
ensure a strong, competitive, and highly effective legal market
ensure a focus on quality and client care
promote a culture in which ethical values and behaviours are embedded.’ (my emphasis)
There is inevitable tension between the expectations of consumers buying a service, protection of those same consumers, affordable legal services, and high professional standards. This tension is exacerbated by what follows next in the Introduction (and remember this is about enforcement, or rather ‘the act of compelling observance of or compliance with a law, rule, or obligation’):
‘In doing so, we will not second guess the approach [solicitors and firms] take or the way in which [solicitors and firms] choose to comply. We do, however, require all those we regulate to be familiar with our standards, explanatory guidance, and the law and regulation governing their work, and to be able to explain and justify their decisions and actions.’ (my emphasis)
Please look again at the Principles 2019 listed above. If the SRA dropped by for a cuppa and biscuit, would you be able to ‘explain and justify’ your decisions and actions? In every case, on your Anti-Money Laundering policies, procedures and controls, in respect of your firm and accounts management, your supervision of employees, the transparency of your published costs information, the operation of your complaints procedure? You might be providing that explanation some time down the line, and the requirement to justify is likely to be prompted by an adverse event e.g. a consumer complaint to the Legal Ombudsman or direct to the SRA. The sand will not be deep enough for your head to hide itself. And regrets? By then, you may have a few. What we are talking about here is not the dishonest solicitor. They remain few and far between. We are talking about the usual, average solicitor with a busy practice (because if it’s not busy no money will be made) serving the local community, doing work for less than its full value or pro bono, and finding opportunities to see the spouse and kids and the lockdown dog occasionally (time for eating, sleeping, and comfort breaks optional).
There is a paucity of published decisions citing the 2019 Principles. This makes sense. Conduct after the 2019 Principles came into effect on 25 November 2019 will, no doubt, be under current investigation or moving slowly through the disciplinary process, save for the most obvious such as conviction cases.
Take a look at examples from recent internal SRA and external Solicitors Disciplinary Tribunals (SDT).
Principle 1
This Principle has its own guidance on the SRA website. Reference is made to the words of Lord Bingham in his book ‘The Rule of Law’ published in 2010 who stated:
“The core of the existing principle is…that all persons and authorities within the state, whether public or private, should be bound by and entitled to the benefit of laws publicly and prospectively promulgated and publicly administered in the courts.”
The SRA interprets Lord Bingham’s words by describing the rule of law as a principle that the law is of equal application put into effect by individuals and organisations, including “emanations of the State”, and through activities engaging the justice system. Sounds good. Catchy!
The SRA references criminal convictions as, possibly but not necessarily, engaging Principle 1. ‘Any behaviour which indicates a serious disregard for the principle that the law applies equally to all, is likely to be a breach of Principle 1.’ Interestingly, my research indicates that Principle 2 ‘public trust’ is more generally pleaded by the SRA in conviction cases.
Examples of possible breaches of Principle 1 provided by the SRA include:
Knowingly facilitating organised people trafficking
Involvement in money laundering
Misleading the court
Failure to comply with the lawful exercise of investigative powers e.g. failing to provide a specimen of breath where it is lawfully required
Failure to report a criminal conviction or regulatory breach to the SRA – remember that only serious breaches are to be reported, but how do we define ‘serious’?
Principle 2
This Principle is the ‘catch-all’ (if that’s not too disrespectful) and is pleaded in many cases. It is, indeed, ubiquitous, a legal Bake Off celebrity, if you will.
On 17 November 2021, the SRA published an internal decision involving a frying pan. Solicitor Mr Bains was on holiday in Bangor in October 2020. He struck a member of the public around the head with said pan during an argument. The person on the receiving end did not want to press charges. Mr Bains was, however, duly charged with public order offences. He pleaded guilty a month later and was fined £1,760 and ordered to pay victim surcharge and costs. He reported the conviction to the SRA the same day. He admitted that, by reason of his conduct and his conviction, he was in breach of Principle 2. Mr Bains accepted a rebuke, publication of the Regulatory Settlement Agreement with the SRA, and costs of £600. By adopting this approach, he no doubt avoided an SDT hearing where the sanction may have been more robust and the costs certainly higher.
17 November 2021 was a busy publication day for the SRA, a KPI busting rush! Mr Emerson, a partner in a firm, was found by the SRA to have attempted (by way of a draft settlement agreement) to prevent an individual and a company from making disclosures to HMRC, in breach of Principle 2. He also accepted a rebuke and costs of £600. Two very different cases with the same outcome.
Drink-driving convictions seemingly fall under the Principle 2 heading and are subject to separate SRA detailed guidance. There has been a positive move by the SRA away from referring drink-driving cases to the SDT over the last 4 years. In the most recently published SRA decision, Miss Salunke collided with a roundabout sign whilst under the influence (over twice the legal limit). Cornwall Magistrates Court imposed a 20-month disqualification from driving, to be reduced by 20 weeks on completion of a certain course, plus a fine of £1,380 together with the usual victim surcharge and costs. The conviction was reported to the SRA the same day. Under a Regulatory Settlement Agreement, the solicitor accepted a fine of £1,100, publication of the decision and costs of £300. The decision itself sets out in detail the basis upon which the fine was calculated and is worth a read.
In its detailed guidance on Principle 2, the SRA refers to conduct outside of practice. The guidance does not appear to have been updated since the Beckwith decision. I think it should be. My eye was drawn to this paragraph:
‘We do not expect everyone to conform to a perfect ideal of behaviour outside of practice. The threshold for us taking action relating to conduct in personal relationships is high but may well be crossed by unlawful or abusive behaviour.
For example, the exaggeration of personal attributes on a dating website is not a regulatory matter. But we will consider some conduct, for example using a false identity, as serious in this context as in any other.’
I wonder how many solicitors are dreaming about the Principles when drafting their online dating profiles? How do we define ‘personal attributes’? Could exaggeration of a personal attribute equate to using a false identity? Metaphysical stuff!
Principle 3
Breach of Principle 3 is most likely to come up in conflict cases. The 2011 version makes an appearance in the SDT case of Hetherington [12175-2021]. The SDT judgment is endorsed to indicate that some part of the decision is subject to appeal. The case involves client investment in parking spaces and storage pods, a ‘You and Yours’ favourite. ‘Own interest’ conflict in breach of Principle 3 was alleged, namely that the solicitors preferred their own interests over those of their clients. There is an absolute prohibition against acting in ‘own interest’ conflict cases. The specific allegation was that referrals and fee income were put above the interests of clients when advising on transactional risk. The SDT found the allegations proved. Dishonesty was also found, with the result that the solicitors were struck off with a joint and several costs order of an eye-watering £98,000. How did those costs happen!
Principle 4
The Principles 2019 specifically reference honesty (in contrast to the 2011 version). Solicitor dishonesty cases will almost always be heard at the SDT which is the only entity, currently, with the power to strike off, enshrined in the Solicitors Act 1974.
Principle 5
The concept of ‘integrity’ has troubled many regulators over the years. In solicitor cases be mindful of the words of Lord Justice Jackson in Wingate and Evans v SRA and SRA v Malins:
‘Integrity is a useful shorthand to express the higher standards which society expects from professional persons and which the professions expect from their own members … [Professionals] are required to live up to their own professional standards … Integrity connotes adherence to the ethical standards of one’s own profession”.
In SRA v Holdaway, the concept was pleaded under Principle 2 (2011). It was alleged, amongst other things, that Ms Holdaway failed to act with integrity (when not practising as a solicitor) by falsely stating in a job interview that she was employed by her previous firm with a one month notice period. It was also alleged that she had provided false information about her previous employment to an employment agency. Dishonesty was alleged (as is common in integrity cases). Ms Holdaway had been dismissed by her previous employer. The SDT found the allegations proved on the Wingate test. Dishonesty was found proved and Ms Holdaway struck off (in absence of appearance).
Principle 6
The SRA has provided guidance on obligations under this Principle. That guidance is detailed. In short, solicitors and firms are expected to comply with The Equality Act 2010 and encourage equality of opportunity and respect for diversity. The SRA also expects inclusion in our approach to everything we do. The concepts are described in shorthand as EDI. There is a lack of published SRA-specific case law in this area. This is an important consideration for us all. The SRA’s guidance focuses on the wisdom of having in place:
Development and implementation of an EDI policy statement for our workforce
Monitoring and analysis of the diversity of our staff and clients
Recruitment policies to attract a diverse workforce
Encouragement of EDI by senior leadership
I expect to see more cases pleading breach of Principle 6 in the next 12 to 18 months.
Principle 7
A recent example of a breach of Principle 4 (2011) (Principle 7 (2019)) appears in the Agreed Outcome approved by the SDT in SRA v Ali. It was said by the SRA, admitted by Ms Ali, and accepted by the SDT, that Ms Ali had failed to advise her commercially unsophisticated client on obligations under a commercial lease and to carry out proper due diligence which had an impact on the quality of her advice. This was found, unsurprisingly, to be a failure to act in client best interests. It was agreed that Ms Ali should be fined £10,000 and pay costs of £35,000.
There is a fine line between breach of Principle 7 and negligence. This can make for some interesting arguments in such cases. It is not the SDT’s job to decide whether a solicitor has been negligent.
What I hope for 2022 is that this article has encouraged you to delve more deeply into the SRA Principles. Knowing what they are and how to comply with them is akin to eating your 5 or 10 a day, engaging in vigorous exercise and experimenting with dry January. Professionally nourishing and a stimulating intellectual workout. Enjoy!
On 15 January 2021, the Supreme Court handed down its judgment in FCA v Arch Insurance, a test case concerning the recoverability of losses suffered by businesses under business interruption insurance policies during the lockdown caused by the Covid-19 pandemic. The Supreme Court’s decision ruled in favour of the policyholders relying on business interruption insurance policies.
Legal developments
The FCA brought the test case seeking clarity over some business interruption insurance policies’ wording concerning the Covid-19 pandemic claims by policyholders.
The business interruption insurance wording in Arch Insurance’s policies required the outbreak of a notifiable disease to have happened on the insured premises or within a defined proximity, for example, a 25-mile radius. However, the insurers argued that since the lockdown was a national measure to contain the COVID-19 virus, the business interruption would still have happened even if no COVID-19 cases had occurred within the insured premises or defined proximity.
Insurers relied on the “but for” test of causation. For example, would the loss of business still have happened but for the occurrence of a COVID-19 case in the insured premise or geographical radius?
The Supreme Court rejected the insurers’ argument explaining that the “but for” test was inadequate in this case; there are situations, such as the COVID-19 pandemic, where an insuring clause may respond to many related but uninsured events.
The Supreme Court offered a legal limitation to cause-in-fact or “but for” by reiterating the principle of proximate causation. Every single case of COVID-19 in the country qualified as a proximate cause of loss because each case equally contributed to the national lockdown. Therefore, Any COVID-19 case in the radius of the business was as causative as those outside it. Thus, the causation element was satisfied if there was a single COVID-19 case in the radius of a business.
Positive news for policyholders?
The FCA estimates that approximately 370,000 policyholders are affected by the judgment of the test case. For some of these policyholders, the impact of the judgment has already been positive in terms of financial recovery. The FCA has confirmed that insurers have made £1bn pay-outs to small businesses following the Supreme Court’s decision. However, the delay in recovering any losses, months following the businesses’ closure during the lockdown, means that the difficulties faced by these businesses have not faded.
In addition, many businesses are battling over their claims with insurers who argue that the Supreme Court’s decision does not bind them.
One of the biggest concerns for policyholders is that their arguments for business interruption insurance losses are based on contractual interpretation, which requires court involvement to resolve.
It takes a real-life case to breathe life into the law, especially one as dry as Data Protection flavoured with just a dash of Land Law. And for spicing up our lives, we should give thanks for the case of Mary Fairhurst v Jon Woodard.
How many people consider the Data Protection Act 2018 before installing security cameras. Jon Woodard, an audio-visual technician, living in Thame Oxfordshire, did not when installing cameras around his home, including a Ring Doorbell on his front door and two security cameras whose fields went outside the boundaries of his property. All three devices picked up sound and visuals, and he could watch and listen to recordings of his neighbours and other passers-by on his iPhone. His intention was to prevent crime.
In his enthusiasm for his inventiveness, he showed his neighbour a video of the captured data on his iPhone. The neighbour, a scientist, Dr Mary Fairhurst, was horrified and distressed so much by the knowledge he could pick up her comings and goings and conversations that, after failing to persuade him to compromise, she moved out of the home which she’d lived in for more than twenty years. The situation escalated after uncivil text messages on the part of Mr Woodard. As a result, Dr Fairhurst issued court proceedings claiming Mr Woodard had breached her Data Protection rights.
Mr Woodard argued that his camera collection of data and its processing was necessary to prevent crime, which was accepted as a legitimate interest. The question for the Judge was whether Dr Fairhurst’s right to privacy trumped this.
Helpfully the Judge distinguished between the audio and visual recordings. She found that the audio recordings were collected unlawfully on all three devices. The legitimate aim of preventing crime could be achieved without audio (or by an instrument whose microphone had a much more limited range than Mr Woodard’s devices, including the Ring Doorbell).
On visual data collected by the Ring Doorbell, the Judge found that Dr Fairhurst’s data was only likely to be collected incidentally as she walked past Mr Woodard’s front door. On balance, his crime prevention interest for visual data on that device did not override her right to privacy.
Mr Woodard’s other two devices collected visual and audio data outside the boundaries of his home. The Judge found that the claimed interest of crime prevention was not strong enough to outweigh the right to privacy of Dr Fairhurst. Accordingly, she found that Mr Woodard breached the Data Protection Act. Dr Fairhurst would be entitled to damages and injunctive relief (a remedy that restrains a party from doing certain acts or requires a party to act in a certain way).
The lesson to be learnt is that installing and using these security devices turns one into a data controller for Data Protection purposes. Still, it is also a helpful reminder that we should all strive to be good neighbours, even when challenging.
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