1. Introduction
1.1 Who should read this practice note?
Solicitors, managers of authorised bodies, or lawyer-controlled bodies, who are practising from an office outside the UK.
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1.2 What is the issue?
The Solicitors Regulation Authority (SRA) implemented outcomes-focused regulation (OFR) in October 2011. OFR is a move away from a rules-based approach to one that focuses on high-level outcomes governing practice and the quality of outcomes for clients.
The SRA has published a Handbook, which sets out all the SRA's regulatory requirements. It outlines the ethical standards that the SRA expects of practices and practitioners and the outcomes that the SRA expects them to achieve for their clients.
The SRA Handbook includes a Code of Conduct (the 'SRA Code'), which replaced the Solicitors' Code of Conduct 2007 (the '2007 Code'). The SRA Code establishes outcomes-focused conduct requirements and each chapter outlines outcomes and indicative behaviours (IBs).
The SRA Handbook and Code has been in force since 6 October 2011. Accordingly, the 2007 Code and all of its rules and guidance no longer apply to solicitors' conduct, save in respect of any review by the SRA of conduct taken prior to 6 October 2011 to which the 2007 Code will still be applied.
An overview of OFR can be found on the Law Society's website. This provides information on what the SRA Handbook contains, including a summary of the chapters in the Code of Conduct and a summary of the reporting requirements included throughout the Handbook.
The focus of this practice note is on the SRA Code, the Accounts Rules and the Practice Framework Rules in the Handbook where reference is made to overseas practice.
As the overseas practice provisions are included throughout the Handbook, the purpose of this practice note is to outline the overseas practice provisions so that they are available in an easily accessible format for practitioners. Where applicable it will also note any changes in the overseas provisions from the 2007 Code.
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1.3 Professional conduct
All chapters in the SRA Code are relevant to this issue.
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1.4 Status of this practice note
Practice notes are issued by the Law Society for the use and benefit of its members. They represent the Law Society's view of good practice in a particular area. They are not intended to be the only standard of good practice that solicitors can follow. You are not required to follow them, but doing so will make it easier to account to oversight bodies for your actions.
Practice notes are not legal advice, nor do they necessarily provide a defence to complaints of misconduct or of inadequate professional service. While care has been taken to ensure that they are accurate, up to date and useful, the Law Society will not accept any legal liability in relation to them.
For queries or comments on this practice note, contact the Law Society's Practice Advice Service.
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1.5 Terminology
Must - A specific requirement in legislation or of a principle, rule, outcome or other mandatory provision in the SRA Handbook. You must comply, unless there are specific exemptions or defences provided for in relevant legislation or the SRA Handbook.
Should -
- Outside of a regulatory context, good practice for most situations in the Law Society's view.
- In the case of the SRA Handbook, an indicative behaviour or other non-mandatory provision (such as may be set out in notes or guidance).
These may not be the only means of complying with legislative or regulatory requirements and there may be situations where the suggested route is not the best possible route to meet the needs of your client. However, if you do not follow the suggested route, you should be able to justify to oversight bodies why the alternative approach you have taken is appropriate, either for your practice, or in the particular retainer.
May - A non-exhaustive list of options for meeting your obligations or running your practice. Which option you choose is determined by the profile of the individual practice, client or retainer. You may be required to justify why this was an appropriate option to oversight bodies.
SRA Code - SRA Code of Conduct 2011
2007 Code - Solicitors' Code of Conduct 2007
OFR - Outcomes-focused regulation
SRA - Solicitors Regulation Authority
IB - indicative behaviour
Overseas - outside England and Wales
A glossary of other terms used throughout this practice note is available on the SRA website.
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2. SRA Principles
There are ten mandatory principles which apply to all those the SRA regulates and to all aspects of practice. The principles can be found in the SRA Handbook.
The principles apply to solicitors or managers of authorised bodies who are practising from an office outside the UK. They also apply if you are a lawyer-controlled body practising from an office outside the UK.
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3. Overseas practice in the SRA Code of Conduct 2011
The SRA Code outlines the outcomes-focused conduct requirements. There are no longer any rules and, instead, each chapter outlines outcomes and IBs.
In the Handbook, the overseas practice provisions are outlined at the end of each chapter. This is a change from the 2007 Code in which they were detailed in a single chapter (Rule 15).
3.1 Definition
Overseas practice is defined as:
'Overseas practice means practice from an office outside England and Wales, except in the case of a REL, where it means practice from an office in Scotland or Northern Ireland.'
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3.2 Application of the SRA Code
The SRA Code applies to solicitors, managers of authorised bodies and lawyer-controlled bodies who practice from an office outside the UK.
Any outcome in the SRA Code that does not apply to overseas practice can be disregarded. However, any alternative outcomes that are provided for overseas practice must be complied with.
Legal and professional requirements vary from jurisdiction to jurisdiction and the expectations of clients, lawyers and the courts will be different for each. In your dealings with clients, the opposing party and the opposing party's lawyer, you may need to clarify in advance what rules you are bound by.
If compliance with any outcome in the SRA Code would result in the breaching of local law, this outcome may be disregarded to the extent necessary to comply with that local law.
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3.3 Outcomes and IBs
Each chapter in the SRA Code sets out which outcomes apply to overseas practice and in some cases have specified different outcomes that apply. Outlined below are all the overseas practice provisions and, where relevant, an indication of changes from the 2007 Code.
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3.3.1 Chapter 1- Client care
The general outcomes outlined in chapter 1 do not apply to overseas practice. The following outcomes must be achieved instead:
- OP(1.1): You properly account to your clients for any financial benefit you receive as a result of your instructions unless it is the prevailing custom of your local jurisdiction to deal with financial benefits in a different way;
- OP(1.2): Clients have the benefit of insurance or other indemnity in relation to professional liabilities which takes account of:
- the nature and extent of the risks you incur in your overseas practice;
- the local conditions in the jurisdiction in which you are practising;
- the terms upon which insurance is available;
and you have not attempted to exclude liability below the minimum level required for practice in the local jurisdiction;
- OP(1.3): You do not enter into unlawful contingency fee arrangements.
This area was previously dealt with in Rule 15.02 on Client relations in the 2007 Code. There is less detail in the new outcomes but the three general principles previously outlined in Rule 15.02 are now reflected in these outcomes.
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3.3.2 Chapter 2- Equality and diversity
The general outcomes outlined in chapter 2 do not apply to overseas practice. The following outcome must be achieved instead:
OP(2.1) You do not discriminate unlawfully according to the jurisdiction in which you are practising.
This area was previously dealt with in the 2007 Code under Rule 15.06 on Equality and diversity.
Outcome 2.1 in the SRA Code is not something that was explicitly stated in the 2007 Code, although Rule 1 on Core duties applied to overseas practice. Rule 1.01 set out that, 'You must uphold the rule of law and the proper administration of justice', and this would have encompassed compliance with the equality and diversity provisions of the jurisdiction in which you are practising.
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3.3.3 Chapter 3- Conflict of interests
The general outcomes outlined in chapter 3 apply to overseas practice.
This area was previously dealt with in Rule 15.03 on Conflict of interests in the 2007 Code.
More information on chapter 3 in the SRA Code can be found in the Law Society practice note on Conflicts of interest.
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3.3.4 Chapter 4- Confidentiality and disclosure
The general outcomes outlined in chapter 4 apply to overseas practice.
This area was previously dealt with in Rule 15.04 on Confidentiality in the 2007 Code.
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3.3.5 Chapter 5 - Your client and the court
The general outcomes outlined in chapter 5 apply to overseas practice in relation to litigation or advocacy conducted before a court, tribunal or enquiry in England and Wales or a British court martial.
This was previously dealt with in Rule 15.11 on Litigation and advocacy in the 2007 Code.
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3.3.6 Chapter 6 - Your client and introductions to third parties
The general outcomes outlined in chapter 6 apply to overseas practice.
Chapter 6 introduces a change from the 2007 Code. This area was previously dealt with in Rule 15.09 on Referrals of business, however Rule 15.09 did not apply to overseas practice, (subject to when you accepted referrals of business, making sure there was no breach of the core duties).
This change is also noted below under chapter 9 on Fee sharing and referrals.
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3.3.7 Chapter 7 - Management of your business
The general outcomes outlined in chapter 7 apply to overseas practice.
This area was previously dealt with in the 2007 Code under Rule 15.05 on Business management.
The outcomes in chapter 7 apply in full to overseas practice and this is a change from the position outlined in Rule 15.05 in the 2007 Code. Rule 15.05 did not apply in full to overseas practice but set out specific requirements to ensure that a manager or sole practitioner had been practising for a minimum of 36 months within the last 10 years. It also set out that it should be ensured that a firm is properly managed and supervised.
Now the new outcomes in chapter 7 all apply to overseas practice. These cover:
- governance
- systems and controls to ensure compliance with regulatory requirements
- risk assessment and management
- systems and controls to monitor financial stability
- supervision
- quality assuranc
- outsourcing
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3.3.8 Chapter 8 - Publicity
Outcomes 8.1 and 8.4 in chapter 8 apply to overseas practice. In addition the following outcome must be achieved:
- OP(8.1) Publicity intended for a jurisdiction outside England and Wales must comply with any applicable law or rules regarding lawyers' publicity in the jurisdiction in which your office is based; and the jurisdiction in which the publicity is intended.
This area was previously dealt in the 2007 Code under Rule 15.07 on Publicity. There is no comparable rule in the 2007 Code to the additional outcome O.P 8.1
There are no longer detailed rules on what overseas practices should include on their letterhead (as there were in Rule 15.07) but this is now encompassed by outcomes 8.1 and 8.4 which makes it clear that your publicity should not be inaccurate or misleading and that clients and the public must have appropriate information about you, your firm and how you are regulated.
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3.3.9 Chapter 9 - Fee sharing and referrals
The general outcomes outlined in chapter 9 apply to overseas practice, except where they conflict with the SRA European Cross-Border Practice Rules which will prevail in any conflict.
This area was previously dealt with in Rule 15.08 on Fee sharing and 15.09 on Referrals of business in the 2007 Code.
In relation to Rule 15.08, no changes have been made to the overseas practice provisions.
However, the outcomes in chapter 9 mean that the position on referrals previously outlined in Rule 15.09 has changed. Rule 15.09 did not apply to overseas practice at all (subject to when you accepted referrals of business, making sure there was no breach of the core duties). This is an important change and you should ensure that you understand the new requirement.
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3.3.10 Chapter 10 - You and your regulator
The general outcomes outlined in chapter 10 apply to overseas practice.
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3.3.11 Chapter 11 - Relations with third parties
The general outcomes outlined in chapter 11 apply to overseas practice, with the exception of outcome 11.3 which only applies if the land in question is situated in England and Wales.
This area was previously dealt with in the 2007 Code under Rule 15.10 on Relations with third parties.
Rule 15.10 in the 2007 Code did not apply Rule 10 in the 2007 Code in full to overseas practice. Undertakings were dealt with separately in the context of overseas practice and rule 15.10(2) contained specific provisions relating to this issue. Chapter 11 in the 2011 Code makes it clear that the relevant outcomes must be achieved by the regulated community in practice both inside and outside England and Wales.
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3.3.12 Chapter 12 - Separate businesses
If you practise from an office outside England and Wales and you have a separate business, outcomes 12.3 to 12.6 in chapter 12 apply.
Outcomes 12.1 and 12.2 on prohibited separate business do not apply to overseas practice. However, the outcomes on permitted separate business do apply. If you have an interest in, actively participate in, own or are a firm that is owned by or connected with a permitted separate business, you must therefore provide clients with appropriate information about that business. You do not need to provide information on prohibited separate businesses, as outcomes 12.1 and 12.2 do not apply.
This area was previously dealt with in the 2007 Code under Rule 15.21 on Separate business. The new outcomes are a change from Rule 15.21 which required that information was given to clients for any separate business run by an overseas practice.
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3.4 Table of where chapters in the SRA Code were covered in the Solicitors' Code of Conduct 2007
| SRA Code of Conduct | Solicitors' Code of Conduct 2007 |
|---|
| Principles, Chapter 13 | Rule 15.01 - Core duties |
| Chapter 1 | Rule 15.02 - Client relations |
| Chapter 2 | Rule 15.06 - Equality and diversity |
| Chapter 3 | Rule 15.03 - Conflict of interests |
| Chapter 4 | Rule 15.04 - Confidentiality |
| Chapter 5 | Rule 15.11 - Litigation and advocacy |
| Chapter 6 | Rule 15.09 - Referrals of business |
| Chapter 7 | Rule 15.05 - Business Management |
| Chapter 8 | Rule 15.07 - Publicity |
| Chapter 9 | Rule 15.08 - Fee sharing and Rule 15.09 - Referrals of business |
| Chapter 10 | n/a |
| Chapter 11 | Rule 15.10 - Relations with third parties |
| Chapter 12 | Rule 15.21 - Separate businesses |
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4. SRA Accounts Rules 2011
4.1 Definition
Overseas is defined in Part A - General, Rule 2- Interpretation, of the Accounts Rules:
'Overseas' means outside England and Wales.
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4.2 Part G - Overseas practice
Part G, Rules 47- 52, of the Accounts Rules deals with overseas practice. Rule 47 clearly sets out that the purpose of applying different accounts provisions to overseas practice is to ensure similar protection for client money but with rules which are more adaptable to conditions in other jurisdictions.
If compliance with any provision in part G of the Accounts Rules would result in the breaching of local law, this provision may be disregarded to the extent necessary to comply with that local law.
Rule 49 sets out the provisions in relation to interest and Rule 50 sets out the provisions in relation to accounts. Rule 50 includes dealings with clients' money and accountants' reports, which are the same requirements as those set out in Rule 15.27 in the 2007 Code.
Rule 51 outlines the requirements on the production of documents, information and explanations.
Rule 52 deals with waivers. The Rule 52 guidance note states that requests for waivers should be made to the Professional Ethics Guidance Team, and that a waiver will only be granted where you can show that your circumstances are exceptional.
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5. SRA Practice Framework Rules 2011
5.1 Compliance of Overseas practice to practice requirements
Part 4, Rule 20 of the Practice Framework Rules outlines the overseas practice provisions.
Rule 20.1 states that subject to Rules 20.2 to 20.4, the requirements in the Practice Framework Rules apply to the overseas practice of a solicitor, REL, RFL or authorised body.
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5.1.1 Rules 20.2-20.4
Rules 20.2 set out that the rules in Part 2 and some rules in Part 3 only apply to overseas practice as:
- a manager of an authorised body, if you are a lawyer of England and Wales or an individual non-lawyer;
- a member or shareowner of an authorised body which is a company, if you are a solicitor or (in relation to practice from an office in Scotland or Northern Ireland) an REL.
The Rules in Part three which apply in this manner are:
- 17.2 on Authorised bodies which are companies;
- 18.4 on Information and documentation;
- 19 on Compliance with practice requirements, and
- 21 on Waivers
Under Rule 20.3, to practise through a firm which has no office in England and Wales, solicitors or RELs are not required to comply with either:
- Rule 13, on Eligibility criteria and fundamental requirements for recognised bodies, or
- Rule 14, on Eligibility criteria and fundamental requirements for licensed bodies, as appropriate.
You must however comply with Rule 1, on Solicitors, and Rule 2 on RELs.
Rule 20.4 states that if compliance with any applicable provision of these rules would result in your breaching local law, you may disregard that provision to the extent necessary to comply with that local law.
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5.2 In-house practice overseas
Part 1, Rule 4 of the Practice Framework Rules outlines the in-house practice overseas provisions.
Rule 4.22 states that the rules 4.10 and 4.11, on pro-bono work, apply to overseas practice. However, 4.23 clearly sets out that the other provisions of Rule 4 on in-house practice do not apply to overseas practice. This is subject to complying with Rules 4.24 and 4.25.
The rules on in-house practice overseas are the same as those in Rule 15.13 of the 2007 Code.
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6. SRA Authorisation Rules for Legal Services Bodies and Licensable Bodies 2011
6.1 Register and certificate of authorisation
Rule 34 of the Authorisation Rules sets out that the SRA must keep a register of all bodies that they have authorised. Details within the register must include whether the authorised body is a company and whether it is an overseas company registered in England and Wales, Scotland or Northern Ireland.
Rule 35 states that the SRA must issue a certificate of authorisation when a body is granted authorisation. As in the register, the certificate of authorisation must state whether the body is a company and whether it is an overseas company registered in England and Wales, Scotland or Northern Ireland.
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6.2 Compliance officers
Information about on Compliance Officers can be found in the Law Society practice note on compliance officers.
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7. More information
7.1 Law Society
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7.2 Other
Solicitors Regulation Authority's Professional Ethics Helpline for advice on conduct issues
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