Solicitors' Code of Conduct

Rule 15: Overseas practice

Use your browser's find function (generally CTRL-F on Windows, command-F on Mac) to search within this rule. This information is already formatted for correctly printing onto an A4 page.

Introduction

Rule 15 is specific to overseas practice, which is defined in rule 24 (Interpretation) to mean the practice of a solicitor or a recognised body from an office or offices outside England and Wales; and the practice of an REL from an office or offices in Scotland or Northern Ireland.

Rule 15 applies the provisions of these rules to your overseas practice. Sometimes rule 15 disapplies one of these rules, or a provision in one of the rules, and in some cases substitutes alternative provisions.

Rule 15 also makes specific provisions in relation to accounts, deposit interest and professional indemnity, because the equivalent domestic rules do not apply to your overseas practice.

The purpose of applying different provisions to overseas practice is to ensure similar protection for clients but by way of rules which are more adaptable to conditions in other jurisdictions.

Rule

15.01 Core duties (rule 1) application, and conflicts of rules

The core duties
Application, and conflicts of rules
  • (2)

    These rules and the principles of professional conduct apply to the practice of a solicitor or a recognised body from an office outside England and Wales, and to the practice of an REL from an office in Scotland or Northern Ireland, with the following exceptions:

    • (a)

      a recognised body incorporated outside England and Wales is subject only to the following of these rules in relation to its practice outside England and Wales:

    • (b)

      if this rule states that a rule or a provision of these rules does not apply to your overseas practice, you may disregard that rule or provision in relation to your overseas practice, but you must comply with any alternative provision which is substituted by this rule; and

    • (c)

      if compliance with any 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.

  • (3)

    In this rule, in relation to practice from an office in Scotland or Northern Ireland:

    • (a)

      references to a firm with a controlling majority of partners or owners who are, or which are controlled by, solicitors must be read as referring to a controlling majority of partners or owners who are, or which are controlled by, solicitors and/or RELs;

    • (b)

      references to a solicitor sole principal must be read as referring to a solicitor or REL sole principal; and

    • (c)

      references to lawyers of England and Wales must be read as including lawyers registered in England and Wales under the Establishment Directive.

15.02 Client relations (rule 2)

  • (1)

    Rule 2 (Client relations) does not apply to your overseas practice but you must comply with (2) to (4) below.

  • (2)
    • (a)

      You must pay to your clients any commission received, unless:

      • (i)

        the client, having been told the amount of the commission (or an approximate amount if the precise amount is not known) has agreed that you or your firm may keep the commission; or

      • (ii)

        in all the circumstances it is not reasonable to pay the commission to the client.

    • (b)

      In deciding whether it is reasonable to pay a commission to your client you must have regard to all the circumstances, including the law governing the retainer and the prevailing custom of lawyers in the jurisdiction in which you are practising.

  • (3)

    If you are a principal in a firm you must not exclude or attempt to exclude by contract all liability to your clients. However, you may limit your liability, provided that such limitation:

    • (a)

      is not below the minimum level of cover you would need in order to comply with 15.26 below;

    • (b)

      is brought to the client's attention; and

    • (c)

      is in writing.

  • (4)
    • (a)
      • (i)

        You must not enter into an arrangement to receive a contingency fee for work done in prosecuting or defending any contentious proceedings before a court of England and Wales, a British court martial or an arbitrator where the seat of the arbitration is in England and Wales, except as permitted by statute or the common law.

      • (ii)

        If you enter into a conditional fee agreement with a client in relation to such proceedings, you must explain, both at the outset and, where appropriate, as the matter progresses:

        • (A)

          the circumstances in which your client may be liable for your costs, and whether you will seek payment of these from the client, if entitled to do so; and

        • (B)

          if you intend to seek payment of any or all of your costs from your client, you must advise your client of their right to an assessment of those costs.

      • (b)

        You must not enter into an arrangement to receive a contingency fee for work done in prosecuting or defending any contentious proceedings before a court of an overseas jurisdiction or an arbitrator where the seat of the arbitration is overseas except to the extent that a lawyer of that jurisdiction would be permitted to do so.

    15.03 Conflict of interests (rule 3)

    Rule 3 (Conflict of interests) applies to your overseas practice, except that you do not have to comply with 3.07 to 3.22 (provisions relating to conveyancing of land) if the land in question is situated outside England and Wales.

    15.04 Confidentiality (rule 4)

    Rule 4 (Confidentiality and disclosure) applies to your overseas practice.

    15.05 Business management (rule 5)

    • (1)

      Rule 5 (Business management in England and Wales) does not apply to your overseas practice but you must comply with (2) and (3) below.

    • (2)
      • (a)

        You must not set up as a solicitor sole principal unless you have been entitled to practise as a lawyer for a minimum of 36 months within the last 10 years.

      • (b)

        If you are:

        • (i)

          a partner in a partnership with a controlling majority of partners who are, or which are controlled by, solicitors; or

        • (ii)

          a director of a body corporate with a controlling majority of owners who are, or which are controlled by, solicitors,

        you must ensure that the partnership has at least one partner, or the body corporate has at least one director if it is a company, or at least one member if it is an LLP, who has been entitled to practise as a lawyer for a minimum of 36 months within the last 10 years.

    • (3)

      If you are:

      • (a)

        a solicitor sole principal;

      • (b)

        a partner in a partnership with a controlling majority of partners who are, or which are controlled by solicitors; or

      • (c)

        a director of a company or a member of an LLP with a controlling majority of owners who are, or which are controlled by, solicitors,

      you must ensure that the firm is managed and supervised with a view to ensuring that its affairs are properly conducted at all times; and that clients' matters receive proper attention, and are supervised so as to ensure that the quality of the work is checked with reasonable regularity by suitably experienced and competent persons within the firm.

    15.06 Equality and diversity (rule 6)

    Rule 6 (Equality and diversity) does not apply to your overseas practice, but rule 1 (Core duties) will always apply.

    15.07 Publicity (rule 7)

    Rule 7 (Publicity) applies to your overseas practice, except that:

      • (a)

        rule 7 (Publicity) does not apply to the website, e-mails, text messages or similar electronic communications of any practice you conduct from an office in an EU state other than the UK; and

      • (b)

        7.07 (Letterhead) does not apply, but:

        • (i)

          if an REL is named on the letterhead (including a fax heading) of an office in Scotland or Northern Ireland, the letterhead must also identify:

          • (A)

            the European jurisdiction(s) – local or national as appropriate – under whose professional title the REL is practising;

          • (B)

            the REL's professional title(s), expressed in an official language of the European state concerned; and

          • (C)

            the fact that the REL is registered with the Solicitors Regulation Authority of England and Wales; and

        • (ii)

          if you are a partner in a partnership with a controlling majority of partners who are, or which are controlled by, solicitors, or a director of a company or member of an LLP with a controlling majority of owners who are, or which are controlled by, solicitors, you must make clear on the firm's letterhead (including a fax heading) that it is the letterhead of a law firm.

    15.08 Fee sharing (rule 8)

    Rule 8 (Fee sharing) applies to your overseas practice.

    15.09 Referrals of business (rule 9)

    • (1)

      Rule 9 (Referrals of business) does not apply to your overseas practice, but you must comply with (2) below.

    • (2)

      When you accept referrals of business from other persons and when you refer business to other persons, you must ensure that there is no breach of rule 1 (Core duties) or any other applicable provision of these rules.

    15.10 Relations with third parties (rule 10)

    • (1)

      Rule 10 (Relations with third parties) applies to your overseas practice except as provided in (2) and (3) below.

    • (2)

      10.05 (Undertakings) does not apply, but:

      • (a)

        you must fulfil an undertaking which you give:

        • (i)

          in the course of practice;

        • (ii)

          outside the course of practice, but as a "solicitor"; or

        • (iii)

          if you are an REL based at an office in Scotland or Northern Ireland, and you give the undertaking within the UK, outside your practice as an REL, but as a lawyer of an Establishment Directive state;

      • (b)

        you must fulfil an undertaking within a reasonable time; and

      • (c)

        if you give an undertaking which is dependent upon the happening of a future event, you must notify the recipient immediately if it becomes clear that the event will not occur; and

    • (3)

      10.06 (Dealing with more than one prospective buyer in a conveyancing transaction) applies only if the land in question is situated in England and Wales.

    15.11 Litigation and advocacy (rule 11)

    Rule 11 (Litigation and advocacy) applies to your overseas practice in relation to litigation or advocacy conducted before a court, tribunal or inquiry in England and Wales or a British court martial. Rule 11 does not apply to your overseas practice in relation to litigation or advocacy conducted before a court or tribunal in another jurisdiction, but rule 1 (Core duties) will always apply.

    15.12 Framework of practice (rule 12)

    Rule 12 (Framework of practice) applies to your overseas practice.

    15.13 In-house practice (rule 13)

    • (1)

      13.04 (Pro bono work) applies to your overseas practice. The other provisions of rule 13 (In-house practice) do not apply to your overseas practice, but you must comply with (2) below.

    • (2)
      • (a)

        Subject to (b) below, you may act as an in-house lawyer, but only for:

        • (i)

          your employer;

        • (ii)

          a company or organisation controlled by your employer or in which your employer has a substantial measure of control;

        • (iii)

          a company in the same group as your employer;

        • (iv)

          a company which controls your employer; or

        • (v)

          an employee (including a director or a company secretary) of a company or organisation under (i) to (iv) above, provided that the matter relates to or arises out of the work of that company or organisation, does not relate to a claim arising as a result of a personal injury to the employee, and no charge is made for your work unless those costs are recoverable from another source.

      • (b)

        If you are a solicitor registered in another state under the Establishment Directive with the professional body for a local legal profession you may practise in-house to the extent that a member of that legal profession is permitted to do so.

    15.14 Incorporated practice (rule 14)

    • (1)
      • (a)

        Rule 14 (Incorporated practice) applies to a recognised body in relation to the recognised body's overseas practice.

      • (b)

        Rule 14 (Incorporated practice) applies to the overseas practice of the directors, members and shareowners of a recognised body, but 14.01(4) applies in relation to a recognised body incorporated outside England and Wales only where the provision in question is specifically applied to the recognised body by 15.01(2)(a).

    • (2)

      If you are a solicitor or an REL you are not required to comply with rule 14 (Incorporated practice) in order to practise through a body corporate which has no office in England and Wales, but you must comply with 12.01(3) or 12.02(3).

    15.15 Deposit interest

    • (1)

      You must comply with (2) below, if:

      • (a)

        you have held client money as a sole principal; or

      • (b)

        you are a partner in a partnership which has held client money and:

        • (i)

          the partnership has no separate legal identity and either a controlling majority of partners are, or are controlled by, solicitors, or lawyers of England and Wales form the national group of lawyers with the largest share of control of the partnership, either as partners or by controlling partners; or

        • (ii)

          the partnership has a separate legal identity and a controlling majority of partners are or are controlled by solicitors; or

      • (c)

        you are a director or owner of a body corporate which is not a recognised body and which has held client money, and a controlling majority of the owners are, or are controlled by, solicitors.

    • (2)

      If interest ought, in fairness, to be earned for the client on client money held under (1) above, you must ensure that:

      • (a)

        the client money is dealt with so that proper interest is earned upon it, and that the interest is paid to the client;

      • (b)

        the client is paid a sum equivalent to the interest that would have been earned if the client money had earned proper interest; or

      • (c)

        any alternative written agreement with the client setting out arrangements regarding the payment of interest on that money is carried out.

    • (3)

      In deciding whether interest ought, in fairness, to be earned for a client on client money, you must have regard to all the circumstances, including:

      • (a)

        the amount of the money;

      • (b)

        the length of time for which you are likely to hold the money; and

      • (c)

        the law and prevailing custom of lawyers practising in the jurisdiction in which you are practising.

    15.16 European cross-border practice (rule 16)

    Rule 16 (European cross-border practice) applies to your overseas practice, to the extent that such practice is European cross-border practice as defined in 16.01(1).

    15.17 Insolvency practice (rule 17)

    Rule 17 (insolvency practice) does not apply to your overseas practice except in relation to appointments appertaining to orders made in the courts of England and Wales.

    15.18 Property selling (rule 18)

    Rule 18 (Property selling) applies to your practice from offices in Scotland or Northern Ireland but not to your practice from offices outside the UK.

    15.19 Financial services (rule 19)

    15.20 Requirements of practice (rule 20)

    Rule 20 (Requirements of practice) applies to your overseas practice.

    15.21 Separate businesses (rule 21)

    • (1)
      • (a)

        Rule 21 (Separate businesses) applies to you if you practise from an office in England and Wales and you have a separate business, wherever the separate business is situated.

      • (b)

        If you do not practise from an office in England and Wales but you practise from an office outside England and Wales and you have a separate business, rule 21 (Separate businesses) does not apply but you must comply with (2) below, wherever the separate business is situated.

    • (2)

      In relation to your separate business:

      • (a)

        you must do nothing in the course of practice, or in the course of making referrals to the business or accepting referrals from the business, which would contravene rule 1 (Core duties);

      • (b)

        you must not allow the separate business to be held out or described in such a way as to suggest that it is carrying on the practice of a lawyer regulated by the Solicitors Regulation Authority;

      • (c)

        you must ensure that all paperwork, documents, records or files relating to the separate business and its customers are kept separate from those of any firm or in-house practice, even where a customer of the separate business is also a client of the firm or in-house practice;

      • (d)

        you must not allow the client account used for any firm or in-house practice to be used to hold money for the separate business, or for customers of the separate business in their capacity as such; and

      • (e)

        you must ensure that if you or your firm refer(s) a client to the separate business, the client is first informed of your interest in the separate business, that the separate business is not regulated by the Solicitors Regulation Authority of England and Wales, and that the statutory protections attaching to clients of a lawyer regulated by the Authority are not available to clients of the separate business.

    15.22 Waivers (rule 22)

    Rule 22 (Waivers) applies to your overseas practice.

    15.23 Application (rule 23)

    Rule 23 (Application) applies to your overseas practice.

    15.24 Interpretation (rule 24)

    Rule 24 (Interpretation) applies to your overseas practice.

    15.25 Commencement and repeal (rule 25)

    Rule 25 (Commencement and repeals) applies to your overseas practice.

    15.26 Professional indemnity

    • (1)

      You must comply with (2) below in relation to your overseas practice, unless you are practising only in-house in compliance with 15.13.

    • (2)
      • (a)

        You must ensure that in relation to your overseas practice you are at all times covered by insurance or other indemnity against professional liabilities.

      • (b)

        The extent and amount of the insurance or other indemnity need not exceed the current requirements of the Solicitors' Indemnity Insurance Rules or any other current rules made under section 37 of the Solicitors Act 1974 but must be reasonable having regard to:

        • (i)

          the nature and extent of the risks you incur in your overseas practice;

        • (ii)

          the local conditions in the jurisdiction in which you are practising; and

        • (iii)

          the terms upon which insurance or other indemnity is available.

    15.27 Accounts

    • (1)

      You must comply with (3) to (5) below if you have held or received client money or controlled trust money:

      • (a)

        as the sole principal in a firm which has held or received client money or controlled trust money;

      • (b)

        as a named trustee; or

      • (c)

        as a partner in a partnership which has held or received client money or controlled trust money, if the partnership has no separate legal identity and:

        • (i)

          a majority of the partners are or are controlled by solicitors; or

        • (ii)

          lawyers of England and Wales form the national group of lawyers with the largest share of control of the partnership, either as partners or by controlling partners.

    • (2)

      You must also comply with (3) to (5) below as if you have held or received client money or controlled trust money as a principal, if you are:

      • (a)

        a director or owner of a body corporate which is not a recognised body and which has held or received client money or controlled trust money, if a controlling majority of the body's owners are or are controlled by solicitors; or

      • (b)

        a partner in a partnership with separate legal identity which has held or received client money or controlled trust money, if a controlling majority of the partners are or are controlled by solicitors.

    Dealings with client money
    • (3)

      In all dealings with client money, you must ensure that:

      • (a)

        it is kept separate from money which is not client money or controlled trust money in a client account;

      • (b)

        on receipt, it is paid without delay into a client account and kept there, unless the client has expressly or by implication agreed that the money shall be dealt with otherwise;

      • (c)

        it is not paid or withdrawn from a client account except on the specific authority of the client or where the payment or withdrawal is properly required:

        • (i)

          for a payment to or on behalf of the client;

        • (ii)

          for or towards payment of a debt due to the firm from the client or in reimbursement of money expended by the firm on behalf of the client; or

        • (iii)

          for or towards payment of costs due to the firm from the client, provided that a bill of costs or other written intimation of the amount of the costs incurred has been delivered to the client and it has thereby (or otherwise in writing) been made clear to the client that the money held will be applied in payment of the costs due;

      • (d)

        accounts are kept at all times, whether by written, electronic, mechanical or other means, to:

        • (i)

          record all dealings with client money in any client account;

        • (ii)

          show all client money received, held or paid, distinct from any other money, and separately in respect of each client; and

        • (iii)

          ensure that the firm is able at all times to account, without delay, to each and every client for all money received, held or paid on that client's behalf; and

      • (e)

        all accounts, books, ledgers and records kept in relation to the firm's client account(s) are preserved for at least six years from the date of the last entry therein.

    Dealings with controlled trust money
    • (4)

      If you hold or receive money subject to a controlled trust of which you are a trustee, you must:

      • (a)

        keep it separate from money which is not client money or controlled trust money in a client account;

      • (b)

        pay controlled trust money without delay into a client account and keep it there, unless you pay it straight over to a third party in the execution of the trust;

      • (c)

        make no payment or withdrawal of controlled trust money out of a client account, except in proper execution of the trust under which it is held;

      • (d)

        keep accounts at all times, whether by written, electronic, mechanical or other means, to:

        • (i)

          show all your dealings with money received, held or paid on account of controlled trusts;

        • (ii)

          record all your dealings separately in respect of each controlled trust of which you are a trustee; and

        • (iii)

          distinguish money you have received, held or paid subject to a controlled trust from money you have received, held or paid for some other reason,

        and either keep such accounts together, centrally, or maintain a central register of controlled trusts of which you are a trustee; and

      • (e)

        preserve all accounts, books, ledgers and records of your dealings with money you receive, hold or pay which is subject to a controlled trust for at least six years from the date of the last entry therein.

    Accountants' reports
    • (5)
      • (a)

        You must deliver an accountant's report in respect of any period during which:

        • (i)

          you or your firm have held or received client money or controlled trust money and you were subject to (3) or (4) above; or

        • (ii)

          you have been a director of a company, or a member of an LLP, which, as a recognised body was subject to (3) or (4) above.

      • (b)

        The accountant's report must be signed by the reporting accountant, who must be an accountant qualified in England and Wales or in the overseas jurisdiction where your office is based, or by such other person as the Solicitors Regulation Authority may think fit. The Authority may for reasonable cause disqualify a person from signing accountants' reports.

      • (c)

        The accountant's report must be based on a sufficient examination of the relevant documents to give the reporting accountant a reasonable indication whether or not you have complied with (3) and/or (4) above, as appropriate, during the period covered by the report, and must include the following:

        • (i)

          your name, practising address(es) and practising style and the name(s) of your partner(s), and those details for a body corporate through which you practise if relevant;

        • (ii)

          the name, address and qualification of the reporting accountant;

        • (iii)

          an indication of the nature and extent of the examination the reporting accountant has made of the relevant documents;

        • (iv)

          a statement of the total amount of money held at banks or similar institutions on behalf of clients and controlled trusts, and of the total liabilities to clients and controlled trusts, on any date selected by the reporting accountant (including the last day), falling within the period under review; and an explanation of any difference between the total amount of money held for clients and controlled trusts and the total liabilities to clients and controlled trusts;

        • (v)

          if the reporting accountant is satisfied that (so far as may be ascertained from the examination) you have complied with (3) and/or (4) above, as appropriate, during the period covered by the report, except for trivial breaches, or situations where you have been bound by a local rule not to comply, a statement to that effect; and

        • (vi)

          if the reporting accountant is not sufficiently satisfied to give a statement under (v) above, details of any matters in respect of which it appears to the reporting accountant that you have not complied with (3) and/or (4) above, as appropriate.

      • (d)

        You need not deliver an accountant's report until after the end of any period of 12 months, ending 31 October, during which you or your firm first held or received client money or controlled trust money subject to (3) or (4) above, if you, or your firm, had not held or received any such money in the 12 months immediately preceding that period, provided that the accountant's report then delivered includes the period when such money was first held or received.

Guidance to rule 15 – Overseas practice

How these rules apply to overseas practice

  • 1.

    These rules affect solicitors, RELs, RFLs and recognised bodies differently as regards overseas practice.

    • (a)

      Solicitors, and recognised bodies incorporated in England and Wales, are subject to these rules in relation to practice from offices outside England and Wales.

    • (b)

      RELs are subject to these rules in relation to practice from offices in Scotland and Northern Ireland, but not in relation to practice from offices outside the UK.

    • (c)

      Recognised bodies incorporated outside England and Wales are not subject to these rules in relation to practice from offices outside England and Wales, except as set out in 15.01(2)(a).

    • (d)

      RFLs are not directly subject to these rules outside England and Wales, except for 1.06 (Public confidence) and 12.03(2) and (3). However, an RFL will be affected by the rules in relation to overseas offices, if practising as a partner in an MNP, a director of a recognised body which is a company, or a member of a recognised body which is an LLP, to the extent that other partners are, or the recognised body is, subject to them.

  • 2.

    You are "practising from an office outside England and Wales" if you are a partner in a partnership with an office outside England and Wales, even if you are not based there. If you are an owner or director of an overseas body corporate which practises law, you are "practising from an office outside England and Wales" even if you are not based there – see rule 24 (Interpretation).

Core duties – 15.01(1)

  • 3.

    Rule 1 (Core duties) applies to your overseas practice because these duties are fundamental to your profession. However, although lawyers' professional cultures are usually similar, legal and professional requirements vary from jurisdiction to jurisdiction, and therefore the specific expectations of clients, local lawyers and the courts will be different. It may be necessary to clarify in advance what rules you are bound by, in relation to your dealings with your client, the opposing party and the opposing party's lawyer, and in particular it may be necessary to clarify in advance the rules by which the opposing party's lawyer is bound.

    In some jurisdictions all communications between lawyers (written or by word of mouth) are automatically regarded as not to be produced in court and as not to be disclosed to others, even the lawyers' clients. In other jurisdictions such communications must be marked "confidential" before they are to be regarded in this way. On the other hand, in some jurisdictions (as will normally be the case for an English solicitor) the lawyer has to keep the client fully informed of all relevant communications from the lawyer acting for another party, and marking a letter "confidential" is no more than a reminder to the recipient that it is not to be disclosed to anyone but the other lawyer's client. In some jurisdictions, if a lawyer wishes to indicate that a letter is sent in an attempt to settle a dispute, and is not to be produced in court, the lawyer should mark the letter as "without prejudice". These national differences give rise to many misunderstandings, so you need to be careful in conducting cross-border correspondence. Subrule 16.05 lays down specific requirements in relation to cross-border correspondence in Europe.

Conflicts of rules – 15.01(2)(c)

  • 4.

    A rule is applicable if you are required by law to comply with it. A conflict of rules can arise when you are required to comply with two applicable rules, but if you comply with one rule you will breach the other. This situation can arise when you are required by local or EU legislation to comply with the rules of the local legal profession. This may occur, for instance, where:

    • (a)

      you are a solicitor registered in another jurisdiction under the Establishment Directive, and there is a conflict between one of the local rules and one of the solicitors' rules; or

    • (b)

      you are practising under dual title, e.g. as a solicitor and as a New York attorney, and a rule of the New York Bar conflicts with one of the solicitors' rules.

  • 5.

    If a local rule applies, you cannot choose to comply only with that rule, if you can also comply with the solicitors' rule. You must comply with both, which will mean meeting the stricter standard. However, 15.01(2) addresses the possibility of a conflict of rules by disapplying any provisions of the solicitors' rules to the extent (and no more) that it conflicts with an applicable local rule. In a situation where compliance with both rules might be possible but perhaps create a bizarre result, application can be made to the Solicitors Regulation Authority for a waiver.

  • 6.

    Rule 15 modifies the provisions of other rules to allow for adaptation to the legal and professional framework of the jurisdiction in which you are practising. Sometimes more general provisions are substituted, in recognition of the fact that legal and market conditions may be very different in other jurisdictions.

  • 7.

    Where a rule relates closely to the legal or regulatory framework in England and Wales it may be disapplied by rule 15 without a substitute. If a rule applies in part – for example rule 3 (Conflict of interests) – or in full – for example rule 4 (Confidentiality and disclosure), you will need to refer to that rule and its guidance, as well as the provisions in rule 15 and this guidance. Even if rule 15 has completely replaced the provisions of another rule, the guidance on the corresponding rule may help you to understand how you are expected to act.

Client relations – 15.02

  • 8.

    This provision embodies three general principles.

    • (a)

      You must account to your client for any commission or secret profit, unless your client agrees otherwise in full knowledge of the amount or approximate amount involved. However, the requirement does not apply if, in all the circumstances, it is not reasonable to pay the commission to the client, taking account of the wide differences in conditions outside England and Wales. For example, the general custom, or the custom in legal practice in that jurisdiction might make it reasonable to deal with commissions in a different way.

    • (b)

      For more information on limitation of liability, see the guidance to 2.07 where appropriate to your overseas practice.

    • (c)

      You must not enter into an unlawful contingency fee arrangement (see also the guidance to 2.04).

Equality and diversity – 15.06

  • 9.

    Because rule 6 (Equality and diversity) largely reflects UK statutes its detailed requirements are unsuitable for application outside the jurisdiction. However rule 1 (Core duties) applies to your overseas practice. Subrule 1.01 (Justice and the rule of law) requires that "You must uphold the rule of law and the proper administration of justice". This would normally include compliance with the equality and diversity provisions of the jurisdiction(s) in which you practise.

Publicity – 15.07

  • 10.

    The requirements of rule 7 (Publicity) on publicity apply except as regards the emails, websites etc. of an office in an EU state other than the UK, and the requirements of 7.07 (Letterhead) which are replaced by 15.07(b) in relation to your overseas practice. When considering your publicity in relation to the guidance to rule 7 you should bear in mind that the law of the jurisdiction in which your overseas office is based will apply rather than the law of England and Wales; and that you may also be directly subject to local rules. You should therefore interpret the guidance to rule 7 in the light of the following:

    • (a)

      Publicity intended for a jurisdiction outside England and Wales must comply with:

      • (i)

        any applicable law or rules regarding lawyers' publicity in the jurisdiction in which your office is based;

      • (ii)

        the applicable provisions of rule 7 and 15.07; and

      • (iii)

        if the publicity is intended for a third jurisdiction, the rules in force in the target jurisdiction governing lawyers' publicity.

    • (b)

      Your publicity will not breach rule 7 through being incidentally received in a jurisdiction where it is not permitted (this is important in relation to a website, which can be accessed worldwide).

    • (c)

      Your website must comply with the E-Commerce Directive 2000/31/EC and, if you are established anywhere within the EU, with the relevant implementing legislation and the rules which apply to you by virtue of your establishment in an EU state other than the UK.

Fee sharing – 15.08

  • 11.

    In general, you must not share your professional fees with a non-lawyer other than your partner, a retired or predecessor partner, an employee, a director or owner of your firm or a body corporate carrying on the practice of lawyers and wholly owned by lawyers. You may, however, share your professional fees with a non-lawyer for the purpose of facilitating the introduction of capital and/or the provision of services to your firm, though not in relation to European cross-border practice – see rule 8 (Fee sharing) and rule 16 (European cross-border practice) and the attached guidance. Because, subject to the requirements of rule 12 (Framework of practice), you are allowed to practise overseas in partnership with non-lawyers, you are also allowed to share fees with a non-lawyer partner. This does not, however, extend to non-lawyers who are not your partners, so you are not allowed to share fees with another solicitors' firm which has non-lawyer partners or owners.

Undertakings – 15.10(2)

  • 12.

    The obligation on you as a principal to comply with undertakings given by your firm does not apply to you if you practise from an office outside England and Wales, because your other partners may not be subject to the regulatory powers of the Solicitors Regulation Authority. You are, however, required to comply with any undertaking you give yourself, and 15.10(2) is not intended to absolve you from any responsibilities you have as a principal.

Framework of practice – 15.12

  • 13.

    Rule 12 (Framework of practice) applies in full to your overseas practice. An overseas firm – that is, a firm which has no office in England and Wales – may have lawyer principals, directors and owners who are not registered with the Solicitors Regulation Authority but would need to be registered if the firm had an office in England and Wales. An overseas firm may also have non-lawyer principals, directors and/or owners, provided there is majority control by lawyers and no breach of applicable local rules, or rules applying in an Establishment Directive state.

In-house practice – 15.13

  • 14.

    If you are employed at an office outside England and Wales (or in Scotland or Northern Ireland if you are an REL) 15.13 replaces rule 13 (In-house practice) with more general requirements. In-house practice overseas is defined differently from in-house practice in England and Wales – see rule 24 (Interpretation). If your employer is structured in a way which would allow a solicitor or an REL to be a partner, director or owner under 12.01(3) and 12.02(3) you will be practising in a firm as defined in rule 24 and will not be practising in-house.

  • 15.

    Note also that if you are registered with another regulatory body under the Establishment Directive 15.13(2)(b) allows you to practise in-house to the extent allowed to the profession governed by that regulatory body. This may be more or less restrictive than the requirements of these rules.

Deposit interest – 15.15

  • 16.

    In relation to overseas practice, you are not bound by the deposit interest requirements in the Solicitors' Accounts Rules 1998, but by those in 15.15. You must ensure that a client gets proper interest – but this is subject to the proviso that the circumstances must be such that interest ought, in fairness, to be earned for the client. This might not be so if the interest is or would be negligible, or it is customary in that jurisdiction to deal with interest in a different way. It is also open to you to enter into a written agreement with the client regarding the payment of interest. Subrule 15.15 will not apply to you as a partner in a partnership which has held the money, provided that neither of the following apply:

    • (a)

      a majority of the partners are solicitors, bodies corporate controlled by solicitors or partnerships with separate legal personality controlled by solicitors;

    • (b)

      lawyers of England and Wales form the national group of lawyers with the largest share of control of the partnership, either as partners or by controlling partners.

    However, you will remain bound by any applicable local rules of law or conduct regarding deposit interest.

European cross-border practice – 15.16

Separate businesses – 15.21

  • 19.

    Rule 21 (Separate businesses) and 15.21 do not regulate your separate business, but regulate the interface between a firm or in-house practice and a business which is not regulated by the Solicitors Regulation Authority, wherever the separate business is situated or carries on business. Therefore, if you have a separate business but have no office in England and Wales only 15.21 will apply. However, if you also practise from an office in England and Wales, the more detailed provisions of rule 21 will apply.

  • 20.

    Subrule 15.21 completely replaces the provisions of rule 21 (Separate businesses) if you practise wholly outside England and Wales. It applies a lighter regime than rule 21. The requirements of 15.21 are mainly designed to ensure that:

    • (a)

      your compliance with rule 1 (Core duties) as a practising lawyer regulated by the Solicitors Regulation Authority is not compromised by your involvement with the separate business;

    • (b)

      you keep the separate business truly separate from any firm or in-house practice; and

    • (c)

      you ensure that people who obtain services from the separate business know it is not carrying on the practice of a lawyer regulated by the Solicitors Regulation Authority.

Professional indemnity – 15.26

  • 21.

    In relation to overseas practice, you are not bound by the Solicitors' Indemnity Insurance Rules but by 15.26, which requires that you must be covered by insurance if you are a principal or employee of a firm. The insurance must be reasonable, and it is not "reasonable" insurance to have none at all. The extent and amount of the insurance under 15.26 need not exceed the minimum requirements for practice from an office in England and Wales, but local law may apply more onerous requirements.

Accounts – 15.27

  • 22.

    In relation to overseas practice, you are not bound by the Solicitors' Accounts Rules 1998 but by 15.27, which imposes similar but more general provisions. If an applicable local rule conflicts with a provision of 15.27, you will still be expected to comply with any other provisions of 15.27 that do not conflict.

  • 23.

    Although the Solicitors' Accounts Rules 1998 do not apply, they may provide useful information about keeping accounts, the kind of checks an accountant might make, and the preparation of accountants' reports. Also, if your firm has offices in and outside England and Wales, a single accountant's report may be submitted covering your practice from offices both in, and outside, England and Wales.

  • 24.

    Subrules 15.27(3) to (5) will apply to you if:

    • (a)

      you have held or received client money or controlled trust money as a sole principal;

    • (b)

      you have held or received client money or controlled trust money as a named trustee;

    • (c)

      you are a partner in a partnership which has no separate legal identity and the partnership has held or received client money or controlled trust money, provided that:

      • (i)

        a majority of the partners are solicitors, bodies corporate controlled by solicitors or partnerships with separate legal identity controlled by solicitors; or

      • (ii)

        lawyers of England and Wales form the national group of lawyers with the largest share of control of the partnership, either as partners or by controlling partners;

    • (d)

      you are a partner in a partnership which has a separate legal identity and which has held or received client money or controlled trust money, provided that a controlling majority of the partners are solicitors, bodies corporate controlled by solicitors or partnerships with separate legal identity controlled by solicitors; or

    • (e)

      you are a director and/or owner of a body corporate which is not a recognised body and which has held or received client money or controlled trust money if a controlling majority of the owners of the firm are solicitors, bodies corporate controlled by solicitors or partnerships with separate legal identity controlled by solicitors.

    Subrules 15.27(3) to (5) will also apply in relation to practice in Scotland or Northern Ireland if solicitors and/or RELs make up the controlling majority referred to in note 24(c)(i) and note 24(d) and (e) above. In addition, 15.27(5) – the obligation to deliver an accountant's report – will apply to you if you are a director of a company, or a member of an LLP, which, as a recognised body, is itself required to deliver an accountant's report.

  • 25.

    The accounting requirements and the obligation to deliver an accountant's report in 15.27 are designed to apply to you in relation to money held or received by your firm unless it is primarily the practice of lawyers of other jurisdictions. The fact that they do not apply in certain cases is not intended to allow a lower standard of care in the handling of client money and controlled trust money – simply to prevent the Solicitors' Accounts Rules 1998 applying "by the back door" in a disproportionate or inappropriate way.

PDF (125K)

To link to this rule, please use www.sra.org.uk/rule15.

Send us your feedback on the Code.

Solicitors' Code of Conduct