Solicitors' Code of Conduct 2007

Rule 16: European cross-border practice

 

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Rule 16 of the Code of Conduct was amended on 31 March 2009 as part of a general updating of the rules to introduce firm-based regulation and legal disciplinary practices as provided for in the Legal Services Act 2007. View rule 16 with 31 March 2009 changes highlighted

Introduction

The purpose of rule 16 is to apply the provisions of the CCBE Code to European cross-border practice. This is necessary to provide a system of mutual professional understanding for professional relations between lawyers of different CCBE states. Although the CCBE Code contains a large number of requirements, rule 16 contains only those requirements which are not replicated elsewhere in these rules.

Rule

16.01 Definition and application

Definition
  • (1)
    • (a)

      European cross-border practice is:

      • (i)

        any professional activity in a CCBE state other than the UK, whether or not you are physically present in that CCBE state; and

      • (ii)

        any professional contact with a lawyer of a CCBE state other than the UK.

  • (b)

    For the purposes of this rule professional contacts and professional activities taking place within a firm or in-house legal department are not European cross-border practice.

Application of this rule
  • (2)
    • (a)

      If you are a solicitor this rule applies to your European cross-border practice from an office in, or outside, England and Wales.

    • (b)

      If you are an REL this rule applies to your European cross-border practice from an office within the UK.

    • (c)

      If you are an RFL and you are a manager or employee of a recognised body or the employee of a recognised sole practitioner, this rule applies to your European cross-border practice from an office in England and Wales.

    • (d)

      This rule applies to a recognised body as follows:

      • (i)

        A solicitor-controlled recognised body is subject to the rule in relation to its European cross-border practice from any of its offices, wherever situated.

      • (ii)

        An REL-controlled recognised body is subject to the rule in relation to its European cross-border practice from any of its offices in the UK.

      • (iii)

        A recognised body which is not within (i) or (ii) is subject to the rule in relation to its European cross-border practice from any of its offices in England and Wales.

    • (e)

      If you are a manager of a recognised body and you are not a solicitor but you are a lawyer of England and Wales or a non-lawyer, this rule applies to you to the extent that the rule applies to the body itself under (d) above.

    • (f)

      If you are a manager of a recognised body and you are registered with the Bar Standards Board under the Establishment Directive, this rule applies to your European cross-border practice from an office of the recognised body in the UK to the extent that the rule applies to the body itself under (d) above.

16.02 Occupations considered incompatible with legal practice

  • (1)

    If you act in legal proceedings or proceedings before public authorities in a CCBE state other than the UK, you must, in that state, comply with any rules regarding occupations incompatible with the practice of law, as if you were a lawyer of that state, whether or not you are based at an office in that state.

  • (2)

    If you are a solicitor based at an office in a CCBE state other than the UK, you must respect any rules regarding participation in commercial or other activities not connected with the practice of law, as they are applied to lawyers of that state.

16.03 Fee sharing with non-lawyers

  • (1)

    You must not share your professional fees with a non-lawyer situated in a CCBE state other than the UK except:

    • (a)

      within a firm which is permitted under rule 12 (Framework of practice); or

    • (b)

      with a retired manager, member, owner or predecessor of the firm, or the dependants or personal representatives of a deceased manager, member, owner or predecessor.

  • (2)

    If you are practising from an office in a CCBE state other than the UK, whether or not you are actually present at that office, you must not share your professional fees from that practice with a non-lawyer, except:

    • (a)

      within a firm which is permitted under rule 12 (Framework of practice); or

    • (b)

      with a retired manager, member, owner or predecessor of the firm, or the dependants or personal representatives of a deceased manager, member, owner or predecessor.

16.04 Co-operation between lawyers of different CCBE states

  • (1)

    If you are approached by a lawyer of a CCBE state other than the UK to undertake work which you are not competent to undertake, you must assist that lawyer to obtain the information necessary to find and instruct a lawyer capable of providing the service asked for.

  • (2)

    When co-operating with a lawyer of a CCBE state other than the UK you must take into account the differences which may exist between your respective legal systems and the professional organisations, competencies and obligations of lawyers in your respective states.

16.05 Correspondence between lawyers in different CCBE states

  • (1)

    If you are practising from an office in a CCBE state and you want to send to a lawyer in a different CCBE state (with the exception of the UK) a communication which you wish to remain "confidential" or "without prejudice", you must, before sending the communication, clearly express your intention in order to avoid misunderstanding, and ask if the lawyer is able to accept the communication on that basis. When you send the communication you must express your intention clearly at the head of the communication or in a covering letter.

  • (2)

    If you are the intended recipient of a communication from a lawyer in another CCBE state which is stated to be "confidential" or "without prejudice", but which you are unable to accept on the basis intended by that lawyer, you must inform the sender accordingly without delay. If the communication has already been sent you must return it unread without revealing the contents to others. If you have already read the communication and you are under a professional duty to reveal it to your client you must inform the sender of this immediately.

16.06 Paying referral fees to non-lawyers

You must not pay a fee, commission or any other compensation to a non-lawyer as a consideration for referring a client to you:

    • (a)

      if the non-lawyer is situated in a CCBE state other than the UK; or

    • (b)

      if you are practising from an office in a CCBE state other than the UK, whether or not you are physically present at that office.

16.07 Disputes between lawyers in different member states

  • (1)

    If you consider that a lawyer in a CCBE state other than the UK has acted in breach of a rule of professional conduct you must draw the breach to the other lawyer's attention.

  • (2)

    Before commencing any form of proceedings against the other lawyer, you must inform the Law Society and the other lawyer's bar or law society in order to allow them an opportunity to assist in resolving the matter.

Guidance to rule 16 – European cross-border practice

  • 1.

    Since 1990 the CCBE Code, interpreted in the light of article 1 of the CCBE Code and the CCBE's Explanatory Memorandum, has been binding upon solicitors in relation to their European cross-border practice. The current version of the CCBE Code applies in relation to all the CCBE states and their legal professions, which are as follows.

    Albania avukat
    Armenia pastaban
    Austria Rechtsanwalt
    Belgium avocat / advocaat / Rechtsanwalt
    Bulgaria advokat
    Croatia odvjetnik
    Cyprus dikegóros
    Czech Republic advokát
    Denmark advokat
    Estonia vandeadvokaat
    Finland asianajaja / advokat
    FYRO Macedonia advokat
    France avocat
    Georgia advokati
    Germany Rechtsanwalt
    Greece dikegóros
    Hungary ügyvéd
    Iceland lögmaður
    Ireland solicitor; barrister
    Italy avvocato
    Latvia zvērināts advokāts
    Liechtenstein Rechtsanwalt
    Lithuania advokatas
    Luxembourg avocat / Rechtsanwalt
    Malta avukat; prokuratur legali
    Moldova avocat
    Montenegro advokat
    Netherlands advocaat
    Norway advokat
    Poland adwokat; radca prawny
    Portugal advogado
    Romania avocat
    Serbia advokat
    Slovakia advokát / advokátka
    Slovenia odvetnik / odvetnica
    Spain abogado / advocat / abokatu / avogado
    Sweden advokat
    Switzerland Rechtsanwalt / Anwalt / Fürsprecher / Fürsprech / avocat / avvocato / advokat
    Turkey avukat
    Ukraine advokat
    United Kingdom solicitor; barrister / advocate
  • 2.

    If you comply with these rules in relation to your practice generally, and with rule 16 in relation to European cross-border practice, you will also comply with the requirements of the CCBE Code, as interpreted in the light of article 1 of the CCBE Code and the CCBE's Explanatory Memorandum.

Incompatible occupations – 16.02

  • 3.

    Rule 16.02(1) prohibits you from pursuing any occupation prohibited to local lawyers as incompatible with the practice of law, in another CCBE state in which you act in legal proceedings or proceedings before a public authority. This does not prevent you from pursuing such an occupation in the UK if it is permitted under these rules, or in another CCBE state where it is allowed.

  • 4.

    Rule 16.02(2) requires you to "respect" the rules regarding incompatible occupations in a CCBE state where you are established. If you are registered under the Establishment Directive any such local rule will apply to you directly. If you are established in a CCBE state, but you are not subject to the Establishment Directive, you may not be subject to the host state rule but rule 16 will apply. "Respect" for a rule is not the same as an obligation to comply with that rule, but the SRA Board would expect you to comply with the spirit of such a rule where it is not unreasonable to do so.

Fee sharing – 16.03

  • 5.

    Rule 16.03 permits fee sharing in European cross-border practice within a law firm, and between law firms. Fee sharing is permitted, for instance, with an overseas practice which includes non-lawyers, provided a controlling majority of the owners and managers are lawyers.

  • 6.

    Although 8.02 (Fee sharing with other non-lawyers) allows you to share fees with a non-lawyer "fee sharer" in some circumstances, this is prohibited by 16.03 in respect of European cross-border practice.

  • 7.

    Interpreting how this prohibition applies to a firm sharing fees with a non-lawyer fee sharer operating in more than one state, and how it applies to a firm practising in more than one state, may be complex. For example:

    • (a)

      rule 16.03 would prohibit your firm, wherever it is practising, from sharing fees with a non-lawyer company whose principal place of business is in a CCBE state other than the UK, or with a non-lawyer company's branch establishment in a CCBE state other than the UK; and

    • (b)

      if your firm has its main office in the UK and a branch office in another CCBE state, the fees of the branch office cannot be shared with a non-lawyer company wherever situated, so the firm cannot share a percentage of its fees as a whole with a non-lawyer company. However, the firm could share a percentage of the fees of its UK office, and of any office in a state which is not a CCBE state, with a non-lawyer company, provided:

      • (i)

        the non-lawyer company is situated in the UK or in a state which is not a CCBE state; and

      • (ii)

        the requirements of 8.02 are met.

Correspondence between lawyers in different CCBE states – 16.05

  • 8.

    Rule 16.05 reflects the requirements of article 5.3 of the CCBE Code. Differences between the ways in which client business is conducted in different states can give rise to misunderstandings between lawyers, and this provision is designed to help avoid such misunderstandings. Terms such as "confidential" and "without prejudice" are not of universal application.

    • (a)

      "Confidential"

      In some states 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 states such communications must be marked "confidential" before they are to be regarded in this way.

      On the other hand, in some states, including the UK, 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.

    • (b)

      "Without prejudice"

      In some states, 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 important national differences give rise to many misunderstandings, so you need to be careful in conducting cross-border correspondence.

  • 9.

    Where 16.05 applies, you must ask in advance whether your communication can be accepted on the basis you intend, and you must express your intention clearly at the head of your communication or in a covering letter.

  • 10.

    If 16.05 applies and you are informed that a communication is to be sent to you on a basis which you are not able to respect – for example, that it must not be disclosed to your client – you must inform the other lawyer immediately so that the communication is not sent. If it has already been sent you must return it to the sender unread and without revealing its contents or referring to it in any way. It can happen that, as a result of misunderstanding between sender and recipient, the recipient has already read the communication. If this happens to you, you may be under a professional duty to reveal the contents to your client, either under these rules or under rules of an Establishment Directive state in which you are registered. If so you must tell the sender immediately.

Referral fees – 16.06

  • 11.

    Rule 16.06 permits, in European cross-border practice, the payment of a referral fee or commission to another law firm. It is permitted, for instance, to pay a referral fee to an overseas practice which includes non-lawyers, provided a controlling majority of the owners and managers are lawyers.

  • 12.

    Rule 9 (Referrals of business), which refers to practice from an office in England and Wales, allows you to have an arrangement with a non-lawyer for the referral of clients, and, subject to disclosure, to pay the introducer. However, such payments are prohibited by 16.06 in respect of European cross-border practice whether from an office in England and Wales or from an overseas office.

  • 13.

    As with the prohibition on fee sharing with a non-lawyer, there are complexities involved in interpreting how the prohibition applies to a firm practising in more than one state, and to an arrangement with a non-lawyer introducer operating in more than one state. For example:


    • (a)

      if your firm has its main office in the UK and a branch office in another CCBE state, the branch office cannot pay a referral fee to a non-lawyer company wherever situated, but the UK office, and any office in a state which is not a CCBE state, could do so provided that:

      • (i)

        the non-lawyer company is situated in the UK or in a state which is not a CCBE state; and

      • (ii)

        in respect of payments from an office in England and Wales the requirements of rule 9 are met, or in respect of payments from an overseas office the requirements of 15.09(2) are met; and

    • (b)

      rule 16.06 would prohibit your firm, wherever it is practising, from paying a referral fee to a non-lawyer company whose principal place of business is in a CCBE state other than the UK, or to a non-lawyer company's branch establishment in a CCBE state other than the UK.

Disputes between lawyers in different CCBE states – 16.07

  • 14.

    If a professional dispute arises between you and a lawyer in a CCBE state other than the UK, it is desirable that the dispute be settled in a friendly way, and this is the purpose of the requirements of 16.07. Under 16.07(2) you will need to contact the Law Society's International Unit.


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