SRA Handbook

Application, waivers and interpretation

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5th Section: Application, waivers and interpretation

Chapter 13: Application and waivers provisions

The SRA Code of Conduct applies to you in the following circumstances (and "you" must be construed accordingly):

Application of the SRA Code of Conduct in England and Wales

13.1

Subject to paragraphs 2 to 10 below and any other provisions in this Code, this Code applies to you, in relation to your activities carried out from an office in England and Wales, if you are:

(a)

a solicitor, REL or RFL, and you are practising as such, whether or not the entity through which you practise is subject to this Code;

(b)

a solicitor, REL or RFL who is:

(i)

a manager, employee or owner of a body which should be a recognised body, but has not been recognised by the SRA;

(ii)

a manager, employee or owner of a body that is a manager or owner of a body that should be a recognised body, but has not been recognised by the SRA;

(iii)

an employee of a sole practitioner who should be a recognised sole practitioner, but has not been recognised by the SRA;

(iv)

an owner of an authorised body or a body which should be a recognised body but has not been recognised by the SRA, even if you undertake no work for the body's clients; or

(v)

a manager or employee of an authorised non-SRA firm, or a manager of a body which is a manager of an authorised non-SRA firm, when doing work of a sort authorised by the SRA, for that firm;

(c)

an authorised body, or a body which should be a recognised body but has not been recognised by the SRA;

(d)

any other person who is a manager or employee of an authorised body, or of a body which should be a recognised body but has not been recognised by the SRA;

(e)

any other person who is an employee of a recognised sole practitioner, or of a sole practitioner who should be a recognised sole practitioner but has not been recognised by the SRA;

and "you" includes "your" as appropriate.

13.2

Chapters 10, 12, 13, 14 and 15 of the Code apply to you if you are a solicitor, REL or RFL and you are:

(a)

practising as a manager or employee of an authorised non-SRA firm when doing work of a sort authorised by the authorised non-SRA firm's approved regulator; or

(b)

an owner of an authorised non-SRA firm even if you undertake no work for the body's clients.

Application of the SRA Code of Conduct in relation to practice from an office outside England and Wales

13.3

Subject to 13.5 and 13.6 below, the Code applies to you, in relation to practice from an office in Scotland or Northern Ireland, if you are:

(a)

a solicitor or an REL practising as such, whether or not your firm or employer is subject to this Code;

(b)

a lawyer-controlled body;

(c)

an REL-controlled body;

(d)

any other person who is a manager of an authorised body; or

(e)

a solicitor who was formerly an REL, when practising as a lawyer of an Establishment Directive profession.

13.4

Subject to 13.5 and 13.6 below, the Code applies to you, in relation to practice from an office outside the UK, if you are:

(a)

a solicitor practising as such, whether or not your firm or employer is subject to this Code;

(b)

a lawyer-controlled body; or

(c)

any other person who is a manager of an authorised body.

13.5

If any outcome in the Code does not apply to your overseas practice, you may disregard that Outcome in relation to your overseas practice, but you must comply with any alternative provision substituted for overseas practice.

13.6

If compliance with any outcome in the Code would result in your breaching local law, you may disregard that outcome to the extent necessary to comply with that local law.

Application of the SRA Code of Conduct outside practice

13.7

In relation to activities which fall outside practice, whether undertaken as a lawyer or in some other business or private capacity, the following apply to you if you are a solicitor, or REL:

(a)

Outcome 11.1; and

(b)

Outcome 11.2.

General Provisions

13.8

The extent to which you are expected to implement the requirements of the Code will depend on your role in the firm, or your way of practising. For example, those who are managing the business will be expected to have more influence on how the firm or business is run than those practising in-house but not managing a legal department, or those practising as employees of a firm.

13.9

You must deliver all outcomes which are relevant to you and your situation.

13.10

Where in accordance with this chapter, the requirements of the Code apply to a licensed body, this extends to the reserved legal activities, and other activities regulated by the SRA, carried on by the body.

Waivers

In any particular case or cases the SRA Board shall have the power, in exceptional circumstances, to waive in writing the provisions of these outcomes for a particular purpose or purposes expressed in such waiver, to place conditions on and to revoke such a waiver.

Chapter 14: Interpretation

In this Code the words shown in italics have the meanings given below:

AJA

means the Administration of Justice Act 1985;

actively participate in

means, in relation to a separate business, having any active involvement in the separate business, and includes:

(i)

any direct control over the business, and any indirect control through another person such as a spouse; and

(ii)

any active participation in the business or the provision of its services to customers;

appointed representative

has the meaning given in FSMA;

approved regulator

means any body listed as an approved regulator in paragraph 1 of Schedule 4 to the LSA or designated as an approved regulator by an order under paragraph 17 of that Schedule;

arrangement

in relation to financial services, fee sharing and referrals, in chapters 1, 6 and 9 of the SRA Code of Conduct, means any express or tacit agreement between you and another person, whether contractually binding or not;

assets

includes money, documents, wills, deeds, investments and other property;

authorised body

means a body that has been authorised by the SRA, to practise as a licensed body or a recognised body;

authorised non-SRA firm

means a firm which is authorised to carry on legal activities by an approved regulator other than the SRA;

body corporate

means a company, an LLP, or a partnership which is a legal person in its own right;

claim for redress

has the meaning given in section 158 of the LSA;

client

means the person for whom you act and, where the context permits, includes prospective and former clients;

client account

has the meaning given in Rule 13.2 of the SRA Accounts Rules, save that for the purposes of Part 7 (Overseas Practice) of the SRA Accounts Rules, "client account" means an account at a bank or similar institution, subject to supervision by a public authority, which is used only for the purpose of holding client money and/or trust money, and the title or designation of which indicates that the funds in the account belong to the client or clients of a solicitor or REL or are held subject to a trust;

client conflict

for the purposes of Chapter 3 of the SRA Code of Conduct means any situation where you owe separate duties to act in the best interests of two or more clients in relation to the same or related matters, and those duties conflict, or there is a significant risk that those duties may conflict;

client money

has the meaning given in Rule 12 of the SRA Accounts Rules, save that for the purposes of Part 7 (Overseas Practice) of the SRA Accounts Rules, means money received or held for or on behalf of a client or trust (but excluding money which is held or received by a MDP - a licensed body providing a range of different services - in relation to those activities for which it is not regulated by the SRA);

COFA 

means compliance officer for finance and administration in accordance with rule 8.5 of the SRA Authorisation Rules and in relation to a licensable body is a reference to its Head of Finance and Administration within the meaning of the LSA;

COLP

means compliance officer for legal practice in accordance with rule 8.5 of the SRA Authorisation Rules and in relation to a licensable body is a reference to its Head of Legal Practice within the meaning of the LSA;

Companies Acts

means the Companies Act 1985 and the Companies Act 2006;

company

means a company registered under the Companies Acts, an overseas company incorporated in an Establishment Directive state and registered under the Companies Act 1985 and/or the Companies Act 2006 or a societas Europaea;

competing for the same objective

for the purposes of Chapter 3 of the SRA Code of Conduct means any situation in which two or more clients are competing for an "objective" which, if attained by one client will make that "objective" unattainable to the other client or clients and "objective" means, for the purposes of Chapter 3, an asset, contract or business opportunity which one or more clients are seeking to acquire or recover through a liquidation (or some other form of insolvency process) or by means of an auction or tender process or a bid or offer which is not public;

complaint

means an oral or written expression of dissatisfaction which alleges that the complainant has suffered (or may suffer) financial loss, distress, inconvenience or other detriment;

compulsory professional indemnity insurance

means the insurance you are required to have in place under the SIIR;

conflict of interests

means any situation where:

(i)

you owe separate duties to act in the best interests of two or more clients in relation to the same or related matters, and those duties conflict, or there is a significant risk that those duties may conflict (a "client conflict"); or

(ii)

your duty to act in the best interests of any client in relation to a matter conflicts, or there is a significant risk that it may conflict, with your own interests in relation to that or a related matter (an "own interest conflict");

connected with

means in relation to a separate business for the purpose of Chapter 12 of the SRA Code of Conduct:

(i)

having one or more partner(s), owner(s), director(s) or member(s) in common with the separate business;

(ii)

being a subsidiary company of the same holding company as the separate business; or

(iii)

being a subsidiary company of the separate business;

court

means any court, tribunal or enquiry of England and Wales, or a British court martial, or any court of another jurisdiction;

director

means a director of a company; and in relation to a societas Europaea includes:

(i)

in a two-tier system, a member of the management organ and a member of the supervisory organ; and

(ii)

in a one-tier system, a member of the administrative organ;

disbursement

means, in respect of those activities for which the practice is regulated by the SRA, any sum spent or to be spent on behalf of a client or trust (including any VAT element);

document

in Chapter 10 of the SRA Code of Conduct, includes documents, whether written or electronic, relating to the firm's client accounts and office accounts;

employee

includes an individual who is:

(i)

employed as a director of a company;

(ii)

engaged under a contract of service (for example, as an assistant solicitor) by a firm or its wholly owned service company; or

(iii)

engaged under a contract for services (for example, as a consultant or a locum), made between a firm or organisation and:

(A)

that individual;

(B)

an employment agency; or

(C)

a company which is not held out to the public as providing legal services and is wholly owned and directed by that individual,

under which the firm or organisation has exclusive control over the individual's time for all or part of the individual's working week; or in relation to which the firm or organisation has designated the individual as a fee earner in accordance with arrangements between the firm or organisation and the Legal Services Commission pursuant to the Access to Justice Act 1999;

and "employer" is to be construed accordingly;

Establishment Directive

means the Establishment of Lawyers Directive 98/5/EC;

Establishment Directive profession

means any profession listed in Article 1.2(a) of the Establishment Directive, including a solicitor, barrister or advocate of the UK;

Establishment Directive state

means a state to which the Establishment Directive applies;

fee sharer

means another person or business who or which shares your fees;

financial benefit

includes, for example, any commission, discount or rebate, but does not include your fees or interest earned on any client account;

firm

means an authorised body, a recognised sole practitioner or a body or person which should be authorised by the SRA as a recognised body or recognised sole practitioner (but which could not be authorised by another approved regulator);

general insurance contract

means any contract of insurance within Part I of Schedule 1 to the Regulated Activities Order;

holding company

has the meaning given in the Companies Act 2006;

immigration work

means the provision of immigration advice and immigration services, as defined in section 82 of the Immigration and Asylum Act 1999;

independent intermediary

in chapter 6 of the SRA Code of Conduct, means an independent financial adviser who is able to advise on investment products from across the whole of the market and offers consumers the option of paying fees rather than receiving payment through commission;

introducer

means any person, business or organisation who or that introduces or refers potential clients to your business, or recommends your business to clients or otherwise puts you and clients in touch with each other;

investment

for the purposes of chapter 6 of the SRA Code of Conduct, has the meaning given in the SRA Financial Services (Scope) Rules 2001;

in-house practice

means practice as a solicitor, REL or RFL (as appropriate) in accordance with Rules 1.1(c)(B), 1.1(d)(B), 1.1(e), 1.2(f), 2.1(c)(B), 2.1(d)(B), 2.1(e), 2.2(f), 3.1(b)(B) or 3.1(c)(B) of the SRA Practice Framework Rules;

lawyer

means a member of one of the following professions, entitled to practise as such:

(i)

the profession of solicitor, barrister or advocate of the UK;

(ii)

a profession whose members are authorised to carry on legal activities by an approved regulator other than the SRA;

(iii)

an Establishment Directive profession other than a UK profession;

(iv)

a legal profession which has been approved by the SRA for the purpose of recognised bodies in England and Wales; and

(v)

any other regulated legal profession specified by the SRA for the purpose of this definition;

lawyer-controlled body

means an authorised body in which lawyers of England and Wales constitute the national group of lawyers with the largest (or equal largest) share of control of the body either as individual managers or by their share in the control of bodies which are managers;

lawyer of England and Wales

means:

(i)

a solicitor; or

(ii)

an individual who is authorised to carry on legal activities in England and Wales by an approved regulator other than the SRA, but excludes a member of an Establishment Directive profession registered with the BSBunder the Establishment Directive;

Legal activity

has the meaning given in section 12 of the LSA and includes any reserved legal activity and any other activity which consists of the provision of legal advice or assistance, or representation in connection with the application of the law or resolution of legal disputes;

Legal Ombudsman

means the scheme administered by the Office for Legal Complaints under Part 6 of the LSA;

licensable body

means a body which meets the criteria in rule 14 (eligibility criteria for licensable bodies) of the SRA Practice Framework Rules;

licensed body

means a body licensed by the SRA under Part 5 of the LSA;

LLP

means a limited liability partnership incorporated under the Limited Liability Partnerships Act 2000;

LSA

means the Legal Services Act 2007;

manager

means:

(i)

a member of an LLP;

(ii)

a director of a company;

(iii)

a partner in a partnership; or

(iv)

in relation to any other body, a member of its governing body;

member

means:

(i)

in relation to a company, a person who has agreed to be a member of the company and whose name is entered in the company's register of members; and

(ii)

in relation to an LLP, a member of that LLP;

members of the public

for the purposes of Chapter 8 of the SRA Code of Conduct does not include:

(i)

a current or former client;

(ii)

another firm or its manager;

(iii)

an existing or potential professional or business connection; or

(iv)

a commercial organisation or public body;

office account

means an account of the firm for holding office money and/or out-of-scope money, or other means of holding office money or out-of-scope money (for example, the office cash box or an account holding money regulated by a regulator other than the SRA);

office money

has the meaning given in Rule 12 of theSRA Accounts Rules;

out-of-scope money

means money held or received by a MDP in relation to those activities for which it is not regulated by the SRA;

overseas practice

means practice from an office outside England and Wales, except in the case of an REL, where it means practice from an office in Scotland or Northern Ireland;

owner

for the purposes of Chapter 12 of the SRA Code of Conduct means a person having a substantial ownership interest in and "own" and "owned by" shall be construed accordingly;

own interest conflict

for the purpose of Chapter 3 of the SRA Code of Conduct, means any situation where your duty to act in the best interests of any client in relation to a matter conflicts, or there is a significant risk that it may conflict, with your own interests in relation to that or a related matter;

partner

means a person who is or is held out as a partner in a partnership;

partnership

means an unincorporated body in which persons are or are held out as partners and does not include a body incorporated as an LLP;

permitted separate business

means, for the purpose of Chapter 12 of the SRA Code of Conduct, a separate business offering any of the following services:

(i)

alternative dispute resolution;

(ii)

financial services;

(iii)

estate agency;

(iv)

management consultancy;

(v)

company secretarial services;

(vi)

acting as a parliamentary agent;

(vii)

practising as a lawyer of another jurisdiction;

(viii)

acting as a bailiff;

(ix)

acting as nominee, trustee or executor outside England and Wales;

(x)

acting as a nominee, trusteeor executor in England and Wales where such activity is provided as a subsidiary but necessary part of a separate business providing financial services;

(xi)

providing legal advice or drafting legal documents not included in (a) to (j) above, where such activity is provided as a subsidiary but necessary part of some other service which is one of the main services of the separate business; and

(xii)

providing any other business, advisory or agency service which could be provided through a firm or in-house practice but is not a prohibited separate business activity;

person

includes a body corporate, partnership and other unincorporated association or body of persons;

practice

means the activities, in that capacity, of:

(i)

a solicitor;

(ii)

an REL, from an office or offices within the UK;

(iii)

a member of an Establishment Directive profession registered with the BSB under the Establishment Directive, carried out from an office or offices in England and Wales;

(iv)

an RFL, from an office or offices in England and Wales as:

(A)

an employee of a recognised sole practitioner;

(B)

a manager, employee or owner of an authorised body or of an authorised non-SRA firm; or

(C)

a manager, employee or owner of a body which is a manager or owner of an authorised body or of an authorised non-SRA firm;

(v)

an authorised body;

(vi)

a manager of an authorised body;

(vii)

a person employed in England and Wales by an authorised body or recognised sole practitioner;

(viii)

a lawyer of England and Wales; or

(ix)

an authorised non-SRA firm;

and "practise" and "practising" should be construed accordingly;

practice from an office

includes practice carried on:

(i)

from an office at which you are based; or

(ii)

from an office of a firm in which you are the sole principal, or a manager, or in which you have an ownership interest, even if you are not based there;

and "practising from an office" should be construed accordingly;

Principles

means the Principles in the SRA Handbook;

prohibited separate business activities

means for the purpose of Chapter 12 of the SRA Code of Conduct:

(i)

the conduct of any matter which could come before a court, whether or not proceedings are started;

(ii)

advocacy before a court, tribunal or enquiry;

(iii)

instructing counsel in any part of the UK;

(iv)

immigration work;

(v)

any activity in relation to conveyancing, applications for probate or letters of administration, or drawing trust deeds or court documents, which is reserved to solicitors and others under the LSA;

(vi)

drafting wills;

(vii)

acting as nominee, trustee or executor in England and Wales, where such activity is not provided as a subsidiary but necessary part of a separate business providing financial services; and

(viii)

providing legal advice or drafting legal documents not included in (a) to (g) above where such activity is not provided as a subsidiary but necessary part of some other service which is one of the main services of the separate business;

publicity

includes all promotional material and activity, including the name or description of your firm, stationery, advertisements, brochures, websites, directory entries, media appearances, promotional press releases, and direct approaches to potential clients and other persons, whether conducted in person, in writing, or in electronic form, but does not include press releases prepared on behalf of a client;

pure protection contract

has the meaning given in rule 8.1 of the SRA Financial Services (Scope) Rules 2001;

recognised body

means a body recognised by the SRA under section 9 of the AJA;

recognised sole practitioner

means a solicitor or REL authorised by the SRA under section 1B of the Solicitors Act 1974 to practise as a sole practitioner;

referrals

includes any situation in which another person, business or organisation introduces or refers a client to your business, recommends your business to a client or otherwise puts you and a client in touch with each other;

REL

means registered European lawyer, namely, an individual registered with the SRA under regulation 17 of the European Communities (Lawyer's Practice) Regulations 2000 (SI 2000/1119);

REL-controlled body

means an authorised body in which RELs or RELs together with lawyers of England and Wales and/or European lawyers registered with the BSB, constitute the national group of lawyers with the largest (or equal largest) share of control of the body, either as individual managers or by their share in the control of bodies which are managers, and for this purpose RELs and European lawyers registered with the BSB belong to the national group of England and Wales;

Regulated Activities Order

means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;

regulated mortgage contract

has the meaning given by article 61(3) of the Regulated Activities Order;

reserved legal activity

has the meaning given in section 12 of the LSA, and includes the exercise of a right of audience, the conduct of litigation, reserved instrument activities, probate activities, notarial activities and the administration of oaths, as defined in Schedule 2 of the LSA;

RFL

means registered foreign lawyer, namely, an individual registered with the SRA under section 89 of the Courts and Legal Services Act 1990;

SA

means the Solicitors Act 1974;

separate business

means a business which is not an authorised body, a recognised sole practitioner, an authorised non-SRA firm or an in-house practice and includes businesses situated overseas;

societas Europaea

means a European public limited liability company within the meaning of article 1 of Council Regulation 2157/2001/EC;

Society

means the Law Society, in accordance with section 87 of the SA;

sole practitioner

means a solicitor or REL practising as a sole principal, and does not include a solicitor or REL practising in-house;

solicitor

means a person who has been admitted as a solicitor of the Senior Courts of England and Wales and whose name is on the roll kept by the Society under section 6 of the SA;

SRA

means the Solicitors Regulation Authority, and reference to the SRA as an approved regulator or licensing authority means the SRA carrying out regulatory functions assigned to the Society as an approved regulator or licensing authority;

SRA Authorisation Rules

means the SRA Authorisation Rules for Legal Services Bodies and Licensable Bodies 2011;

SRA Code of Conduct

means the SRA Code of Conduct 2011;

subsidiary company

has the meaning given in the Companies Act 2006;

substantial ownership interest

in a firm ("A") means:

(i)

owning at least 10% of the shares in A;

(ii)

owning at least 10% of the shares in a parent undertaking of A;

(iii)

being entitled to exercise, or control the exercise of, at least 10% of the voting rights in A; or

(iv)

being entitled to exercise, or control the exercise of, at least 10% of the voting rights of a parent undertaking of A;

and for the purpose of this definition, "parent undertaking" has the meaning given in the Companies Act 2006;

substantially common interest

for the purposes of Chapter 3 of the SRA Code of Conduct, means a situation where there is a clear common purpose in relation to any matter or a particular aspect of it between the clients and a strong consensus on how it is to be achieved and the client conflict is peripheral to this common purpose;

UK

means United Kingdom;

undertaking

means a statement, given orally or in writing, whether or not it includes the word "undertake" or "undertaking", made by or on behalf of you or your firm, in the course of practice, or by you outside the course of practice but as a solicitor or REL, to someone who reasonably places reliance on it, that you or your firm will do something or cause something to be done, or refrain from doing something;

voting rights

in relation to a body which does not have general meetings at which matters are decided by the exercise of voting rights, means the right under the constitution of the body to direct the overall policy of the body or alter the terms of its constitution.

Chapter 15: Transitional provisions

15.1

For the avoidance of doubt, where a breach of any provision of the Solicitors' Code of Conduct 2007 comes to the attention of the SRA after 6 October 2011, this shall be subject to action by the SRAnotwithstanding any repeal of the relevant provision.

15.2

From 31 March 2012, or the date on which an order made pursuant to section 69 of the LSA relating to the status of sole practitioners comes into force, whichever is the later, Chapter 13 shall have effect subject to the following amendment:

(a)

paragraphs 1(b)(iii) and 1(e) shall be omitted.

15.3

From 31 March 2012, or the date on which an order made pursuant to section 69 of the LSA relating to the status of sole practitioners comes into force, whichever is the later, Chapter 14 shall have effect subject to the following amendments:

(a)

in the definition of authorised body, the words, ", and include a sole practitioner authorised by the SRA" shall be inserted after "recognised body";

(b)

in the definition of manager the words "(ai) a sole practitioner;" shall be inserted before the words "(i) a member of an LLP;";

(c)

in the definition of practice, sub-paragraph (iv)(A) and, in sub-paragraph (vii) the words "or recognised sole practitioner" shall be omitted;

(d)

in the definition of separatebusiness, the words "recognised sole practitioner" shall be omitted;

(e)

the following shall be substituted for the definition of recognised body:

"means a legal services body recognised by the SRA under section 9 of the AJA, and includes a sole practitioner authorised by the SRA;";

(f)

the definition of recognised sole practitioner shall be omitted and the following definition inserted after the definition of "sole practitioner":

"sole practitioner authorised by the SRA" means a solicitor or RELauthorised by the SRAunder section 1B of the SA or section 9 of the AJAto practise as a sole practitioner;".

15.4

The SRA Code of Conduct shall not apply to licensed bodies until such time as the Society is designated as a licensing authority under Part 1 of Schedule 10 to the LSA and all definitions shall be construed accordingly.

15.5

References:

(a)

in the preamble, to:

(i)

the Code being made under section 83 of the Legal Services Act 2007, and

(ii)

licensed bodies and their managers and employees, and

(b)

in Chapter 10, to:

(i)

an application for a licence (O(10.2)),  and

(ii)

the role of COLP and COFA (O(10.12) and IB (10.8)),

shall have no effect until such time as the Society is designated as a licensing authority under Part 1 to Schedule 10 of the LSA.

15.6

In Chapter 8, the provision in IB(8.2) relating to multi-disciplinary practices, shall have no effect until such time as the Society is designated as a licensing authority under Part 1 of Schedule 10 to the LSA.