How to deal with unrepresented parties

Disciplinary cases arising from conduct breaches in dealing with unrepresented parties are not new, though they have attracted renewed attention from the publicity surrounding strategic lawsuits against public participation (SLAPPs). Unrepresented parties present challenges, whether in litigation or non-contentious business.

While many regulatory provisions may potentially be engaged, of most relevance, the Solicitors Regulation Authority Principles (SRA Principles) require that you act –

2. in a way that upholds public trust and confidence in the solicitors’ profession and in legal services provided by authorised persons.

…

5. with integrity.

Paragraph 1.2 of the SRA Code of Conduct for Solicitors, RELs, RFLs and RSLs (the SRA Code of Conduct) requires that you do not abuse your position by taking unfair advantage of clients or others.

Some of the cases cited below involve decisions on similar provisions in previous rules and codes.

Litigation

The solicitor in SRA v Hensman allowed his personal injury client’s legal expenses insurer, for whom the firm did not act, to be misled. Partway through the claim, his client admitted that his account of his accident was dishonest. The solicitor allowed a junior colleague under his supervision to conceal this information from the insurer in order to protect the insurance coverage, and sought to facilitate a settlement of the claim. The client’s dishonesty meant that the solicitor-client confidentiality did not apply and the solicitor could therefore have told the insurer the true position.

The solicitor was found to have breached the Solicitors’ Practice Rules 1990 by having ‘acted in circumstances which were contrary to the good repute of both himself and of the solicitors’ profession and compromised or impaired his integrity and his proper standard of work’, and having failed to exercise appropriate supervision over an employee.

It is of note that the solicitor said that his email instruction to his junior colleague was ‘written in some haste whilst out of the office’.

In the case of SRA v Crossley, the solicitor was suspended for two years by the Solicitors Disciplinary Tribunal (SDT) for his firm’s aggressive tactics in pursuing alleged copyright infringers. His firm sent over 20,000 threatening letters to individuals, many of whom were unrepresented, demanding settlements for alleged illegal file-sharing. He was also disciplined (and the firm fined by the Information Commissioner’s Office) for a data breach following a distributed denial of service (DDOS) attack.

In SRA v Woolf, the solicitor tried to trick an 82-year-old farmer out of his protected agricultural tenancy by disguising the service of two almost identical but different notices (which constitutes sharp practice) to hide the fact that he was serving notice to quit, one letter going by ordinary post, the other by special delivery. He was suspended for 12 months. The matter was prosecuted as a breach of Principles 2 and 5 of the SRA Principles 2019 (public trust and integrity, which were admitted), and dishonesty which was not proved.

In the case of Rahim, the SRA concluded a regulatory settlement agreement under which the solicitor accepted a rebuke and agreed to pay costs of £1,350. The solicitor was acting for his client in litigation and obtained an order against an unrepresented defendant for payment of damages and costs.

Despite knowing that his client’s opponent had now instructed solicitors, Mr Rahim sent an email directly to the defendant, stating that the defendant had committed perjury and that if he failed to pay the damages to his client, he would inform the court of the perjury which could result in the defendant facing up to seven years’ imprisonment.

Mr Rahim admitted a breach of Principle 2 of the SRA Principles 2019 (public trust) as he failed to act in a way that upholds public trust and confidence in the solicitors’ profession and in legal services provided by authorised person.

The current SRA Code of Conduct contains no express prohibition on communicating directly with a party who was represented by a solicitor, there was such provision in previous Codes.

More recently, there has been much press interest in the case of SRA v Hurst, its profile being raised by the involvement of then Chancellor of the Exchequer, Rt. Hon. Nadhim Zahawi MP, and SLAPP issues, though the SDT determined that it was not in fact a SLAPP. The solicitor was held to have breached Principles 2 (public trust) and 5 (integrity) of the SRA Principles 2019 and paragraph 1.2 of the SRA Code of Conduct (taking unfair advantage) by sending an email to tax expert and former Clifford Chance partner Dan Neidle that improperly sought to restrict Mr Neidle’s right to publish or discuss its contents, contrary to the SRA Code of Conduct and the SRA Principles of integrity and upholding public trust.

The SDT found that Hurst’s use of “without prejudice” and confidentiality labels, combined with threats of serious consequences for disclosure, was a deliberate attempt to suppress information of public interest and was not standard or justified practice. While Mr Neidle was himself a solicitor, his expertise was in tax, not defamation and media law. The SDT also found a breach of paragraph 1.4 of the SRA Code of Conduct which prohibits misleading clients and others.

Non-contentious issues

The case of SRA v Bujakowski demonstrates dangers in non-contentious work. Here, the solicitor acted on property schemes and allowed contractual documents to be issued to buyers, including unrepresented buyers, which were inconsistent with marketing materials and misleading as to the security of the investment, expected returns and asset value. The case was brought under the SRA Code of Conduct 2011, and the then-applicable SRA Principles, differently numbered but substantially the same, Principles 2 (integrity) and 6 (public trust).

Managing risks

Emails written in haste may attract greater risk, as demonstrated by the Hensman case. In the Hurst case, the SDT noted that Mr Hurst was working under intense pressure, out of the office, on a Saturday evening with the imminent threat of the Sunday papers publication deadline looming, having had to juggle client communications during a family day out.

The increased dangers of working out of the office and/or out of hours while dealing with unrepresented third parties should be borne in mind; thought should be given to addressing this risk, if only by waiting an hour between drafting an email and sending it, or ideally by peer review.

In 2015, The Law Society, the Bar Council and CILEx jointly published Litigants in person: guidelines for lawyers, discussing the relationship between the client’s interest and the interests of the administration of justice.

SRA publications include Balancing duties in litigation, Conduct in disputes, Conduct in disputes thematic review, and a Warning Notice, Strategic Lawsuits against Public Participation (SLAPPs).

Annual ethics training can provide a resetting of the ethical compass and mitigate the risk of straying over the line.

File review may also help, albeit that can only cover a sample of files. Files could be recorded centrally (primarily through the file-opening process) if there is a litigant in person or other unrepresented party.

While supervision may not have been in issue in the cases referred to above, which involved partners, it may still be critical in protecting against breaches by more junior staff.

Insurance under the SRA Minimum Terms and Conditions (MTC) does not extend to the costs of defending disciplinary investigations. Firms should consider obtaining management liability insurance if they do not already have it.

However, note that cover under such policies is not as all-encompassing as the MTC, and the wording should be considered carefully. There are traps for the unwary, around when cover is triggered, whether it is excluded (as professional services) and the limits of indemnity, as costs of defending an SRA investigation and proceedings can be high: in the Hurst case, the SRA’s costs, which the respondent was ordered to pay, were £260,000 (reduced from the £298,390.80 claimed) and defence costs were £908,171.75; costs in other high-profile cases have been reported as running into the millions.

If you have questions or concerns about professional regulation or professional indemnity insurance law, please contact Frank Maher.