Client care
The new Rules of Conduct and Client Care for Lawyers came into effect on 1 August 2008. The new Rules differ in many aspects from the previous Rules of Professional Conduct for Barristers and Solicitors. They are based to a large extent on the four fundamental obligations of lawyers set out in s4 of the LCA.
Every lawyer who provides regulated services must, on the course of his or her practice, comply with the following fundamental obligations:
- to uphold the rule of law and to facilitate the administration of justice in New Zealand
- to be independent in providing regulated services to his or her clients
- to act in accordance with all fiduciary duties and duties of care owed by lawyers to their clients
- to protect, subject to his or her overriding duties as an officer of the High Court and to his or her duties under any enactment, the interest of his or her clients.
Client care requirements
An important new area under these Rules are the requirements for client care. Whatever legal services you are providing as a lawyer, you must:
- act competently, in a timely way, and in accordance with any arrangements made
- protect and promote your clients interests and act for them free from compromising influences or loyalties
- discuss with your client their objectives and how they should best be achieved
- provide your client with information about the work to be done, who will do it and the way the services will be provided.
- charge your client a fee that is fair and reasonable and let them know when they will be billed
- give your client clear information and advice
- protect your client's privacy and ensure appropriate confidentiality
- treat your client fairly, respectfully and without discrimination
- keep your client informed about the work being done and advise you when it is completed
- let your client know how to make a complaint and deal with any complaint promptly and fairly.
Documentation to assist lawyers comply with the Rules of Conduct and Client Care for Lawyers is provided in three Word documents, available for download using the links below:
The Information for Clients form contains the information that the Rules of Conduct and Client Care for Lawyers state must be provided to clients at the outset of an engagement. This form should not be amended except to the extent indicated on the form.
The Standard Terms of Engagement form is a sample only.
Once a law practice has settled its Terms of Engagement form and completed the Information for Clients form, all variables relating to a particular retainer can then normally be set out in the letter of engagement.
It is recommended that each law practice ensure that the above material is given to each new client at the commencement of a retainer. It is also necessary to give all existing clients, at the least, the Information for Clients form, together with the information as to fees and the persons responsible for the work.
Indemnity disclosures - options and minimum requirements
Law practices will shortly need to prepare memoranda setting out information for clients required under Rules 3.5 and 3.6 of the Rules of Conduct and Client Care.
As far as indemnity arrangements are concerned, the information (required by Rule 3.5(b)) must do one of the following:
- disclose the actual insurance arrangements (name of insurer, indemnity limit, whether the indemnity limit applies to each claim, and the excess payable); or
- disclose that the practice holds indemnity insurance that meets or exceeds any minimum standards from time to time specified by the Law Society; or
- disclose the fact that there is no cover.
The NZLS Board, at its meeting on 17 July, adopted the following:
(a) The indemnity limit is the greater of $1 million per practice or $0.75 million for each partner (or in the case of an incorporated law firm, for each lawyer shareholder) within the practice.
(b) The indemnity limit applies either:
(i) on an aggregated basis to claims made in the policy period with not less than one automatic reinstatement, or
(ii) on any one claim basis with no aggregate limit.
(c) The excess payable does not exceed 1% of the indemnity limit.
Lawyers will also need to keep in mind Rule 4(2) of the new Lawyers Indemnity Rules, which requires lawyers who are partners or directors of a practice to give consideration to the practice holding appropriate professional indemnity insurance and sets out some factors which need to be taken into account in that process.
For further information, please email alan.ritchie@lawsociety.org.nz