Thursday, January 31, 2013

As if COLPS did not have enough to worry about ...

…professors David Kershaw of LSE and Richard Moorhead of UCL have argued that transactional lawyers should be held accountable if their advice is used by clients for unlawful acts and strict conduct rules are necessary to police this rather than outcomes-focused regulation.

Legal Futures reported today that the well respected academics urged that lawyers should bear responsibility where a “real, substantial and foreseeable risk” of unlawful – or even probably unlawful – action exists, even when such advice is accurate and competently provided. Any such change would necessitate amendments to the SRA Handbook. By way of example law firms who gave advice on Stamp Duty Mitigation Schemes would be caught.

Kershaw and Moorhead concluded: “More specific rules and guidance on a lawyer’s consequential responsibility would clarify the limits of proactive lawyering. Whilst in the absence of effective enforcement by the SRA such rules would be as ineffective as the current broad principles, they would provide a clearer benchmark according to which lawyers can internalise what is expected of them and around which the SRA can build an enforcement policy that provides some counterweight to the economics of zeal”.

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