No.29 Applying the 'no contact rule’ when the other party is an organisation

1. Introduction

1.1. Who should read this Guidance Statement?

This Guidance Statement is for solicitors and law practices.

1.2. What are the issues?

The ‘no contact rule’ provides that a solicitor may only deal directly with the client of another solicitor in exceptional circumstances. 

However, where the client of the other solicitor is an organisation instead of an individual, and especially a large and complex organisation, the application of the ‘no contact rule’ can give rise to particular challenges. This Guidance Statement seeks to clarify the application of the rule in these situations.

1.3. Status of this Guidance Statement

This Guidance Statement is issued by the Queensland Law Society (‘QLS’) Ethics and Practice Centre for the use and benefit of solicitors.

This Guidance Statement does not have any legislative or statutory effect. By having regard to the content of the Guidance Statement it may be easier for you to account for your actions if a complaint is later made to the Legal Services Commission.

This Guidance Statement is not legal advice, nor will it necessarily provide a defence to complaints of unsatisfactory professional conduct or professional misconduct.

This Guidance Statement represents a standard of good practice and is endorsed by the Ethics Committee of the QLS.

2. Ethical principles

ASCR  

Rule 33.1 provides:

33. Communication with another solicitor’s client

33.1   A solicitor must not deal directly with the client or clients of another practitioner unless:

         33.1.1   the other practitioner has previously consented;

              33.1.2   the solicitor believes on reasonable grounds that:

(i)    the circumstances are so urgent as to require the solicitor to do so; and

(ii)   the dealing would not be unfair to the opponent’s client;

33.1.3   the substance of the dealing is solely to enquire whether the other party or parties to a matter are represented and, if so, by whom; or

33.1.4   there is notice of the solicitor’s intention to communicate with the other party or parties, but the other practitioner has failed, after a reasonable time, to reply and there is reasonable basis for proceeding with contact.

Rule 33, also referred to as the ‘no contact rule’, reflects the common law. 

Rule 22.4 may also be relevant where the organisation is indemnified by an insurer. That rule states:

22. Communication with opponents

 22.4   A solicitor must not confer or deal with any party represented by or to the knowledge of the solicitor indemnified by an insurer, unless the party and the insurer have signified willingness to that course.

2.1. Discussion

Rule 33 applies where there is:

• another party in a matter (the ‘opposing’ party or client);¹
• that party, or another party or witness in the matter, is represented by a solicitor in relation to the matter;
• there is the risk of a solicitor ‘dealing’ directly with the other party on behalf of the solicitor’s client in the absence, or without the permission, of the other party’s solicitor.

A solicitor may not communicate with the other party directly in these circumstances, other than where one of the exceptions in Rule 33 applies.

Rule 33 protects the opposing party,² as a legal practitioner who directly contacts an opposing party might ‘secure damaging admissions, or access to privileged material, or undermine the opponent’s trust in that person’s lawyer’.³ However, adherence to this Rule may also be of benefit to the solicitor’s own client as ensuring the other party is represented can guard against future claims such as those related to undue influence or unconscionability.

Applying the ‘no contact’ rule where the opposing party is an organisation rather than individual, and especially a large and complex organisation, can present challenges, particularly where a solicitor may have other legitimate reasons to interact with the organisation or its personnel. It may also present challenges for in-house counsel.

Organisations, as legal entities, must of necessity act though the agency of natural persons, such as their directors, employees or contractors.⁴ Guidance from other jurisdictions is to the effect that it is the authorised representative or decision-makers with respect to a given matter, as well as its directors or senior executives,⁵ that should be regarded as representing the other party for the purpose of the ‘no-contact’ rule and it is therefore to dealings with those individuals to which the Rule applies.

2.2. Is the organisation represented in the matter? 

Organisations will often use non-lawyers to represent them in a range of matters without legal assistance or will only use lawyers to advise them at certain stages of a matter. In a large organisation this is common for certain commercial negotiations or for the management of some claims.

The fact that an organisation has an in-house legal team, is of a size where it might be expected to have in-house counsel or is known to be represented by a lawyer (internal or external) in another matter, does not mean that the solicitor seeking to interact with the organisation needs to proceed as if the organisation is represented by a lawyer in the matter at hand. 

2.2.1. Where the organisation is not represented in the matter

Where no lawyer appears to be involved, enquiries should be made with an organisation’s authorised representative at the start of any discussions. If the authorised representative makes it clear that the organisation has no representation in the matter, and there is no reason to believe that this may not be correct, the solicitor may proceed and is not required to attempt to ascertain if there is an in-house team or to make independent enquiries of that team or previous external lawyers. Attempting to do so, which may be difficult or impractical, could also be against the client’s interests or involve the improper disclosure of confidential information. 

Care should nonetheless be taken when dealing directly with the authorised representative of an organisation in a matter who is not a lawyer. Proper file notes should be kept and the situation monitored carefully. If at a later stage it appears that a legal representative has been assigned to or retained in the matter, the solicitor should immediately cease direct contact with the authorised representative except as permitted by the Rule. 

In the case of larger organisations that use non-lawyers for matters such as claims management and have published procedures in this regard, the solicitor must nonetheless be guided at all times by the organisation’s legal representatives, should they become involved in the matter, and Rule 33 will apply from that point. 

2.2.2. Organisation’s whose lawyers have a limited role

Where the opposing party is clearly engaging lawyers at certain stages of a matter only, care should be taken to clarify the opposing counsel’s role, directly with that counsel if they are known and it is otherwise practical and appropriate to do so. Similar caution should be exercised where the involvement by the opposing party’s in-house counsel in a matter appears limited to only certain stages or meetings.  

2.2.3. Perception that solicitor is representing both parties to be avoided

In the case of smaller organisations, solicitors may need to guard against perceptions that they may be acting for both parties and should be alert for signs of this.

2.2.4. Meetings

Where you have been notified by another solicitor that they are acting for the other party, you must not attend a meeting with the other party – on any topic – without that solicitor being present unless the other solicitor (not their client or yours) gives permission. It is not permissible to stay but not speak, to ‘listen in’ remotely, or to limit your remarks to matters you deem to be of lesser importance.

If the other party does not bring their solicitor, you must leave the meeting and contact the other solicitor as soon as possible. 

If you will be late, you should let the other solicitor know. For physical meetings, you should step out until the other solicitor arrives, unless the other solicitor has given permission for you to remain. For electronic meetings, leaving the meeting or going on ‘mute’ is advised, although being present in an electronic meeting for a few minutes at the start without the other party’s solicitor, while all parties dial in, is generally not of concern, provided the matter is not discussed – a sensible and reasonable approach consistent with the rule and professional courtesy being required in such situations.

2.3. Witnesses

Approaching a witness who is an employee of an organisation that is an ‘opposing party’ is permissible where the person is not represented by a lawyer and they are not an authorised representative, decision-maker for the matter, director or senior executive, as there is no property in a witness.⁶ 

However, contact with an authorised representative, a decision-maker for the matter or a director or senior executive, should, as agents of the organisation, only occur through the organisation’s lawyer. This does not apply to other witnesses who may be employees. 

Former employees who have previously been authorised representatives or decision-makers for the matter, or a director or senior executive, should be approached with caution as they may be in possession of privileged information which it would not be appropriate for the solicitor to seek to obtain.

2.4. When Rule 33 does not apply

While the ‘no contact rule’ applies to organisations which are represented, it does not prevent all contact by the solicitor with the organisation or its other employees or representatives for any purpose.

2.4.1. Minor or unrelated dealings

Necessary interactions with the other party’s personnel, other than the authorised representative or decision-makers for the matter, for example while arranging or attending meetings, are permissible (so long as those interactions are not exploited to gather information relevant to the matter). 

Similarly, if it is a very large organisation, such as a supermarket, telecommunications provider or bank, the solicitor or their firm may themselves be customers and such contact will not breach Rule 33, and is permitted, provided that there is no conflict which would otherwise prevent such dealings.

2.4.2. No 'opposing party' 

It is also important to remember in this context that not all forms of the work undertaken by a solicitor involve ‘dealing’ with an ‘opposing’ party, or another party involved in such a matter, for or on behalf of a client. For example, a conference with an expert or other witness or a routine interaction with registry staff or a government department, would not fall into this category. 

There are also activities regularly performed by solicitors which may not be ‘legal work’ at all (such where a solicitor is a board member or member of a community group,⁷ an industry body or a delegation to government), but which will involve dealings or negotiations with a wide range of parties, some of whom may be represented. Solicitors should take care that their role in such situations is clear.

Other types of legal work commonly engaged in by solicitors may also entail sufficient independence such that there could not properly be said to be an ‘opposing’ party. This may include some types of alternative dispute resolution and collaborative practice, as well as probity or process auditing or monitoring, where otherwise consistent with those roles and any applicable procedures.

2.4.3. Bodies corporate 

Confusion about the application of the rule can sometimes arise in the context of bodies corporate under the Body Corporate and Community Management Act 1997 (Qld), especially those with a great number of lots, where one solicitor may be acting for the body corporate itself and others are acting for lot owners. 

A solicitor acting for a body corporate, usually instructed by the committee (or other person or entity performing that role), will not be regarded as acting for the individual lot owners, in the same way that a solicitor acting for a company does not act for its shareholders. 

However, there will be situations where a solicitor acting for a body corporate may need to communicate with the lot owners on the body corporate’s behalf, for example, about a claim by a third party. There may also be situations where a solicitor for one or more lot owners may similarly need to write to the other lot owners, for example, about a matter to be voted on at a general meeting. 

If a communication is addressed to all lot owners there would be no need to enquire first whether each lot holder is represented. It is also arguable that the body corporate and lot owners would not be ‘opposing parties’ in those situations.

If a communication is between the body corporate and a specific lot owner, or between lot holders, about a claim or a dispute between those parties, and the solicitor has previously been put on notice that the other party is represented, then correspondence about that matter should of course be addressed to the relevant solicitor only. Correspondence to all lot owners about other matters may still be directed to the lot holder directly, unless or until it becomes clear that a lot owner is being represented in relation to that matter as well.

Lot owners, who instruct a solicitor on behalf of the body corporate in their capacity as committee members, should not be regarded as being represented by that solicitor in their capacity as lot owners and correspondence addressed to them in the latter capacity should be treated in the same way as that to any other lot holder.            

3. More Information

Solicitors are referred to:

• The Queensland Law Society, The Australian Solicitors Conduct Rules 2012 in Practice: A Commentary for Australian Legal Practitioners, Queensland Law Society (2014).

• Guidance Statement No. 28 – Applying the ‘no contact rule’ when the other party is an individual (13 October 2021).

Solicitors working with clients that are organisations may also wish to provide a copy of ‘INFORMATION GUIDE FOR NON-LAWYERS: The ‘no contact’ rule.’ (Annexure A).

For further assistance please contact an Ethics Solicitor in the QLS Ethics and Practice Centre on 07 3842 5843 or ethics@qls.com.au .

1 G E Dal Pont, Lawyers’ Professional Responsibility (Law Book, 7th ed, 2020) [21.240] citing Jones v Jones (1847) 5 Notes of Cases in the Ecclesiastical and Maritime Courts 134, 140; See also Day v Woolworths Limited [2018] QSC 82, [5]; Law Institute of Victoria, Communicating with another Practitioner’s Client Guidelines (20 December 2012), 1.

2 Dal Pont (n 1) [21.240].