12. Conflict concerning a solicitor's own interests
- A solicitor must not act for a client where there is a conflict between the duty to serve the best interests of client and the interests of the solicitor or an associate of the solicitor, except as permitted by this Rule.
- A solicitor must not exercise any undue influence intended to dispose the client to benefit the solicitor in excess of the solicitor’s fair remuneration for legal services provided to the client.
- A solicitor must not borrow any money, nor assist an associate to borrow money, from:
- a client of the solicitor or of the solicitor’s law practice; or
- a former client of the solicitor or of the solicitor’s law practice who has indicated a continuing reliance upon the advice of the solicitor or of the solicitor’s law practice in relation to the investment of money,
UNLESS the client is:- an Authorised Deposit-taking Institution;
- a trustee company;
- the responsible entity of a managed investment scheme registered under Chapter 5C of the Corporations Act 2001 (Cth) or a custodian for such a scheme;
- an associate of the solicitor and the solicitor is able to discharge the onus of proving that a full written disclosure was made to the client and that the client’s interests are protected in the circumstances, whether by legal representation or otherwise; or
- the employer of the solicitor.
- A solicitor will not have breached this Rule merely by:
- drawing a Will appointing the solicitor or an associate of the solicitor as executor, provided the solicitor informs the client in writing before the client signs the Will:
- of any entitlement of the solicitor, or the solicitor’s law practice or associate, to claim executor’s commission;
- of the inclusion in the Will of any provision entitling the solicitor, or the solicitor’s law practice or associate, to charge legal costs in relation to the administration of the estate; and
- if the solicitor or the solicitor’s law practice or associate has an entitlement to claim commission, that the client could appoint as executor a person who might make no claim for executor’s commission.
- drawing a Will or other instrument under which the solicitor (or the solicitor’s law practice or associate) will or may receive a substantial benefit other than any proper entitlement to executor’s commission and proper fees, provided the person instructing the solicitor is either:
- a member of the solicitor’s immediate family; or
- a solicitor, or a member of the immediate family of a solicitor, who is a partner, employer, or employee, of the solicitor.
- receiving a financial benefit from a third party in relation to any dealing where the solicitor represents a client, or from another service provider to whom a client has been referred by the solicitor, provided that the solicitor advises the client:
- that a commission or benefit is or may be payable to the solicitor in respect of the dealing or referral and the nature of that commission or benefit;
- that the client may refuse any referral, and
the client has given informed consent to the commission or benefit received or which may be received.
- acting for a client in any dealing in which a financial benefit may be payable to a third party for referring the client, provided that the solicitor has first disclosed the payment or financial benefit to the client.
- drawing a Will appointing the solicitor or an associate of the solicitor as executor, provided the solicitor informs the client in writing before the client signs the Will:
Guidance statements
It is important to be aware of your ethical obligations when being asked to provide a ‘second opinion’ by a client of another solicitor.
This Guidance Statement identifies the ethical and other issues to consider where a solicitor proposes to pay or give a financial benefit to a third party for the referral of a client to the solicitor. *Updated 18 July 2023
This Guidance Statement identifies the ethical and other issues to consider where a third party offers to pay a solicitor a financial benefit (be it commission, referral fee, benefit in kind or any form of financial or non- financial remuneration) for the referral of a client to a third party. *Updated 27 July 2023
This Guidance Statement outlines some of the issues solicitors should consider if they are asked to act for family or close friends.