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Trainees – sacking?

As firms lay off staff, some are wondering whether or not they can get rid of their trainees. The answer will generally be no, and there are two points to remember:

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Client account – bills

Rule 22(3)(b) says that office money may only be withdrawn from a client account when it is properly required for payment of costs under Rule 19(2)(3). But, 19(2) says that a solicitor who requires payment of fees from money held in a client account must first give or send a bill of costs, or other written notification of the costs incurred, to the client or the paying party.

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Professional – update

Beware unilaterally rejecting applications for training contracts from non-EU students (ie students who would need a work permit). The EAT recently upheld a finding of indirect race discrimination (on the grounds of nationality) against Osborne Clarke because of this.

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TTs – correct practice

Many solicitors arranging TTs will charge a sum that is a composite figure comprising the charge made by the bank (eg £20), plus an additional £10, making a total charge to the client of £30 plus VAT.

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Solicitor – bankruptcy

Bankruptcy automatically suspends a solicitor’s practising certificate. In the case of a sole practitioner it will therefore mean the closure of the firm (eg by intervention).

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Proceeds of Crime – failure to disclose

The offence of ‘failing to disclose’ arises when someone (eg a solicitor) knows, or suspects (or has reasonable grounds for knowing or suspecting) that someone else is engaged in ‘money laundering’. This is, of course, s330 PoCA 2002, and there are four defences available (reasonable excuse; privileged circumstances; lack of specified training; money laundering occurred outside UK).

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Professisonal – update

The arrival of Legal Disciplinary Practices (LDPs) has been muted; it seems that only 14 firms have opted for this sort of structure. Interestingly, three firms have used LDPs as a way of making partners of long-serving legal executives. [2009] SJ 7 April 3.

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Trainees – SRA

The SRA has been receiving complaints from disappointed trainees who have had offers of training contracts withdrawn. The basic point that the SRA emphasises is that it cannot get involved in the employment law aspects (refer to our March issue, p32, for a note on employment – and apprenticeship – complications).

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Commissions – Code of Conduct

The rules on commissions received from Authorised Third Parties (ATPs) are set out in sub-rule 2.06:

‘You must ensure that your firm pays to your client commission received over £20 unless the client, having been told that the amount, or if the precise amount is not known, an approximate amount or how the amount is to be calculated, has agreed that your firm may keep it’.
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