Conflict of Interest Rules
Rules made by the Council of the Law Society of Scotland and approved by the Lord President of the Court of Session pursuant to section 34 of the Solicitors (Scotland) Act 1980.
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1. These rules may be cited as the Solicitors (Scotland) Practice Rules 1986.
These rules shall come into operation with respect to transactions commenced on or after 1st January 1987.
2. In these rules, unless the context otherwise requires:
‘the Act’ means the Solicitors (Scotland) Act 1980;
‘client’ includes prospective client;
‘Council’ means the Council of the Society;
‘established client’ means a person for whom a solicitor or his firm has acted on at least one previous occasion;
‘employed solicitor’ means a solicitor employed by his employer for the purpose, wholly or partly, of offering legal services to the public whether or not for a fee;
‘firm’ includes any office at which that firm carries on practice and any firm in which that firm has a direct interest through one or more of its partners, or members;
‘the Society’ means the Law Society of Scotland established under the Act;
‘solicitor’ means a solicitor holding a practising certificate under the Act, or an incorporated practice;
‘transaction’ includes a contract and any negotiations leading thereto.
Conflict of Interest
3. A solicitor shall not act for two or more parties whose interests conflict.
4. Without prejudice to the generality of rule 3 hereof an employed solicitor whose only or principal employer is one of the parties to a transaction shall not act for any other party to that transaction; provided always that such solicitor may, where no dispute arises or appears likely to arise between the parties to that transaction, act for more than one party thereto, if and only if:
the parties are associated companies, public authorities, public bodies, or government departments or agencies;
the parties are connected one with the other within the meaning of section 533 Income and Corporation Taxes Act 1970. (Since replaced by section 839 of the ICTA 1988)
5(1) Without prejudice to the generality of rule 3 hereof, a solicitor, or two or more solicitors practising either as principal or employee in the same firm or in the employment of the same employer, shall not at any stage, act for both seller and purchaser in the sale or purchase or conveyance of heritable property, or for both landlord and tenant, or assignor and assignee in a lease of heritable property for value or for lender and borrower in a loan to be secured over heritable property; provided, however, that where no dispute arises or might reasonably be expected to arise between the parties and that, other than in the case of exception (a) hereto, the seller or landlord of residential property is not a builder or developer, this rule shall not apply if:
(a) the parties are associated companies, public authorities, public bodies, or government departments or agencies;
(b) the parties are connected one with the other within the meaning of section 533 Income and Corporation Taxes Act 1970 (Since replaced by section 839 of the ICTA 1988);
(c) the parties are related by blood, adoption or marriage, one to the other, or the purchaser, tenant, assignee or borrower is so related to an established client; or
(d) both parties are established clients or the prospective purchaser, tenant, assignee or borrower is an established client; or
(e) there is no other solicitor in the vicinity whom the client could reasonably be expected to consult; or
(f) in the case of a loan to be secured over heritable property, the terms of the loan have been agreed between the parties before the solicitor has been instructed to act for the lender, and the granting of the security is only to give effect to such agreement.
5(2) In all cases falling within exceptions (c), (d) and (e) both parties shall be advised by the solicitor at the earliest practicable opportunity that the solicitor, or his firm, has been requested to act for both parties, and that if a dispute arises, they or one of them will require to consult an independent solicitor or solicitors, which advice shall be confirmed by the solicitor in writing as soon as may be practicable thereafter.
6. A solicitor shall unless the contrary be proved be presumed for the purposes of rules 4 and 5 hereof to be acting for a party for whom he prepares an offer whether complete or not, in connection with a transaction of any kind specified in these rules, for execution by that party.
Documents sent for signature
7. A solicitor acting on behalf of a party or prospective party to a transaction of any kind specified in rule 5 hereof shall not issue any deed, writ, missive or other document requiring the signature of another party or prospective party to him without informing that party in writing that:
such signature may have certain legal consequences, and
he should seek independent legal advice before signature.
8. Where a solicitor, or two or more solicitors practising as principal or employee in the same firm or in the employment of the same employer, knowingly intends or intend to act on behalf of two or more prospective purchasers or tenants (other than prospective joint purchasers or tenants) of heritable property (in this rule referred to as the clients), the clients shall be informed of such intention, and a single solicitor shall not, where he has given any advice to one of the clients with respect to the price or rent to be offered, or with respect to any other material condition of the prospective bargain, give advice to another of the clients in respect of such matters.
9. The Council shall have power to waive any of the provisions of these rules in any particular circumstances or case.
10. Breach of any of these rules may be treated as professional misconduct for the purposes of Part IV of the Act (complaints and disciplinary proceedings).
