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Proposed change to solicitor practice rule approved

01 December 2014 | tagged Current issues

Following a consultation with members, the proposed change to the practice rule on solicitors acting as a power of attorney, below, has been approved by the Lord President.

The rule change comes into effect on 1 January.

(The final decision as to whether any changes should be made rests with the Regulatory Committee, which is made up of solicitors and non-solicitors and is legally responsible for the regulatory work of the Law Society. Any changes must also be approved by the Lord President.)

1.    Master Policy of Professional Indemnity Insurance and Scottish multi-national practices

The Council of the Law Society is committed to the current Master Policy of Professional Indemnity Insurance and the stability it provides, both to the profession and the public.  However, the Council has received a legal opinion to suggest the practice rules as currently drafted place a significant risk on the Master Policy by allowing Scottish based multi-national practices (MNPs) to opt out of the policy and make alternative arrangements of insurance.

If Scottish MNPs can choose not to be insured under the Master Policy then that principle of alternative insurance arrangements has to be offered to all other Scottish practices. The net result will be that the Society will have moved away from a single policy of insurance to an open market.

The Council is therefore proposing an amendment to rule 7.1 to require all Scottish MNPs to have cover under the Master Policy.

More detailed background information is available in the briefing paper at the foot of this page.

This consultation is now closed.

2.    Solicitors acting as a power of attorney

The Society is concerned that the current wording of rule 6.22 on power of attorney is too widely worded and results in solicitors being subject to regulation when they themselves are a power of attorney in a private matter away from their business. The requirements on solicitors in these circumstances may be disproportionate and impractical in that it forces some solicitors without access to a client account to manage money of the granter of a power of attorney via a client account.

The Council is therefore proposing an amendment to Rule 6.22 to recognise that solicitors may wish to be an attorney for a parent etc. and keep this separate from their professional life as a solicitor. The change is also intended to prevent a significant portion of the profession from having to seek a waiver (for example any retired solicitor, criminal practitioner without a client account and in-house lawyer acting as attorney for a parent or loved one would all be in breach of the current rule as they would not have access to a client account).

More detailed background information is available in the briefing paper at the foot of this page.

This consultation is now closed.

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