SRA: Informed consent required
A law firm that acted on both sides of a conveyancing transaction without obtaining consent from the buyer has been rebuked by the Solicitors Regulation Authority (SRA).
Norwich-based Leadenhall Law Group said it had told the client in its paperwork that it was also acting for the seller but did not seek their informed consent.
According to a notice published yesterday by the SRA, the client terminated the retainer for the purchase and also a lease extension in March 2022 after discovering the firm was acting for the other side as well.
Leadenhall said it had considered if a conflict could occur but, as it was an auction sale, there would be no negotiations.
Further, it believed it had sufficient safeguards in place. While the seller’s solicitor was situated in the Norwich office, the buyer’s solicitor was situated in the firm’s London office.
Each office used separate and different case management systems, meaning “there was no risk of contamination or the fee-earners acting on each side of the transaction being able to view the other party’s file”.
Leadenhall told the SRA that the client must have been aware it acted for both parties, as it was stated in literature provided to them. The regulator said: “However, they admit that the client never specifically agreed to this, but that they believe the client would have agreed had they asked them.”
Informed consent is a requirement of the SRA Code of Conduct for Firms, however, once a firm has decided it can exercise the exception that allows it to act for two or more clients in the same matter.
In mitigation, Leadenhall said it has since changed its policy and no longer acted for both buyer and seller in a property transaction. It also stressed that it did refer to SRA guidance and considered it had sufficient safeguards in place to enable it to act for both parties.
The SRA said a sanction was required “to uphold public trust and confidence in the delivery of legal services”.
