The guidance on referrals has become increasingly messy, with the latest edict on what to do if a client has a pre-existing referral arrangement.

A summary of the main occasions when you should decline to act:

where it would involve you in a breach of professional conduct (eg undisclosed contract race);

if you lack the expertise to carry out the client’s instructions confidently;

Suppose a fee-earner wants to close a file, but there is a small client balance left over in client account (presumably, the fee-earner miscalculated the sums at some stage). In that situation, can you simply transfer the balance to a general or suspense client ledger?

Accounts Rule 18, dealing with controlled trust money, was recently repealed. The end result is that solicitors are now permitted to include trust money within their client bank accounts.

The Cancellation of Contracts made in a Consumer’s House or Place of Work Regs 2008 came into force in October 2008. These give consumers the right to cancel any contract for the supply of goods or services (such as a solicitor’s retainer) made during a visit to the consumer’s home or place of work.

A ‘consumer’ is defined as a natural person who is not acting in the course of his trade or profession. Note that it does not matter whether the visit was solicited or unsolicited, provided the contract is worth more than £35. Most importantly, there is a mandatory cooling-off period of seven days in which the contract can be cancelled. No contracting-out of the Regs is possible.

Section 994 Companies Act 2006 came into force on 1 October. It allows members of an LLP to petition the court that the affairs of the LLP are being conducted in a way that is ‘unfairly prejudicial’ to the interests of some, or all, of its members.

The code of conduct was changed earlier this year so that the definition of ‘employee’ now makes it clear that consultants (or locums) who work non-exclusively for a firm are not employees.

’You must ensure that your firm pays to your client commission received over £20 unless the client, having been told 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.’ (r2.06 Code of Conduct).

‘You must act in the best interests of each client.’ (r1.04 Code of Conduct).

‘The firm [must] account to the client for any pecuniary reward or other advantage which the firm receives from a third party.’ (r4(d) Financial Services (Scope) Rules).

Do you know what a PEP is? The answer is that it is an abbreviation for Politically Exposed Persons.

The concern is that there are a number of corrupt politicians and PEPs around the world (eg stripping national assets, or bribery) who might seek to use the UK to set up companies and trusts to help channel funds out of their country, and to buy properties and other investments in the UK.

It is obviously always important to ensure that you have full authority from a client before acting in litigation. If a company is involved, then this means ensuring that you do indeed have the proper, legitimate, authority of the company – and not just of an individual associated with the company. For instance, has any required board meeting ever actually been held (and the minutes prepared)?

Some parts of the profession are only now waking up to the dangers posed by consumer protection regs introduced over the last 20 years. Indeed, there are now major fears that a large number of existing retainers will prove to be unenforceable because of an inadvertent breach of these (largely unknown) regs.

The Lands Tribunal will become the Lands Chamber of the Upper Tribunal on 1 June (although it will continue to use the name Lands Tribunal for the time being).

The SRA acquired important new regulatory powers on 31 March. Whilst the details are still being worked out, these powers will impact enormously on all law firms since they give the SRA powers to regulate firms (and not just individuals).

We all know that if you give a costs estimate that proves to be wildly inaccurate, then you cannot expect to recover your full costs.