Key issues
•
In‑house lawyers practising overseas are subject to restrictions on who they can act for.•
When acting for more than one client, you must act in the best interest of each client.•
Local law and regulation may further restrict who you can act for.•
Understanding who your client is in each instance will assist with complying with the requirements of the Handbook.2.1 Under Rule 4 (In‑house practice) of the Practice Framework Rules, in‑house lawyers employed by a body overseas may act only for:
− their employer;
− a company or organisation controlled by their employer or in which their employer has a substantial measure of control;
− a company in the same group as their employer;
− a company which controls their employer;
− an employee, director or company secretary of a company or organisation mentioned in one of the four preceding bullets; and
− subject to certain restrictions, members of the public on a pro bono basis.
In addition, if the in‑house lawyer has
registered in another member state under the Establishment Directive with the professional body for the local legal profession, the in‑house lawyer may practise in‑house to the extent that a member of that legal profession is permitted to do so.
2.2 When advising someone other than your employer, you must have professional indemnity insurance cover or consider whether your employer has appropriate indemnity insurance or funds to meet any award made as a result of a claim in professional negligence against you. If no such funds are in place, you must inform the client in writing that you are not covered by the compulsory insurance scheme (Rule 4.2 Practice Framework Rules). This requirement is unlikely to be of relevance to in‑house lawyers working within a solvent and well‑managed organisation.
2.3 The Practice Framework Rules applying to in‑house lawyers employed overseas are more restrictive than those applied to in‑house lawyers employed in England and Wales, limiting the associated entities that an in‑house lawyer can advise to those his or her employer controls or in which the employer has a substantial measure of control. In‑house lawyers overseas may not therefore be able to act for joint ventures in which their employer holds only a minority interest, trade associations, pension funds or clubs or associations operated for the benefit of colleagues.
2.4 The category of colleagues in‑house lawyers practising overseas can advise is also more restrictive. It does not extend to former employees or directors. Where you are allowed to advise colleagues, you will not be obliged to ensure that your colleagues do not wish to
instruct another independent lawyer. However, you must ensure that:
− the matter relates to or arises out of the work of your employer;
− the matter does not relate to a claim arising out of personal injury to the work colleague;
and
− no charge is made for your work, unless those costs are recoverable from another source.
2.5 In‑house lawyers practising overseas should also be aware that, in contrast to those practising in England and Wales, the Practice Framework Rules only allow you to undertake conveyancing matters for a colleague and not anyone else who is a joint owner or joint buyer of the property with that colleague. In reality, whether or not in‑house lawyers may advise work colleagues will be determined by their employers.
2.6 Under Rule 4.10, Practice Framework Rules, in‑
house lawyers employed overseas are permitted to conduct work on a pro bono basis in the course of their practice to the same extent as their colleagues employed in England and Wales.
For further details see Section C, paragraph 9, Can I advise on a pro bono basis?
2.7 Any solicitor practising overseas who holds a practising certificate is also allowed under Rule 10.2, Practice Framework Rules to advise friends, relatives, companies wholly‑owned by them or their family and registered UK charities, without remuneration, on legal matters including reserved legal activities. In these circumstances, there is an exclusion from the requirement to carry indemnity insurance. However, clients should still be informed that you do not carry insurance and you should consider limiting your
2.8 The Practice Framework Rules only apply to SRA regulated lawyers and not to any other members of your department who will need to have regard to their own professional regulations and any relevant local law and regulation when determining for which entities and colleagues they can act for.
2.9 If you are an England and Wales solicitor practising in another EU member state under the Establishment Directive and registered with the professional body for the local legal profession, you are entitled to advise any client that members of that local professional body are entitled to advise as an in‑house lawyer under the local rules. In some circumstances this may mean you are able to act for clients that you would not ordinarily be able to act for under the restrictions the SRA has imposed on England and Wales solicitors practising in‑house overseas.
2.10 In‑house lawyers owe a number of general duties to their clients under the Overseas Principles.
For example, Overseas Principle 4 requires them to act in the best interests of each client. It is therefore important to understand when you may be acting for more than one person to ensure that their interests are in fact aligned – although this is as likely to be of concern to your employer as it is to you. You will also need to be aware of any duties that might arise under any local law or regulation. For further discussion on the duties applying to in‑house lawyers see Section C, paragraph 3, What duties do I owe my client?
2.11 Failing to establish who your client is in any particular situation could give rise to issues over the scope of legal professional privilege. For further discussion, see Section B, paragraph 1.3, Who is my client?.
PRACTICAL EXAMPLE
You are the only England and Wales qualified solicitor working in the US in‑house department of a New York based company. You are asked by your employer to provide some advice on a commercial contract which benefits a joint venture entity in which the New York company has a small stake. Are you able to act?
Contrary to the position in England and Wales, under the Practice Framework Rules in‑house lawyers practising overseas are unable to act for companies in which their employer has a stake unless that stake is large enough to give the employer a substantial measure of control. A practical solution here may be to explore with an American lawyer colleague whether they are able to do the work in your place.