How do the lawyers within your firm identify vulnerable clients and meet their needs?
The
concept of vulnerability has been examined by a number of commentators
in a range of fora. A good starting point is the Oxford Dictionary
defines vulnerable as “…exposed to the possibility of being attacked or
harmed, either physically or emotionally”. Collins’ definition goes on
to add “…exposed to …persuasion”. Both definitions are useful to the
COLP. Clients can be said to be vulnerable if they are incapable of
making an informed decision about their affairs or do not understand the
actual or potential consequences of any action they may be instructing
you to take on their behalf.
concept of vulnerability has been examined by a number of commentators
in a range of fora. A good starting point is the Oxford Dictionary
defines vulnerable as “…exposed to the possibility of being attacked or
harmed, either physically or emotionally”. Collins’ definition goes on
to add “…exposed to …persuasion”. Both definitions are useful to the
COLP. Clients can be said to be vulnerable if they are incapable of
making an informed decision about their affairs or do not understand the
actual or potential consequences of any action they may be instructing
you to take on their behalf.
What should be your firm’s priorities and responsibilities when deciding to act for and when advising ‘vulnerable’ clients?
The
Principles of the Code of Conduct 2011 require you to provide a proper
standard of service, taking into account the individual needs and
circumstances of each client.
Principles of the Code of Conduct 2011 require you to provide a proper
standard of service, taking into account the individual needs and
circumstances of each client.
Indicative Behavior 1.6 states that, in taking instructions and during the course
of the retainer, you must have proper regard to your client’s mental
capacity or other vulnerability, such as incapacity or duress.
Indicative Behavior 1.28 states that you are unlikely to have complied
with the Principles if you act for a client when there are reasonable
grounds for believing that the instructions are affected by duress or undue influence without satisfying yourself that they represent the client’s wishes.
of the retainer, you must have proper regard to your client’s mental
capacity or other vulnerability, such as incapacity or duress.
Indicative Behavior 1.28 states that you are unlikely to have complied
with the Principles if you act for a client when there are reasonable
grounds for believing that the instructions are affected by duress or undue influence without satisfying yourself that they represent the client’s wishes.
Indicative Behavior 1.7 requires you to consider whether you should decline to
act or cease to act because you cannot act in the client’s best
interests.
act or cease to act because you cannot act in the client’s best
interests.
The
leading compliance legal matter management system CLIENTCAREmonitor (CCM) identifies a “taxonomy of vulnerabilities”. In setting up a new
matter CCM forces the lawyer to concentrate their mind as to whether the
client is exposed to any of the following:
leading compliance legal matter management system CLIENTCAREmonitor (CCM) identifies a “taxonomy of vulnerabilities”. In setting up a new
matter CCM forces the lawyer to concentrate their mind as to whether the
client is exposed to any of the following:
Information vulnerability
Pressure vulnerability
Redress vulnerability; and
Impact vulnerability
Information Vulnerability
Some
clients may be particularly vulnerable as a result of the greater
difficulties they face in obtaining and processing the legal advice
given to make informed purchasing decisions. For example, if the clients
are restricted physically, such as by being housebound, they may find
it difficult to access the information necessary to make an informed
choice. Furthermore, some consumers will lack the ability to use
information seeking tools, such as the internet. It should also be noted
that such consumers are likely to be subject to what has been termed
“marketing exclusion”. Because they are not seen as profitable, they may
find that they are not targeted by suppliers with information that they
might have found useful.
clients may be particularly vulnerable as a result of the greater
difficulties they face in obtaining and processing the legal advice
given to make informed purchasing decisions. For example, if the clients
are restricted physically, such as by being housebound, they may find
it difficult to access the information necessary to make an informed
choice. Furthermore, some consumers will lack the ability to use
information seeking tools, such as the internet. It should also be noted
that such consumers are likely to be subject to what has been termed
“marketing exclusion”. Because they are not seen as profitable, they may
find that they are not targeted by suppliers with information that they
might have found useful.
The
SRA have recently issued press releases about language vulnerabilities.
How do you advise clients for whom English is not their first language
or who speak no English at all?
SRA have recently issued press releases about language vulnerabilities.
How do you advise clients for whom English is not their first language
or who speak no English at all?
To
comply with the Code and provide a proper standard of service, you must
ensure that your client understands the advice you are giving and fully
appreciates the ramifications of their actions. Using a family member
as an interpreter may appear to be a practical solution,but may simply
move you towards a ‘pressure vulnerability’ as in many instances this
has merely facilitated underlying duress, undue influence or, in the
most extreme situations, fraud.
comply with the Code and provide a proper standard of service, you must
ensure that your client understands the advice you are giving and fully
appreciates the ramifications of their actions. Using a family member
as an interpreter may appear to be a practical solution,but may simply
move you towards a ‘pressure vulnerability’ as in many instances this
has merely facilitated underlying duress, undue influence or, in the
most extreme situations, fraud.
The
use of independent interpreters/translators is the only certain means
of ensuring your client’s best interests are served, but this comes at a
cost. If your client, or rather, potential client,
is not prepared to bear that extra cost, you may well have to advise
that client to go elsewhere, as you cannot act in his or her best
interest. Other examples of information vulnerabilities include age
(although advancing age does not necessarily imply vulnerability),
mental health issues, learning disabilities, depression, serious
Illness, addiction, deafness or blindness.
use of independent interpreters/translators is the only certain means
of ensuring your client’s best interests are served, but this comes at a
cost. If your client, or rather, potential client,
is not prepared to bear that extra cost, you may well have to advise
that client to go elsewhere, as you cannot act in his or her best
interest. Other examples of information vulnerabilities include age
(although advancing age does not necessarily imply vulnerability),
mental health issues, learning disabilities, depression, serious
Illness, addiction, deafness or blindness.
Pressure Vulnerability
In
the perfect market, the client’s actions are fully voluntary. In
practice, clients frequently make decisions when subjected to pressure.
There may be overlap with other aspects of vulnerability; for example,
clients may be more easily pressurised into making a decision if they
lack relevant information. The most common pressure vulnerability is
undue influence, for example in a situation where a client seeks to
radically change the terms of their wills, transfer shares in property,
release equity in their properties, particularly if a client is
accompanied by the person to benefit at the time of giving instructions.
In these circumstances, it is good practice to speak to the client
alone and ascertain that the wishes are those of the client alone
without undue influence from any third party.
the perfect market, the client’s actions are fully voluntary. In
practice, clients frequently make decisions when subjected to pressure.
There may be overlap with other aspects of vulnerability; for example,
clients may be more easily pressurised into making a decision if they
lack relevant information. The most common pressure vulnerability is
undue influence, for example in a situation where a client seeks to
radically change the terms of their wills, transfer shares in property,
release equity in their properties, particularly if a client is
accompanied by the person to benefit at the time of giving instructions.
In these circumstances, it is good practice to speak to the client
alone and ascertain that the wishes are those of the client alone
without undue influence from any third party.
Where
physical intimidation is present layers would doubtless have little
hesitation in finding a remedy, such as by allowing the victim a private
law right or allowing an enforcement authority to take action. Greater
difficulties arise where psychological pressure is in issue. The trick
is to identify this as early as possible (hence the logic of
CLIENTCAREmonitor) and to ask probing questions as early as you can;
don’t wait until the client is about to sign the relevant document. It
may be sensible to advise clients in this position that you will want to
speak to them alone at the time they make the initial appointment rather than springing it on them at the time.
physical intimidation is present layers would doubtless have little
hesitation in finding a remedy, such as by allowing the victim a private
law right or allowing an enforcement authority to take action. Greater
difficulties arise where psychological pressure is in issue. The trick
is to identify this as early as possible (hence the logic of
CLIENTCAREmonitor) and to ask probing questions as early as you can;
don’t wait until the client is about to sign the relevant document. It
may be sensible to advise clients in this position that you will want to
speak to them alone at the time they make the initial appointment rather than springing it on them at the time.
I
recently attended a meeting with the head of fraud at a top 5 lender
who advised that lenders were become increasingly concerned by the
inability of some solicitors to recognise vulnerable clients. I was
advised of a scenario involving a wife/partner being asked to remortgage
the matrimonial home to secure funds for the partner/husband’s business
ventures (but equally this scenario could also fall into the sections
on mental health or depression/illness etc). In the case of a mortgage
default the lender will soon be made aware of the claim of
vulnerability. Not only could such a situation lead to your firm being
removed off the panel but also potentially being reported to the SRA as
well as facing an insurance claim.
recently attended a meeting with the head of fraud at a top 5 lender
who advised that lenders were become increasingly concerned by the
inability of some solicitors to recognise vulnerable clients. I was
advised of a scenario involving a wife/partner being asked to remortgage
the matrimonial home to secure funds for the partner/husband’s business
ventures (but equally this scenario could also fall into the sections
on mental health or depression/illness etc). In the case of a mortgage
default the lender will soon be made aware of the claim of
vulnerability. Not only could such a situation lead to your firm being
removed off the panel but also potentially being reported to the SRA as
well as facing an insurance claim.
All property lawyers should be familiar with the the ruling of the House of Lords in Royal Bank of
Scotland v Etridge. This case lead to an overhaul by the banks as to
how co-owners in this situation should be advised. A solicitor once
admitted to an underwriter at Zurich that, when she had a meeting with a
wife who had been asked to remortgage the matrimonial home to secure
her husband’s business debts, the wife had no idea what she was really
being asked to do, i.e. put her home at risk of repossession if her
husband’s business failed. After a frank discussion with the solicitor, she refused to sign the papers.
Scotland v Etridge. This case lead to an overhaul by the banks as to
how co-owners in this situation should be advised. A solicitor once
admitted to an underwriter at Zurich that, when she had a meeting with a
wife who had been asked to remortgage the matrimonial home to secure
her husband’s business debts, the wife had no idea what she was really
being asked to do, i.e. put her home at risk of repossession if her
husband’s business failed. After a frank discussion with the solicitor, she refused to sign the papers.
Insurers,
regulators, the LEO and lenders all say that there are still too many
co-owners in this situation who are not being properly advised (or
perhaps more accurately – it can’t be proved that they were properly
advised) and negligence claims come in from lenders against the law
firms when the business fails but repossession proves to be troublesome
when the co-owner defends on grounds that they weren’t properly advised.
regulators, the LEO and lenders all say that there are still too many
co-owners in this situation who are not being properly advised (or
perhaps more accurately – it can’t be proved that they were properly
advised) and negligence claims come in from lenders against the law
firms when the business fails but repossession proves to be troublesome
when the co-owner defends on grounds that they weren’t properly advised.
Redress Vulnerability
Another
way in which clients may be vulnerable is through the greater
difficulties they face in obtaining redress (redress vulnerability).
Again, there will be a connection here with other aspects of
vulnerability. For example, clients may find it difficult to secure
redress because they are unaware of their legal rights, or of the
mechanisms under which they can seek a resolution of their grievances.
Where a firm sends and receives countersigned a well drafted client
care letter then the issue of redress vulnerability goes away.
way in which clients may be vulnerable is through the greater
difficulties they face in obtaining redress (redress vulnerability).
Again, there will be a connection here with other aspects of
vulnerability. For example, clients may find it difficult to secure
redress because they are unaware of their legal rights, or of the
mechanisms under which they can seek a resolution of their grievances.
Where a firm sends and receives countersigned a well drafted client
care letter then the issue of redress vulnerability goes away.
Impact Vulnerability
Impact
vulnerability is perhaps the least obvious vulnerability and concerns
the greater effect of loss, or harm, on certain clients.
vulnerability is perhaps the least obvious vulnerability and concerns
the greater effect of loss, or harm, on certain clients.
The
greater loss suffered by vulnerable clients from making inappropriate
decisions is likely to result from low income and/or low wealth
(although not impacting solicitors take note of the recent FSA issues
concerning pay day loans).
greater loss suffered by vulnerable clients from making inappropriate
decisions is likely to result from low income and/or low wealth
(although not impacting solicitors take note of the recent FSA issues
concerning pay day loans).
The
ideal way of reducing impact vulnerability is to reduce the chance of
the client making a decision that will have such an impact. A client who
is well-informed, confident and capable, acting with choice and without
pressure in circumstances where he has a remedy should it need to be
used is unlikely to make such a decision. Impact vulnerability can,
therefore, perhaps be best-tackled by addressing the other forms of
vulnerability identified and discussed above.
ideal way of reducing impact vulnerability is to reduce the chance of
the client making a decision that will have such an impact. A client who
is well-informed, confident and capable, acting with choice and without
pressure in circumstances where he has a remedy should it need to be
used is unlikely to make such a decision. Impact vulnerability can,
therefore, perhaps be best-tackled by addressing the other forms of
vulnerability identified and discussed above.
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