Licensees who are leaving their current practice – whether it be for another job, to pursue solo practice, to retire or just to leave private practice – often have questions about what they must do in order to meet their ethical obligations to their clients.
The following analysis applies when a licensee is leaving their firm or solo practice for another firm or solo practice. It outlines some of the ethical obligations a licensee and their former firm owe to their clients before they leave, according to the CPATA Code of Professional Conduct (the “Code”).
For information on a licensee’s ethical obligations when they are leaving their current practice because they are retiring, moving down to a Class 2 licence or surrendering their license, see previous ethics piece on surrendering a licence.
The Scenario
A licensee is leaving their firm or solo practice for another firm or solo practice. What are their obligations to their clients prior to and subsequent to departing?
The Rules
A client’s choice of representation
The Commentary to Rule 6 provides that
When an agency firm is dissolved or an agent leaves an agency firm to practise elsewhere, it usually results in the termination of the agent–client relationship between a particular client and one or more of the agents involved. In such cases, most clients prefer to retain the services of the agent who they regarded as being in charge of their business before the change. However, the final decision rests with the client and the agents who are no longer retained by that client must act in accordance with the principles set out in this rule and, in particular, must try to minimize expense and avoid prejudice to the client. The client’s interests are paramount and, accordingly, the decision as to whether the agent will continue to represent a given client must be made by the client in the absence of undue influence or harassment by either the agent or the agency firm. That may require either the departing agent or the agency firm, or both, to notify the client in writing that the agent is leaving and advise them of the options available to have the departing agent continue to act for them, to have the agency firm continue to act for them or to retain a new agent or new agency firm to act for them.
Let’s break this down:
- When an agent leaves a firm, the agent’s clients have the right to chose whether to remain with the firm (if possible) or to follow their agent to new employment (if possible).
- When this happens, an agent has to make sure the client does not incur any additional expense or delay as a result.
- Neither the departing agent or remaining firm must do anything to try and influence the client’s choice of agent.
- This is one of those potentially fractious situations that can make the agent/firm/profession look unprofessional if not handled with the best interests of the clients in mind.
Communications after withdrawal
Rule 6-5 provides
If an agent withdraws or is discharged from a matter and is in receipt of an official communication on the matter to which a response must be filed in order to avoid abandonment of the matter, the agent must endeavour to report the official communication in a timely manner to the former client in order to avoid prejudice to that client and to permit them to take appropriate steps to safeguard their rights in the matter.
This is another good example of putting the current or former client’s best interests first. It’s important to do the right thing and communicate clearly and openly with the client about the situation.
CPATA’s Advice
The Code requires that clients be made aware that they have their choice of representation when their agent is departing from a firm. If a licensee is remaining in private practice and had been working on files where the clients understood the licensee to be their agent, those clients should be given the option, ideally via joint notice from the licensee and the firm, of staying with the firm, staying with the licensee as their agent, or choosing new representation.
The Code requires that every effort be made to ensure that the agent’s departure does not prejudice the client and requires that “every effort must be made to ensure that withdrawal [if indeed the agent is withdrawing] occurs at an appropriate time in the prosecution of an application, in keeping with the agent’s obligations.”
If the client chooses to appoint a new agent upon a licensee’s departure from their former employ, licensees should be aware that the Code provides a list in the Commentary to Rule 6 of a number of obligations an agent has upon discharge or withdrawal, which are also illuminated in a previous ethical analysis. These obligations include returning the client’s file to them and/or cooperating with the successor agent in the transfer of the file.
Note that the obligation licensees have to their clients extends past the agent-client relationship. If, after a licensee has been discharged by the client or withdrawn from the file, they receive official communication to which a response is required in order to avoid abandonment, the licensee is obligated under the Code to report that communication in a timely manner to the client in order to avoid any prejudice to the client.
Ultimately each licensee has to decide what the correct course of action is that will protect client interests and adhere to their professional obligations. Every circumstance is unique and it is up to the licensee to exercise their own professional judgement. But through the Ethics Inquiry process, CPATA’s professional conduct experts are available to help interpret the Code as part of the process of risk-assessment and ethical analysis.
We look forward to receiving more inquiries and providing more guidance to licensees. It helps us identify areas where further information or analysis might be instructive and it will help to inform our consultation on the Code, which will be rolling out in early 2023.