THE USE OF AGENTS
There may be tasks involved in any case being handled by a solicitor's firm. Some tasks dictate that only the solicitor in charge of the case deals with the matter, some other tasks allow delegation to other staff within for firm, and future tasks, such as searching, are best done by specialised outside agents, because the necessary expertise is not within the firm.
Some tasks could be done by the solicitor or his staff but the solicitor, for various reasons, opts to use an agent. An example would be where an agent is used to lodge and file documents with the Revenue or the various Registries, rather than the documents with the Revenue or the various Registries, rather than the documents being posted directly to these bodies from the solicitors practising outside Dublin.
A solicitor firm's policy in relation to which tasks are allocated to agents, should be reviewed and this should be done at regular intervals. Some firms' policies were decided at a time when documents were not accepted by post by government and other bodies, and there was no alternative but to attend personally at the relevant office or to use an agent to do so.
Some solicitors believe that personal filing of documents by an agent ensures quicker turnaround of the documents, and that personal attendance enables queries to be relayed quickly to the solicitor and answered quickly, rather than lengthy correspondence being entered into. On the other hand, solicitors who opt to lodge documents by post say that this is more efficient. The matter should be reviewed.
The schedule of tasks on this page indicates the government or other agencies which still require personal attendance.
2 - 4 THE SELECTION OF AN AGENT
In selecting a legal agent, a solicitor will wish to ensure that the work will be executed carefully, efficiency and honestly, firstly in the clients' interests, so that their affairs are progressed in a proper manner, and secondly, in the solicitors own interest, as otherwise the solicitor may be exposed either to a claim for negligence or a claim may be made on the Law Society's Compensation Fund.
A solicitor has the option of choosing between a solicitor agent or a non-solicitor agent. Some solicitors' firms specialise in agency work, others do a large volume of agency work and most solicitors are available to do occasional agency work for colleagues. The latter would include acting as an agent for colleagues by attending to matters locally for a colleague in another location.
Section 55 - 59 of the Solicitors Act, 1954, as amended, have the effect of restricting the provision of certain legal services to the provision of those services in a firm owned by a practising solicitor. They prohibit fees, which a solicitor earns by virtue of the solicitor's work, being shared with a non-solicitor, such as a non-solicitor employer. The employment of a solicitor in-house by a non-solicitor legal agency, to carry out the relevant legal services, does not bring the provision of those services within the legalisation.
Section 17 of the Courts Act, 1971, outlines the right of audience before a court as follows:
"A solicitor who is acting for a party in an action, suit, matter or criminal proceedings in any court and a solicitor qualified to practise (within the meaning of the Solicitors Act, 1954) who is acting as his assistant shall have a right of audience in that court".
Therefore, applications to court by an agent must clearly be made by a solicitor agent in private practice or that solicitor's direct employee.
On the other hand, the requirement for a solicitor or a member of the solicitor's staff to attend on counsel, is not a matter of law, but rather of the Bar Council's own rules which state that counsel should be attended by counsel's instructing solicitor, clerk, assistant or apprentice.
Before selecting an agent for a particular task, for example, closing a sale, a solicitor should ensure that the agent has the necessary expertise to carry out the task.
Delivery tasks, both local and international, are usually assigned to an agent. In selecting a delivery agent the solicitor must choose between An Post, a document exchange or a courier firm. The solicitor firm's policy on this should also be reviewed.
As with any other selection process, a solicitor should not choose an agent simply on the basis of the cheapness of the agent's fees. A quality service costs money to provide.
5 - 9 INSURING AGAINST THE RISKS
No matter how carefully an agent is selected on the basis of the basis of the agent's experience, expertise and reputation, there is always a risk firstly, that a mistake will occur or secondly, that there will be dishonesty on the part of the agent, or the agent's employee. Solicitors should take steps to ensure that both these risks are insured against, to the extent possible, both in the interests of the solicitor's clients and in the solicitor's own interest. The existence of such insurance will also be in the agent's interest.
NEGLIGENCE
Solicitors should satisfy themselves that the agents they are proposing to use are properly insured under a standard acts, errors and omissions policy and for other relevant risks. This applies whether the agent is a solicitor agent or a non-solicitor agent.
From the agents point of view, the level of cover will be related to the volume of the agents' work and the value of the transactions with which t he agent is involved. The solicitor should check that the agents' cover is equal to or exceeds the value of the largest transaction with which the agent will be involved on behalf of the solicitor. Thus, the level of cover is likely to equal or exceed the level of the solicitor's own cover.
The level of cover must be on an "each and every claim" basis. Cover on an "aggregate" basis leaves the possibility that claims on the agents policy made early in the year will reduce, or even exhaust, the amount of cover for he remainder of the year, and would not be appropriate.
The policy should be on a "claims made" rather than an "occurring" basis.
The self insured excess on each claim should be checked.
Insurance policies will not cover illegal acts. As seen above, agents who engage in work restricted by law to solicitors are acting illegally and thus are not covered for such work.
Solicitors who occasionally do agency work for colleagues should seek specific confirmation from their insurers that they are insured for this work. Individual policies vary. This cover is available.
Solicitors using a solicitor colleague as agent, even on a once off basis, should check the agents cover, if the transaction is for a value greater than the minimum insurance which a solicitor is now, by law, required to carry.
Solicitors should check the insurance cover of their delivery agents, whether An Post, document exchange or courier. The compensation available from An Post is limited. If an item is being sent by registered post, the solicitor can opt to register the item for a fee higher than the standard registration fee and this will ensure a higher level of compensation in the event of loss. However, if, for instance, a Land Certificate is lost, the full consequential loss, including professional fees incurred in replacing the Land Certificate, is unlikely to be recovered.
A solicitor sometimes decides to use a courier rather than An Post for an item because of the importance of the item. If the courier has no insurance, this may not in fact be a safe option.
DISHONESTY
Legal agents do not have a compensation fund to compensate solicitors' clients who suffer loss because of the acts of dis-honest legal agents.
Under the Solicitors Acts, 1954 to 1994 solicitors are obliged to contribute to the Law Society Compensation Fund, which is available to recompense the clients of solicitors, in the event of a solicitor's dis-honesty. Circumstances may arise where claims will be made on the fund arising out of an agent's dishonest acts, as opposed to a solicitor's dishonest acts.
If a claim is made on the Compensation Fund and paid, the amount paid is a debt due to the fund by the solicitor on whose behalf the payment is made. If the amount is not recouped from the solicitor, the Compensation Fund is then depleted by the amount paid and will require further funding by the profession. Therefore, solicitors should seek to ensure that the dishonest acts of their agents, so that a client will not be obliged to seek to have recourse to the Law Society's Compensation Fund.
In accordance with the normal principles of insurance, cover is not available for principals of agents' firms, for their own dishonesty. Such cover is available only for their employees. Solicitors should satisfy themselves that their agents insure against their employees' dishonesty, and should be aware that he dishonesty of the principal, as opposed to the employee, is not covered.
10 - 12 OPERATIONAL AND REVIEW SYSTEMS
Solicitors should meet their agents and familiarise themselves with the systems which their agents operate. They should agree review systems with them. How are documents which are sent tot he agent recorded by the agent? Is receipt acknowledged? Are regular updates given, explaining the reasons for delay? Can an inquiry about the status of a matter be dealt with immediately?
Solicitors should ensure that all the members of their firms who use agents familiarise themselves with the agents' systems.
Solicitors should ensure that all members of their firms who use agents familiarise themselves with the agents' systems.
Solicitors should put in place their own control systems. They should be aware of the turnaround times for routine tasks and diary these forward for review accordingly. The solicitor should have in place a system of effective steps which will be taken if there is a delay in a particular matter, the steps to be automatically triggered in the event of delay.
The relationship between a solicitor and an agent is a two-way affair.
As with any other business, prompt payment of accounts is important for the agent's cashflow. Solicitors should ask their agents how they, through their systems, can best assist the work of the agent.
- GOOD PRACTICE IN RELATION TO CHEQUES AND OTHER SPECIFIC MATTERS
- All cheques, especially cheques from a solicitor's client account, should be crossed "account payee" and made payable to the relevant body to whom fees or taxes are being paid. They should never be made payable to the agent, or the agent's company.
- Proof of payment, by way of receipts or vouchers, should be required from the agent.
- All cheques for payment of court fees should be made payable to the relevant stamping authority.
- The solicitor should put a bank guarantee in place with the Revenue Commissioners, so that cheques from the solicitor's firm will be accepted directly.
- The client's name and file reference should be on each cheque and document.
CONCLUSION
It is hoped that the guidelines and the schedule of tasks commonly assigned to agents given in this note will assist all solicitors to carry out their own review of their use of legal and other agents.
There are risks in all situations and these cannot be excluded. However, as with every other area of a solicitor's practice, careful homework, good supervision and regular review will reduce the risk of disaster.
Review of use of Legal Agents by Solicitors
Solicitors are in the business of providing efficient legal services for their clients at a competitive cost. To achieve this, the use of experienced and competent legal agents is essential for most practitioners, for whom it would not be practical or economic either to do all the work themselves, or to seek to have the work done by their own employees, who may not have the necessary expertise.
This review of the use of legal agents by solicitors looks at the occasions when agents are used, the selection of an agent, insurance and related matters and operational and review systems. The numbers refer to the related item in the guidelines.
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- Good Practice in Relation to Cheques and Other Specific Matters
- All cheques, especially cheques from a solicitor's client account, should be crossed "account payee" and made payable to the relevant body to whom fees or taxes are being paid. They should never be made payable to the agent, or the agent's company.
- Proof of payment, by way of receipts or vouchers, should be required from the agent.
- All cheques for payment of court fees should be made payable to the relevant stamping authority
- The solicitor should put a bank guarantee in place with the Revenue Commissioners, so that cheques from the solicitor's firm will be accepted directly.
- The client's name and file reference should be on each cheque and document.
- The solicitor's name should be on each document
- The use of agents
There are many tasks involved in any case being handled by a solicitor's firm. Some tasks dictate that only the solicitor in charge of the case deals with the matter, some other tasks allow delegation to other staff within the firm, and further tasks, such as searching, are best done by specialised outside agents, because the necessary expertise is not within the firm.
A solicitor firm's policy in relation to which tasks are allocated to agents, should be reviewed and this should be done at regular intervals. Some firms' policies were decided at a time when documents were not accepted by post by government and other bodies, and there was no alternative but to attend personally at the relevant office or to use an agent to do so.
Some solicitors believe that personal filing of documents by an agent ensures quicker turnaround of the documents, and that personal attendance enables queries to be relayed quickly to the solicitor and answered quickly, rather than lengthy correspondence being entered into. On the other hand, solicitors who opt to lodge documents by post say that this is more efficient. The matter should be reviewed.
2 - 4 The selection of an agent
In selecting a legal agent, a solicitor will wish to ensure that the work will be executed carefully, efficiency and honestly, firstly in the clients' interests, so that their affairs are progressed in a proper manner, and secondly, in the solicitor's own interest, as otherwise the solicitor may be exposed either to a claim for negligence or a claim may be made on the Law Society's Compensation Fund.
A solicitor has the option of choosing between a solicitor agent or a non-solicitor agent. Some solicitors' firms specialise in agency work, others do a large volume of agency work and most solicitors are available to do occasional agency work for colleagues. The latter would include acting as an agent for colleagues by attending to matters locally for a colleague in another location.
Sections 55 - 59 of the Solicitors Act, 1954, as amended, have the effect of restricting the provision of those services in a firm owned by a practising solicitor. They prohibit fees, which a solicitor earns by virtue of the solicitor's work, being shared with a non-solicitor employer. The employment of a solicitor in-house by a non-solicitor legal agency, to carry out the relevant legal services, does not bring the provision of those services within the legislation.
Section 17 of the Courts Act, 1971, outlines the right of audience before a court as follows:
"A solicitor who is acting for a party in an action, suit, matter or criminal proceedings in any court and a solicitor qualified to practise (within the meaning of the Solicitors Act, 1954) who is acting as his assistant shall have a right of audience in that court".
Therefore, applications to court by an agent must clearly be made by a solicitor agent in private practice or that solicitor's direct employee.
On the other hand, the requirement for a solicitor or a member of the solicitor's staff to attend on counsel, is not a matter of law, but rather of the Bar Council's own rules which state that counsel should be attended by counsel's instructing solicitor, clerk, assistant or apprentice.
Before selecting an agent for a particular task, for example, closing a sale, a solicitor should ensure that the agent has the necessary expertise to carry out the task.
Delivery tasks, both local and international, are usually assigned to an agent. In selecting a delivery agent the solicitor must choose between An Post, a document exchange or a courier firm. The solicitor firm's policy on this should also be reviewed.
As with any other selection process, a solicitor should not choose an agent simply on the basis of the cheapness of the agent's fees. A quality service costs money to provide.
5 - 9 Insuring against the risks
No matter how carefully an agent is selected on the basis of the agent's experience, expertise and reputation, there is always a risk firstly, that a mistake will occur or secondly, that there will be dishonesty on the part of the agent, or the agent's employee. Solicitors should take steps to ensure that both these risks are insured against, to the extent possible, both in the interests of the solicitor's clients and in the solicitor's own interest. The existence of such insurance will also be in the agent's interest.
Negligence
Solicitors should satisfy themselves that the agents they are proposing to use are properly insured under a standard acts, errors and omissions policy and for other relevant risks. This applies whether the agent is a solicitor agent or a non-solicitor agent.
From the agents point of view, the level of cover will be related to the volume of the agents' work and the value of the transactions with which the agent is involved. The solicitor should check that the agents' cover is equal to or exceeds the value of the largest transaction with which the agent will be involved on behalf of the solicitor. Thus, the level of cover is likely to equal or exceed the level of the solicitor's own cover.
The level of cover must be on an "each and every claim" basis. Cover on an "aggregate" basis leaves the possibility that claims on the agents policy made early in the year will reduce, or even exhaust, the amount of cover for the remainder of the year, and would not be appropriate.
The policy should be on a "claims made" rather than an "occurring" basis.
The self insured excess on each claim should be checked.
Insurance policies will not cover illegal acts. As seen above, agents who engage in work restricted by law to solicitors are acting illegally and thus are not covered for such work.
Solicitors who occasionally do agency work for colleagues should seek specific confirmation from their insurers that they are insured for this work. Individual policies vary. This cover is available.
Solicitors using a solicitor colleague as agent, even on a once off basis, should check the agents cover, if the transaction is for a value greater than the minimum insurance which a solicitor is now, by law, required to carry.
Solicitors should check the insurance cover of their delivery agents, whether An Post, document exchange or courier. The compensation available from An Post is limited. If an item is being sent by registered post, the solicitor can opt to register the item for a fee higher than the standard registration fee and this will ensure a higher level of compensation in the event of loss. However, if, for instance, a Land Certificate is lost, the full consequential loss, including professional fees incurred in replacing the Land Certificate, is unlikely to be recovered.
A solicitor sometimes decides to use a courier rather than An Post for an item because of the importance of the item. If the courier has no insurance, this may not in fact be a safe option.
Dishonesty
Under the Solicitors Acts, 1954 to 1994 solicitors are obliged to contribute to the Law Society Compensation Fund, which is available to recompense the clients of solicitors, in the event of a solicitor's dishonesty. Circumstances may arise where claims will be made on the fund arising out of an agent's dishonest acts, as opposed to a solicitor's dishonest acts.
If a claim is made on the Compensation Fund and paid, the amount paid is a debt due to the fund by the solicitor on whose behalf the payment is made. If that amount is not recouped from the solicitor, the Compensation Fund is then depleted by the amount paid and will require further funding by the profession. Therefore, solicitors should seek to ensure that the dishonest acts of their agents are covered by their agents, so that a client will not be obliged to seek to have recourse to the Law Society's Compensation Fund.
In accordance with the normal principles of insurance, cover is not available for principals of agents' firms, for their own dishonesty. Such cover is available only for their employees. Solicitors should satisfy themselves that their agents insure against their employees' dishonesty, and should be aware that the dishonesty of the principal, as opposed to the employee, is not covered.
- Operational and Review Systems
Solicitors should meet their agents and familiarise themselves with the systems which their agents operate. They should agree review systems with them. How are documents which are sent to the agent recorded by the agent? Is receipt acknowledged? Are regular updates given, explaining the reasons for delay? Can an inquiry about the status of a matter be dealt with immediately?
Solicitors should ensure that all the members of their firms who use agents familiarise themselves with the agents' systems.
Solicitors should put in place their own control systems. They should be aware of the turnaround times for routine tasks and diary these forward for review accordingly. The solicitor should have in place a system of effective steps which will be taken if there is a delay in a particular matter, the steps to be automatically triggered in the event of delay.
The relationship between a solicitor and an agent is a two-way affair.
As with any other business, prompt payment of accounts is important for the agent's cashflow. Solicitors should ask their agents how they, through their systems, can best assist the work of the agent.
Conclusion
It is hoped that the guidelines and the schedule of tasks commonly assigned to agents given in this note will assist all solicitors to carry out their own review of their use of legal and other agents.
There are risks in all situations and these cannot be excluded. However, as with every other area of a solicitor's practice, careful homework, good supervision and regular review will reduce the risk of disaster.
Legal agents do not have a compensation fund to compensate solicitors' clients who suffer loss because of the acts of dishonest legal agents.Some tasks could be done by the solicitor or his staff but the solicitor, for various reasons, opts to use an agent. An example would be where an agent is used to lodge and file documents with the Revenue or the various Registries, rather than the documents being posted directly to these bodies from the solicitor's office, particularly those solicitors practising outside Dublin.