There is no reason why a self-employed barrister should not receive instructions from a recognized body in which he has an ownership interest or need for tax services. The only issue is accordingly one of informed consent from the client to the barrister’s acting for him. Regardless of the size of the barrister’s interest in the LDP, the existence of that interest must be disclosed to the client in writing before the instructions are accepted, and the client must be advised of his right to instruct another barrister to act for him. If the barrister’s interest in the LDP is acquired after he is first instructed by the client, disclosure in the same terms should be made in writing as soon as reasonably practicable after the interest is acquired.
Where a barrister has an ownership interest in an LDP, there is nothing to prevent a barrister from referring a client to that LDP, provided of course that the barrister is acting in what he reasonably considers to be the best interests of the client in doing so, that full disclosure of his interest is made, and that no referral fee is paid to him by the firm or any intermediary for the referral. Similarly, the LDP might properly refer the client to the barrister, subject to the same restrictions. If the barrister is not an employee or manager of the body, there is no scope for confusion as to the capacity in which the barrister is acting for the client. Such referrals should, however, be approached with a degree of caution, as the possibility exists for the referring party to be unduly influenced by his interests, and for complaints to be made at a later time unless the referral was scrupulously fair and transparent.
The barrister is also required to keep a record of all cases in which he made or received a referral to or from the LDP, and of instructions received from the LDP. The records should be kept for a minimum of 6 years from each referral (209 (c)).
In order to ensure that the client is making a properly informed choice as to what is in his best interests, the barrister is therefore required to disclose to the client in writing, before making or accepting the referral, as the case may be, the nature and extent of his interest in the LDP, and to advise the client of his right to instruct another barrister or retain another firm of his choice to act for or represent him. The referral should only proceed if the barrister is satisfied that the client fully understands and is able to make his choice freely.
Particular attention is drawn to the fact that the Board intends to review the rules and guidance for ownership interests in the light of experience at the expiry of 2 years from the implementation of the rule changes. The Board will wish to be assured that greater problems than envisaged have not arisen, that the safeguards are working and can be monitored satisfactorily, and that the regulatory objectives continue to be advanced by allowing such ownership.
