Exclusive: The Bar Council of India (BCI) has requested comments on the new draft code of ethics for advocates, which introduces rules on conflicts of interests, bans conditional fee arrangements (CFAs) and continues to restrict advertising and business interests of lawyers.

BCI chairman and solicitor general Gopal Subramanium said that comments on the draft would be preferred within a week to the officiating secretary or the BCI’s director of legal education ().

He added that the sanctions for non-compliance with the ethics rules were currently being finalised. “We’ll have to design the effects of non-compliance rules separately - that’s presently under preparation,” Subramanium told Legally India. In February he said that he hoped for the rules to come into effect by the end of the year.

The new draft ethics rules were published yesterday on the BCI website and begin with the words: “India today, is at the threshold of great change. As markets open up around the globe and new businesses make a foray into the country, India’s 1.2 million strong legal community is faced with a new set of challenges thrown up by globalization.”

Parts of the code apply to both court and some transactional practice, with the word “Brief” expressly including “transactional and non-litigation work … handled by a lawyer or a firm of lawyers”.

Conflict of interest rules

Unlike many other jurisdictions, India currently has no express conflict rules governing lawyers acting for multiple clients whose conflicting interests may bring the lawyer into a situation where he or she can not act in the best interest of either client individually.

Sections 38-48 of the draft code delineates conflict rules for advocates, banning lawyers acting for two or more conflicted parties unless they have the express permission. Notably:

“39. An advocate shall not advise or represent both sides of a dispute and, except after adequate disclosure to and with the consent of the clients, preferably after receiving an independent legal advice, shall not act or continue to act in a matter when there is a conflicting interest, which gives rise to substantial risk that the advocate’s representation of the client would be materially and adversely affected by the advocate’s duties to another current client, a former client, or a third person including, but not limited to, the duties and loyalties of the advocate or a partner or professional associate of the advocate of the law firm in which such advocate is a partner or associate, to another client, whether involved in the particular matter or not, including the obligation to communicate information.

40. Before the advocate accepts a brief from more than one client in the same matter, the advocate must advise the clients that the advocate or a partner or professional associate of the advocate has been asked to act for both or all of them, that no information received in connection with the matter from one can be treated as confidential so far as any of the others is concerned and that, if a dispute develops that cannot be resolved, the advocate cannot continue to act for both or all of them with respect to the matter and may have to withdraw completely.

41. Where a advocate or a partner or professional associate of the advocate has a continuing relationship with a client for whom the advocate or a partner or professional associate of the advocate in the law firm in which such advocate is a partner or associate acts regularly, before the advocate accepts joint briefs for that client and another client in a matter or transaction, the advocate must advise the other client of the continuing relationship and recommend that the other client obtain independent legal advice about the joint retainer. If, following such disclosure, all parties are content that the advocate act for them, the advocate should obtain their consent, preferably in writing, or record their consent in a separate letter to each. The advocate should, however, guard against acting for more than one client where, despite the fact that all parties concerned consent, it is reasonably obvious that a contentious issue may arise between them or that their interests, rights or obligations will diverge as the matter progresses.

42. If a contentious issue arises between clients on a joint retainer, the advocate, although not necessarily precluded from advising them on other non-contentious matters, would be in breach of this Code if the advocate attempted to advise them on the contentious issue. In such circumstances the advocate should ordinarily refer the clients to other advocates. However, if the issue is one that involves little or no legal advice, for example, a business rather than a legal question in a proposed business transaction, and the clients are sophisticated, they may be permitted to settle the issue by direct negotiation in which the advocate does not participate.

43. An advocate may only act in a matter which is adverse to the interests of a current client provided that:

(a) the matter is unrelated to any matter in which the advocate is acting for the current client; and

(b) no conflicting interest is present

44. Where an advocate has acted for a former client and, in that context, has obtained confidential information relevant to a new matter, the advocate’s partner or associate of the law firm in which such advocate is a partner or associate may act in the new matter against the former client if

(a) the former client consents to the advocate’s partner or associate acting, or

(b) the new matter does not involve attacking the prior legal work or, in effect, changing sides on a central aspect of the prior legal work and the law firm establishes that it is in the interests of justice that it act in the new matter, having regard to all relevant circumstances, including

(i) the adequacy and timing of the measures taken to ensure that no disclosure of the former client’s confidential information to the partner or associate having carriage of the new matter will occur,

(ii) the extent of prejudice to any party,

(iii) the good faith of the parties,

(iv) the availability of suitable alternative counsel, and

(v) issues affecting the public interest.

45. An advocate may act against a former client in a fresh and independent matter wholly unrelated to any work the advocate has previously done for that person. An advocate may advise, represent or take a position for or against a particular issue for another client where the immediate interests of the former client are not directly and adversely affected by the advocate’s representation of another client. However, if the reputation of the former client is in question, and/or mala fides are alleged against him, and the same would conflict with the position taken by the advocate in the previous proceeding, the advocate shall:

(a) Divulge such fact to the present client, and offer not to press issues on that point; or

(b) Decline to accept the present engagement entirely;”

Updated advertising rules

Under section 63, the updated rules do not extend the current limitations on law firms’ websites and clarify what types of public relations activities are permitted by a law firm, while carving out media activity “warranted by personal relations”:

62. An Advocate shall not solicit work or advertise, except through a medium maintained by the Bar Council of India, either directly or indirectly, whether by circulars, advertisements, touts, personal communications, interviews not warranted by personal relations, furnishing or inspiring newspaper comments or producing his/her photographs to be published in connection with cases in which he/she has been engaged or concerned. His/her sign-board or name-plate should be of a reasonable size. The sign-board or name-plate or stationery should not indicate that he/she is or has been a President or Member of a Bar Council or of any Association or that he/she has been associated with any person or organisation or with any particular cause or matter or that he/she specialises in any particular type of work or that he/she has been a Judge or an Advocate General.

Soliciting work or advertise” as used in this clause of the Code would not mean and include setting up of a web-site by an advocate or a law firm giving only basic information about the names and number of lawyers in a law firm, the contact details and areas of practice. This would apply similarly to lawyers’ brochures and law directories.

Moonlighting

Under section 66, it would be “improper for an advocate to demand or accept fees or any premium from any person as a consideration for imparting training in law under the rules prescribed by State Bar Council to enable such person to qualify for enrolment under the Advocates Act, 1961”. However, advocates would be allowed for remuneration to “review Parliamentary Bills, edit legal text books at a salary, do press-vetting for newspapers, coach pupils for legal examination, set and examine question papers; and subject to the rules against advertising and full-time employment, engage in broadcasting, journalism, lecturing and teaching subjects, both legal and non-legal” and would be allowed to take up part-time employment if permitted by the State Bar Council and if it “does not conflict with his/her professional work and is not inconsistent with the dignity of the profession.”

Under section 68 the rules allow lawyers to be sleeping partners in businesses other than law, to hold non-executive directorships of companies but keeps up the prohibitions on enrolled advocates being employees.

Duty to render Legal Aid

The draft rules stop short of making legal aid obligatory but put a duty to “bear in mind” the principle.

“67. Every advocate shall in the practice of the profession of law bear in mind that any one genuinely in need of a lawyer is entitled to legal assistance even though he/she cannot pay for it fully or adequately and that within the limits of an Advocate’s economic condition, free legal assistance to the indigent and oppressed is one of the highest obligations an advocate owes to society.”

Conditional fee arrangements (CFAs)

The draft rules ban CFAs, also known as no-win-no-fee arrangements, which have become popular in the US, UK and other jurisdictions as a way of making litigation less risky and more affordable although they have been criticised as encouraging “ambulance chasing”.

“3. An advocate shall not stipulate for a fee contingent on the results of litigation or agree to share the proceeds thereof.”

Charging “improper” fees and court conduct

9. It shall be improper for an advocate to charge an additional fee to ensure his/her presence in a matter, once he/she has accepted a brief.

10. In a case where an Advocate after obtaining fee in advance is unable to appear in Court at the time of hearing of the case, the Advocate shall forthwith refund the entire fee, so obtained, to the client.

14. An advocate shall, during the presentation of his/her case, and while otherwise acting before a court, address only the Court at all times. He/she shall refrain from making any statements to the opposite party or interrupting the opposite party when it is not his/her chance to address the Court. An interjection may be made only to respond to a question posed by the Court.

24. It shall be the duty of an advocate to fearlessly uphold the interests of his/her client by all fair and honourable means without regard to any unpleasant consequences to himself or any other. He/she shall defend a person accused of a crime regardless of his/her personal opinion as to the guilt of the accused; bearing in mind that his/her loyalty is to the law which requires that no man should be convicted without adequate evidence.

28. An advocate must regularly and promptly update the client on the developments in his/her case, as often as possible, and definitely after every hearing in the matter.

29. In civil matters, the advocate may, as far as possible, suggest to the client the option of mediation or arbitration as methods of resolving disputes, as an alternative to initiating court proceedings.