The SRA first issued its guidance on client care letters on 23 July 2019 in advance of the new SRA Rules on 25 November 2019.
The guidance comes amid the regulator’s concerns that some firms’ client care letters are drafted to meet regulatory obligations rather than giving the client useful and memorable information.
“This means that many can be:
- Complicated, with legalistic language, terms and phrasing
- Too lengthy, with dense paragraphs and small font sizes, which makes finding key information difficult for clients
- Focused on generic information, such as terms and conditions, rather than specifics relevant to that client
- Unclear as to the purpose of the client care letter and any action that the client needs to take.”
The SRA says that client care letters should be “easy to understand”. This stems from the Codes of Conduct requirements to:
- give clients information in a way they can understand, and
- ensure the service…takes account of your client’s attributes, needs and circumstances.
The guidance note provides a checklist under the following headings (details not fully repeated here):
- Do you explain what is going to happen?
- Do you include how much the work is going to cost?
- Do you explain when things are going to happen?
- Do you explain what the client needs to do?
- Do you include contact details?
- Does your letter show a clear purpose?
- Is your letter concise?
- Do you use plain English?
- Do you prioritise information?
- Do you personalise information?
- Is your client care letter easy to read?
- Do you highlight key information?
- Have you considered the needs of vulnerable clients?
What must you include?
There are some, but not many, definitive information requirements under the Codes of Conduct i.e.:
- Information about your regulatory status and how that affects the protections available to the client
- Costs information, including the likely overall cost of the matter
- Instructions about how to complain
- An explanation of your duties to the Court
- Where relevant, information about referrals, introductions, fee sharing and any separate businesses that might have a commercial interest in the client’s matter
This is not to forget other requirements under separate powers, but which is outside the scope of this note, including:
- Provision of Service Regulations 2009
- Data Protection legislation
- Financial crime legislation
Information must be given in a way that the client can understand. That does not necessarily mean a client care letter is the best delivery medium in all cases. A meeting, telephone call, or perhaps even a recorded video might be better suited to the client’s circumstances.
Generic information that is common to all clients is often better delivered in a separate document. It is standard practice to send out terms of business with client care letters. This helps to keep the client care letter focused on the information that is important to the individual client in front of you.
It is equally valid to direct clients to terms of business on your website. But do remember, that terms of business must also be accessible and easy to understand. It is not the ‘small print’, and we must not forget that some people do not have ready access to the Internet. You should also consider whether vulnerable clients need additional help to ensure they understand the information in your documents.
The SRA Guidance is a significant departure from the regulator’s default position of relying on firms to decide what compliance looks like.
What is abundantly clear is that the SRA expects the client care letter to be crafted to the individual, not cut-and-paste or auto-generated with generic information.
But what is the status of the guidance? It is clearly not mandatory, because it sits outside of the rulebook, and is therefore not subject to consultation. It can be updated or removed at the whim of the SRA.
However, it would be a brave firm that actively goes against the regulator’s expectations. Note the ominous warning that “we may have regard to [this guidance] when exercising our regulatory functions”, which gives it a strange quasi-official status.
For an in-depth analysis of the full client care information requirements applicable, see the Law Society Practice Note ‘Client information requirements’ of 22 November 2019.