The Law Society’s guidance on climate change: reducing or raising the risk of professional negligence claims?

Posted: 01/12/2023

In April 2023, the Law Society issued guidance for its members on incorporating climate change considerations into their practice ‘in a way which is compatible with their professional duties and the administration of justice’. More recently, on 13 October 2023, the Law Society supplemented this guidance with specific information for solicitors advising companies on climate risk governance and greenwashing risks.

The new guidance follows a number of initiatives launched by the legal sector earlier in the year. These include ‘Legal Charter 1.5’, a commitment from eight commercial law firms to a set of common principles to prevent global warming from rising above 1.5 degrees Celsius, one of which relates to the reduction of external emissions from clients. Earlier this year, more than 100 lawyers also signed a pledge refusing to act for companies supporting new fossil fuel projects, or to prosecute peaceful climate change protesters. Clearly, addressing the impact of climate change is rapidly becoming a key priority for legal practitioners.

The Law Society’s initial guidance (which is the focus of this article) has a broad scope. It aims to address how law firms, as well as in-house employers, should manage their business consistently with the transition to net zero. It also considers how climate change risks may be relevant to advice given to clients, solicitors’ professional duties and the solicitor/client relationship overall. While climate change has long been recognised as one of the major global risks to business, until now there has been a distinct lack of any express guidance on how that risk applies to law firms.

What is the impact of the guidance on solicitors’ professional duties?

The Law Society’s guidance suggests that firms should consider how they might be able to influence the reduction of scope 4 emissions (ie those associated with matters on which they advise) in line with their own climate change target setting. Such considerations might include:

• understanding the climate change related strategy, goals and transition plans of the firm’s clients to the same extent that they understand those clients’ commercial and financial position;
• advising clients of relevant climate legal risks and opportunities associated with the global transition to a net zero economy;
• assisting clients who wish to reduce their emissions and engage in transition planning; and
• considering whether it is consistent to accept instructions and to advise on certain matters that firms decide are incompatible with their own climate change commitments.

Four legal duties are identified in part B of the Law Society guidance as applying to solicitors when advising clients on the potential impact of climate change:

(i)             the duty of care;

(ii)            the duty to warn;

(iii)           the duty to disclose; and

(iv)           the duty to uphold service and competence levels.

The guidance highlights that because climate change risks may be relevant to many areas of business, a solicitor’s duty of care may increasingly require looking beyond the narrow scope of an instruction to consider whether, and to what extent, climate risks are relevant to their clients. Further, climate change may have an impact on a solicitor’s duty to warn clients of legal risks, which may in turn have a knock-on effect on retainers, training requirements and professional indemnity insurance.

The duty to disclose requires a solicitor to pass on to their client all information material to that matter of which they have actual knowledge. In the context of climate change, this means that if a solicitor becomes aware in the course of acting that there are climate change risks which might impact a client’s interests, they should disclose these risks to the client.

The duty to ensure a competent and timely service includes a requirement for solicitors to develop their understanding of how climate legal risks impact upon their practice area, and to be prepared to liaise with their client in relation to seeking specialist third party assistance where required.

Does the guidance open the door to professional negligence claims against solicitors?

In August 2022, Professor Sarah de Gay published an article on climate change and the rule of law, within which she raised the question of whether solicitors qualified in England and Wales can risk not advising their clients on climate-related risks. Her conclusion was ‘a definite and resounding no’.

The Law Society’s guidance appears, in part, to be intended to alert solicitors to the risk of professional negligence if they fail to understand and discharge these updated duties – across all areas of law.

The guidance states that: ‘A solicitor who does not have the relevant knowledge of the impact of climate change on the legal area they are advising on should not advise if it is outside their knowledge or competence.’ In the common course of accepting instructions solicitors may, by agreement with their clients, limit the terms of their retainer to reduce the scope of their duties. The guidance suggests, however, that – where climate legal risks are relevant – it is becoming less realistic in practice for solicitors to exclude consideration of such measures from their instruction completely, given their impact on so many areas of activity.

As training and awareness develop, an expectation may arise that a reasonably competent solicitor should be aware of the impact and relevance of climate change to their practice area and should be able to advise their clients accordingly. Additionally, following the case of SRA v Hayhurst, attempts by solicitors to limit or exclude duties to advise on climate change risks are likely to be looked at unfavourably by the SRA and risk a regulatory breach. As the Law Society guidance states: ‘This is not straightforward, requiring an explanation of the significance of the relevant issues [being excluded] to the client and the risks that you will not be advising upon, overlapping with the residual duty to warn the client of these issues and that they will need to obtain specialist advice.’

In response to these broadening expectations, law firms/solicitors may consider the following steps:

• updating (and undertaking regular) training on the impact of climate change on specific practice areas; and
• updating standard form retainer letters.

Conclusion

The Law Society’s guidance on climate change is an important indication to the legal industry of how high up the public agenda the issue has now risen, as well as being a reflection of how professional standards are shaped by changing public attitudes. ClientEarth lawyer Robert Clarke recently stated the following: ‘The Law can be a powerful tool to address climate change and the risks that come with it. Lawyers and firms must engage meaningfully with this crucial issue for the profession, using this guidance as a starting point to consider their professional and regulatory obligations.’

Climate change is set to be an increasingly thorny issue for legal practitioners. Clearly, striking the appropriate balance between providing holistic advice whilst avoiding straying into areas in which practitioners have insufficient expertise will be key. Despite the challenges, this represents a significant opportunity for members of the legal industry to work together in the pursuit of transformational change.

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