Client-facing outputs and risk - Client-care letter: scope, ...

Learning Outcomes

After reading this article, you will be able to identify and explain the required contents and drafting principles for client-care letters, including how to define instructions/scope, address costs and risk, and outline next steps. You will understand compliance requirements, communication expectations, and risk management for client-facing written outputs. You will be equipped to apply these principles to SQE2 exam tasks involving provision of a client-care letter or advice on related practice scenarios.

SQE2 Syllabus

For SQE2, you are required to understand the core requirements and best practice for producing effective client-care letters. Particular focus is placed on demonstrating the ability to:

• Identify the mandatory elements in a client-care letter, including clear explanation of services, scope, costs, and next steps.
• Communicate key risks and client responsibilities in a concise, client-friendly manner.
• Address issues related to costs estimates, methods of funding, and risk of adverse costs.
• Reference regulatory requirements on costs, complaints, and retainer information.
• Advise on next steps and responsibilities for both solicitor and client.

You should ensure your revision covers:

• What a client-care letter must contain and why.
• The importance of costs information, including funding and risk.
• How to explain the scope of instructions and manage risk effectively.
• What makes an effective, compliant client-care letter for SQE2 purposes.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. What are the minimum required elements that must appear in a client-care letter provided to a new client?
2. How should a solicitor communicate the risk of adverse costs in client-care correspondence?
3. List three types of information that must be given to a client regarding costs.
4. True or false: A client-care letter must always specify the person responsible for handling the case and for overall supervision.

Introduction

When you act for a client, you are required to give clear written information at the outset, typically in a client-care letter. This document protects both the client and the firm. For SQE2, you must show you understand both the regulatory requirements and professional best practice for the content, structure, and communication style of such letters.

Delivering an effective client-care letter is not merely about compliance; failures can expose clients to confusion, risk, or complaint. Clear, accessible drafting avoids liability, sets expectations, and underpins the legal relationship.

Key Term: client-care letter
A written communication from solicitor to client, provided at the outset of an instruction, that sets out what the solicitor will do, how much it will cost, client rights, and other tenure information.

The Purpose and Scope of the Client-Care Letter

Almost every instruction requires solicitors to provide a formal written client-care letter. It must specify:

• the scope of instructions (what the firm is being asked to do, and any excluded tasks),
• the person with conduct of the matter and overall supervision,
• costs information,
• risks (including cost risk),
• complaints procedure, and
• next steps (including client responsibilities).

Key Term: scope of instructions
The precise activities, advice, and tasks the solicitor agrees to carry out for the client, as stated in the client-care letter. Clearly setting out what is included or excluded helps avoid later misunderstanding.

Worked Example 1.1

A client, Mrs Green, instructs you to deal only with the transfer of a property. She will handle negotiations about contents herself. What should you say about the scope of your retainer in your client-care letter?

Answer:
Your client-care letter should explicitly state that you are instructed solely for the legal transfer of the property and will not conduct or advise on negotiations regarding fixtures or fittings.

Explaining Costs and Risk in the Client-Care Letter

Regulatory requirements are strict. The SRA Code of Conduct requires clients receive the "best possible information" about the likely pricing of their matter both at the time of engagement and as the matter progresses.

This means you must give:

• the basis of charges (hourly rate, fixed fee, capped fee, or contingency),
• an initial costs estimate,
• information about third-party expenses (disbursements or taxes, such as SDLT or Land Registry fees),
• risks relating to costs (including, if relevant, risk of paying another party’s costs).

You must also explain methods of funding and any risks of not being able to recover your own costs.

Key Term: costs estimate
Your current, best assessment of the total costs and disbursements likely to be incurred by the client, based on the information currently available.

Key Term: funding arrangement
The agreed method by which the retainer will be paid: commonly private payment, legal aid, or other third-party funding. The arrangement must be explained in writing.

Key Term: disbursement
Expenses paid to a third party on the client's behalf (e.g., court fees or expert fees), recoverable in addition to professional fees.

Worked Example 1.2

You give a client an initial estimate of £4,000 plus VAT and disbursements. During the matter, things become more complicated. What must you do regarding costs information?

Answer:
You must update your client-care letter and notify the client in writing if the estimate changes, providing updated costs and an explanation for the revision.

Exam Warning

If a client-care letter fails to explain adverse cost risk (such as the chance the client may pay another party's costs) or omits costs estimates, this is reportable as a breach and can undermine any attempt to recover fees later.

Regulatory and Complaint Information

Compliance with SRA requirements means you must provide the following:

• Details of how the firm is regulated and by whom,
• Instructions on how to complain, including to the Legal Ombudsman,
• Time limits for complaining,
• Confirmation that the client can challenge costs and seek an assessment under the Solicitors Act 1974.

Omitting this information is a common error seen in the SQE2 exam and can lead to a complaint or professional discipline.

The Importance of Next Steps

At the end of every client-care letter, outline the next steps—this clarifies who must do what, and by when.

Include:

• Steps the firm will now undertake (e.g., request for ID documents, draft contracts),
• Actions required from the client (e.g., provide specific information or documents),
• Timings for next update or contact,
• Any deadlines or key dates.

Worked Example 1.3

Instructed by a new client on a business purchase, you require further documentation before you can proceed. How do you reflect this in your client-care letter?

Answer:
State clearly the client must supply the particular documents (e.g., company accounts) before the firm can commence substantive work, and give any relevant deadlines.

Communicating Risk to the Client

A good client-care letter sets out the risks to the client—especially financial and procedural risks. This could include the possibility of:

• Incurring additional costs if matters become more complex,
• Adverse costs orders in contentious matters,
• Delays if the client or third parties fail to act,
• Limitation risks.

Clients may not appreciate these potential pitfalls unless you say so simply and directly.

Revision Tip

In your exam answer, always include simple, client-friendly wording about cost and risk, and confirm how the client can seek clarification.

Drafting Style for Client-Care Letters

Keep the letter concise, free from jargon, and readable by a non-lawyer. Use short sentences and avoid technical terms without explanation. If standard terms of business or further information are provided separately, refer to this clearly in the letter.

Summary

Key Point Checklist

This article has covered the following key knowledge points:

• The mandatory contents and professional function of the client-care letter.
• The need to specify and limit scope of instructions to avoid future dispute.
• Regulatory requirements for costs information, risk, and complaints.
• Direct and clear explanation of next steps to ensure effective client output.
• Importance of accessible language for client understanding.

Key Terms and Concepts

• client-care letter
• scope of instructions
• costs estimate
• funding arrangement
• disbursement