- Solicitors’ certificates of independent advice in relation to loans and guarantees are prohibited under Practice Rule 11.
- Borrowers and guarantors can provide a declaration in the prescribed form that they have received independent advice.
- In areas other than loans and guarantees there are a number of things to consider when asked for evidence of independent legal advice.
Providing independent legal advice to clients is an everyday occurrence for most lawyers. The unique peril which arises is when a third party wants to rely on the solicitor’s advice in some way. Typically, they want evidence the client has received and understood the advice. It is important to be aware of the obligations that apply, particularly when the advice is given in relation to a loan or guarantee, but also in the context of other legal work.
Loans and guarantees
In New South Wales, Practice Rule 11 applies to loans and guarantees. It prohibits solicitors from providing evidence of their independent advice to the lender. Rather, the client signs a declaration that they received the advice. A few points to note about the rule: