- Solicitors must be conscious of the difference between financial and legal advice and know when to advise a client of the need to obtain independent financial advice.
- It is important to record file notes of any advice, and for more unusual risks, to confirm that advice in writing to the client.
Most solicitors will know the rule in Citicorp Ltd v O’Brien (1996) 40 NSWLR 398 without any real need to refer to Riley’s. This is because the rule in Citicorp has been woven into the fabric of legal training and practice in Australia since 1996.
When a client proposes to enter into a transaction, his or her solicitor should refer to the Citicorp case as the conduct standard, and advise the client that:
- the financial aspects of a transaction are not a matter in respect of which the solicitor can advise; and
- the client should obtain independent financial advice as to the merits of the transaction.*
The New South Wales Court of Appeal came to reconsider Citicorp again in Dominic v Riz  NSWCA 216, at  after a trial judge had suggested:
‘… it is often difficult… to disentangle legal and business or practical analysis, and a solicitor who is carrying out a transaction for a client is not justified in expressing no opinion when it is plain that the client is rushing into an unwise, not to say disastrous, adventure’.
The Court of Appeal in Riz rejected that finding and reinforced the Citicorp rule:
‘If, however, the solicitor during the execution of his or her retainer learns of facts which put him or her on notice that the client’s interests are endangered or at risk unless further steps beyond the limits of the retainer are carried out, depending on the circumstances, the solicitor may be obliged to… bring to the attention of the client the aspect of concern and to advise of the need for further advice either from the solicitor or a third party…’ (at ).