The Regulations state, “You are honest and open with clients if things go wrong, and if a client suffers loss or harm as a result you put matters right (if possible) and explain fully and promptly what has happened and the likely impact” (7.11 – Code for Solicitors/3.5 – Code for Firms).
The SRA has said that firms will still not be able to act in such cases due to having a self-interest conflict unless the act/omission can be rectified quickly and easily, for example, if an omission is related to the non-payment of a fee to HMLR and the only thing that is needed to rectify the matter is payment, then payment by the firm would be acceptable.
The current guidance is that the firm should consider not continuing to act where it would need to undertake more in-depth work to rectify a matter and/or require input by PII insurers on the strategy to be taken. We are expecting further guidance/case studies to be released from the SRA on this issue in due course, so it is very much a case of watch this space.
This is obviously an area for concern by firms and rightly so given the current uncertainty and the stakes being high where a firm is deemed to have acted inappropriately (the firm was fined £5,000 and ordered to pay more than £26,000 in costs in the Howell Jones case).
Since writing this article the SRA has issued guidance on this topic and you should refer to this before deciding how to proceed - https://www.sra.org.uk/solicitors/guidance/ethics-guidance/putting-matters-right-when-things-go-wrong-and-own-interest-conflicts/