5. PCR in PLP

Question 1

OUTLINE FOR ALL PCR ISSUE Qs

Answer 1

1. WHAT IS THE PCR ISSUE
2. WHY IS IT AN ISSUE ON THESE FACTS?
3. ADVICE AND ACTION

Question 2

THIRD PARTY INSTRUCTIONS

Answer 2

P(4) – best interests
O(1.2) – protect client interests
IB(1.25) – seek authority

advice: obtain confirmation that other client can speak on its behalf (written record = best practice)

Question 3

CONFIDENTIALITY AND DISCLOSURE

Answer 3

P(4) – best interests
O(4.1) – keep affairs confidential
O(4.2) – disclose all information material to retainer
O(4.3) – confidentiality overrides disclosure

advice - stop acting for one of them (BUT there might be mortgage fraud issues)

Question 4

MORTGAGE FRAUD

Answer 4

p(2) - integrity

• if new solicitors ask Q as to why you stopped acting for them
• evasive or lying = serious danger of breaching P(2)

p(1) - uphold rule of law
- even if new solicitors don’t ask searching questions, you run risk of aiding and abetting mortgage fraud

advice - stop acting for borrowers unless they permit disclosure

Question 5

FSMA 2000

Answer 5

NB. LET EXAMINER KNOW U KNOW DEFINITIONS ARE IN RAO NOT FSMA

s. 19(1) FSMA - breach is criminal offence
s. 22(1) - specified investment + specified activity = regulated activity

specified investment = PART III RAO (incl. mortgage contract s.88, s.61(3))

specified activity = Part II RAO, art.53

advice:
- advising NOT allowed (e.g. type of mortgage, merits of one over another),

• but generic advice is fine (advising on terms after they’ve already decided on mortgage)

Question 6

CLIENT CONFLICT

Answer 6

P(4) – best interests
O(3.5) – can’t act for B and S if client conflict

Indicators showing O(3.5) might not be fulfilled: IB(3.14), IB(3.3)

advice:

• is there client conflict (consider IB 3.14, 3.3, 3.7)
• do exceptions apply
• O(3.6) not apply if IB (says its about O(3.6))
• O(3.7) only if tender/auction process (‘same objective’)

NB. Common purpose to get deal done is not substantially common interest (SCI = conflict must be peripheral, which it isn’t if negotiations must be done)

Question 7

acting for borrower and lender exam structure

Answer 7

1. O(3.5)
2. GLOSSERY (define client conflict)
3. acting for L/B - can you act for L/B too while still achieving O(3.5) and p(4)?
4. issue on the facts - why?
5. O(3.5) met? IB guidance - 3.7, 3.3 applicable?
6. exceptions apply?

Question 8

acting for buyer and seller structure

Answer 8

1. O(3.5) duty to avoid client conflict unless O(3.6) O(3.7) applies
2. glossery - define client conflict
3. does o(3.5) apply? (IB(3.14), (3.3)
4. Exceptions apply? (O(3.6)) - CONSIDER IB 3.5, 3.11, 3.12
5. does O(3.7) apply? probs not - only for tender or auction process

Question 9

MONEY LAUNDERING (MLR 2017) - DOES IT APPLY

Answer 9

reg.27 MLR - relevant purpose carry out CDD

define terms in reg.27 (8 and 12)

business relationship or occasional transaction

if applies - apply CDD

Question 10

when is mortgage not standard

Answer 10

• lender is individual

- terms need to be negotiated (not standard)

Question 11

when would it not be in client’s best interest to act for both lender and borrower?

Answer 11

Where firm does a lot of work for lender and doesn’t want to lose it as a client

So it agrees deal which is not in borrower’s best interest

Question 12

when would it not be reasonable to act for both lender and borrower?

Answer 12

Where firm does a lot of work for lender and doesn’t want to lose it as a client

So it agrees deal which is not in borrower’s best interest

Question 13

when would you not be using certificate of title in “approved” form?

Answer 13

when lender insists you include information not in the remit of the certificate of title

e.g. B’s creditworthiness