6. Business Requirements Flashcards
Referrals and Introductions
What three situations would be governed by the standards concerning referrals and introductions?
- You refer a client to a third party
- A third party refers a client to you
- You share your fees with a third party
Referrals and Introductions
What interests must a client be informed of when there is a referral?
Any financial or other personal interest you have in a referral
Referrals and Introductions
What are two requirements of fee sharing arrangements with third parties?
- Must be in writing
- Clients must be informed of any relevant fee sharing arrangement
Prohibited Referral Fees
Are referrals allowed with regard to clients who are criminal defendants?
No
Prohibited Referral Fees
What are two other types of cases in which the payment of referral fees is prohibited?
- Personal injury
- Death
(this includes ancillary claims in addition to the main claim)
Prohibited Referral Fees
What presumption does the SRA apply when it appears a prohibited referral fee has been paid?
The payment is presumed to be prohibited unless you demonstrate otherwise
Separate Businesses
What is a separate business?
A business you are connected with, and which is not an authorised body, an authorised non-SRA firm, or overseas practice
Separate Businesses
What actions with a separate business require a client’s informed consent?
- Referring, recommending, or introducing the client
- Dividing a client’s matter between you and a separate business
Other Business Requirements for Solicitors
What is the prohibition concerning businesses with the word solicitors in their name?
You must not be a manager, employee, member or interest holder in a business with the word solicitors in the name or which describes its work in a way which suggests it is a solicitor’s firm, unless it is authorised by the SRA
Other Business Requirements for Solicitors
What is required of a solicitor carrying out any reserved legal activities in a non-commercial body?
You must ensure that the body maintains indemnity insurance
Other Business Requirements for Solicitors
Where a solicitor is carrying out reserved legal activities in a non-commercial body, what is the required scope of the insurance?
Adequate and appropriate cover in respect of all services (even those which are not reserved legal activities and would otherwise not require insurance but for the reserved legal activities)
Other Business Requirements for Solicitors
Under the Legal Services Act 2007, what are six things considered to be reserved legal activities?
- Exercising right of audience
- Conducting litigation
- Preparing instruments relating to real or personal property
- Preparing probate papers
- Notary services
- Administration of oaths
Other Business Requirements for Firms
What is the standard a firm must maintain in monitoring its business affairs?
A firm must actively monitor its
1. financial stability
2. business viability, as well as
3. all material risks to the business
Other Business Requirements for Firms
Who is responsible for a firm’s compliance with the Code of Conduct?
The manager of the SRA-authorised firm
Other Business Requirements for Firms
If there are multiple managers in a firm, how is their responsibility split?
It is joint and several
