Ethics and Professional Conduct

Question 1

what do the SRA Principles comprise of?

Answer 1

the fundamental tenets of ethical behaviour that we expect all those that we regulate to uphold

Question 2

who the SRA Principles apply to?

Answer 2

all individuals we authorise to provide legal services (solicitors, Registered European Lawyers/RELs and Registered Foreign Lawyers/RFLs), as well as authorised firms and their managers and employees.

For licensed bodies (non-UK-lawyer ownership/management e.g. alternative business service provider), these apply to those individuals, and the part of the body (where applicable), involved in delivering the services we regulate in accordance with the terms of your licence

Question 3

should the Principles come into conflict, which should take precedence?

Answer 3

those which safeguard the wider public interest (such as the rule of law, and public confidence in a trustworthy solicitors’ profession and a safe and effective market for regulated legal services) take precedence over an individual client’s interests

where your duty to the Court or other professional obligations outweigh your duty to the Client, you should tell them (where appropriate)

Question 4

list the SRA Principles…

Answer 4

You act:

1. in a way that upholds the constitutional principle of the rule of law, and the proper administration of justice.
2. in a way that upholds public trust and confidence in the solicitors’ profession and in legal services provided by authorised persons.
3. with independence.
4. with honesty.
5. with integrity.
6. in a way that encourages equality, diversity and inclusion.
7. in the best interests of each client.

Question 5

what does the SRA Code of Conduct contain?

Answer 5

Code of Conduct for Solicitors and the Code of Conduct for Firms = SRA Code of Conduct

Question 6

what duties to firms/solicitors have regarding complaints?

Answer 6

they must have a complaints procedure

solicitors must ensure the client is informed of at the time of engagement:

(a) their right to complain about the solicitor’s services and charges;
(b) how complaints may be made and to whom; and
(c) any right they have to make a complaint to the Legal Ombudsman and when they can make such complaint.

Question 7

when a client makes a complaint, and it has not been resolved to their satisfaction within 8 weeks, what must a solicitor do?

Answer 7

the solicitor must ensure the client is informed in writing:

(a) of any right they have to complain to the Legal Ombudsman, the timeframe for doing so and full details of how to contact the Legal Ombudsman; and

(b) if a complaint has been brought and the complaints procedure has been exhausted:

(i) that the solicitor cannot settle the complaint;
(ii) the name and website address of an alternative dispute resolution (ADR) approved body (can be found via the The
Chartered Trading Standards Institute) which would be competent to deal with the complaint; and
(iii) whether the solicitor agrees to use the scheme operated by that body

Question 8

how must a client complaint be dealt with?

Answer 8

promptly, fairly and free of charge

Question 9

does a client have to have suffered loss for the Legal Ombudsman to make a determination against the solicitor

Answer 9

no

Question 10

can a complainant use the Legal Ombudsman service if they have not gone through the solicitor’s own complaints procedure?

Answer 10

no, not usually

can go straight to the LeO if:

(a) the complaint has not been resolved to the complainant’s satisfaction within eight weeks of being made to the solicitor; or

(b) the LeO considers that there are exceptional reasons to consider the complaint sooner, or without it having been made first to the solicitor; or

(c) the LeO considers that in-house resolution is not possible due to irretrievable breakdown in the relationship between the solicitor and the complainant.

The complaint should be brought no later than:
* one year from the act/omission; or
* one year from when the complainant should reasonably have known there was cause for complaint.

LeO has a discretion to extend the time limits to the extent it considers fair

Question 11

what is the LeO’s process in resolving a complaint?

Answer 11

it can do so in whichever way it feels appropriate, including informal resolution

it can decide an investigation is necessary - both parties will be given an opportunity to make representations

A hearing will be held only where the LeO considers that the complaint cannot be determined fairly without one.

A ‘determination’ will then be made and sent to the parties and the SRA (as the approved regulator), with a time-limit for response by the complainant.

the complainant then accepts/rejects/fails to respond to the determination

if accepted = binding and final + can be enforced by the complainant through the high court and county court

if rejected = both parties remain free to pursue other legal remedies (such as suing for negligence).

if the resolution of a complaint involves a legal question, it may refer the matter to the court

if professional misconduct found - may refer to SRA

Question 12

what may a ‘determination’ direct a firm/solicitor to do following a complaint?

are there any limits on the determination?

Answer 12

(a) apologise;
(b) pay compensation (together with interest) for any loss suffered and/or inconvenience/ distress caused;
(c) ensure (and pay for) the putting right of any error or omission;
(d) take (and pay for) any specified action in the interests of the complainant;
(e) pay a specified amount for the costs of the complainant in pursuing the complaint;
(f) limit the solicitor’s fees (including requiring that all or part of any amount paid is refunded, with or without interest, or that all or part of the fees are remitted).

There is a limit of £50,000 on the total value that may be awarded in respect of compensation and the costs in
respect of (c) and (d) above.

The limit does not apply to (a), (e) or (f) above, or to interest on compensation for loss suffered.

Question 13

what does the SRA base its decision to or not to investigate on?

Answer 13

three step Assessment Threshold Test:
(1) has there been a potential breach of the SRA Standards and Regulations based on the allegations made;
(2) is that potential breach sufficiently serious that, if proved, is capable of regulatory action;
(3) is the breach capable of proof?

Question 14

what is the SRA procedure in investigating potential misconduct?

Answer 14

if the SRA decide to investigate, they will notify the solicitor and their employer (if necessary)

Notice will be given to that individual or firm setting out the
allegation and facts in support and other relevant information and inviting them to respond with written recommendations within a specified time period.

Question 15

what powers does the SRA have in conducting an investigation into potential misconduct?

Answer 15

to serve a notice on a solicitor requiring the delivery of a file or documents

the solicitor must respond promptly and provide any docs requested

Question 16

what sanctions may the SRA impose following a finding of misconduct

Answer 16

the SRA’s approach is set out in the SRA Enforcement Strategy:
(a) Take no further action with or without issuing advice or a warning about future conduct
(b) Impose a financial penalty or written rebuke
(c) Control how the solicitor practises
(d) Refer the matter to the Solicitors Disciplinary Tribunal

Question 17

what is the max financial penalty the SRA can impose following a finding of professional misconduct?

Answer 17

£25,000

Question 18

what are the financial penalties the SRA may impose against a firm for a finding of professional misconduct for specific breaches

Answer 18

The SRA introduced a fixed penalty scheme for specified breaches by firms, eg a failure to provide
information or documents to the SRA when requested.

Under the scheme the penalty is £750 for a first breach and £1,500 for a continuation of that breach or a subsequent
breach of the same kind.

Question 19

who can make an application to the SDT?

Answer 19

the vast majority of applications are made by the SRA - when the SRA is satisfied that there is a realistic prospect of the SDT making an order in respect of the allegation and it is in the public interest to make the application

any person may make an application directly to the SDT without first making a complaint to the SRA (except where
the Solicitors Act 1974 expressly provides otherwise)

Question 20

what is the procedure of the SDT?

Answer 20

The SDT does not have powers of investigation nor will it collect evidence itself.

An application to the SDT must be made in the prescribed form, supported by evidence (this will be prepared by the panel solicitor, or the SRA’s advocate where the applicant is the SRA).

The SDT will consider the application and, if satisfied that there is a case to answer, will fix a hearing date.

Either party may be represented at the hearing by a solicitor or counsel.

Evidence is given on oath and witnesses may be called.

the SDT makes an order (judgment) which takes
effect once it is filed with the Law Society

Where (unusually) an application is made directly to the SDT, the SDT may refer the matter to the SRA for investigation before proceeding with the application. If the SRA finds the complaint is substantiated, the SRA may take over on the applicant’s behalf or use it’s own powers to deal with the matter

Question 21

what powers does the SDT have?

Answer 21

Section 47 Solicitors Act 1974 gives the SDT power to make such order as in its discretion it thinks fit, including the following:
(a) striking a solicitor off the roll (once struck off the SDT may also restore a solicitor to the roll);

(b) suspending a solicitor from practice or imposing restrictions upon the way in which a solicitor can practise;

(c) imposing an unlimited fine payable to HM Treasury;

(d) reprimanding the solicitor;

(e) requiring the payment by any party of costs or a contribution towards costs.

Question 22

which court would you appeal an order of the SDT?

Answer 22

the Administrative Court

Question 23

what is the SRA Compensation Fund?

Answer 23

a discretionary fund of last resort to make grants
to persons whose money has been stolen or otherwise not accounted for as the result of an act or omission of those regulated by the SRA (‘a defaulting practitioner’), and to relieve losses for which SRA authorised bodies should have had insurance but did not.

It is funded by mandatory contributions by all solicitors and SRA-authorised bodies.

Question 24

how much may an applicant be awarded from the SRA Compensation Fund?

Answer 24

The Fund does not pay out sums of more than £2 million per claim (unless the SRA is satisfied that there are exceptional circumstances in the public interest that justify a higher sum).

Where there are multiple related or connected claims, the SRA may impose a cap of £5 million on the total amount paid.

Question 25

what duties does a solicitor have to their client if they do something wrong?

Answer 25

they must be open and honest

the solicitor should tell the client about their error immediately

Question 26

a breach of which SRA principle will be considered the most severe and attract the greatest sanction?

Answer 26

honesty

Question 27

in determining whether a solicitor’s conduct is dishonest, the SRA adopts a two-stage test, what is it?

Answer 27

(1) What was the solicitor’s genuine knowledge or belief as to the facts at the time?
(2) In view of the solicitor’s knowledge or belief at the time, was their conduct dishonest by the standards of ordinary decent people? - This is an objective test. There is no requirement that the solicitor knew or understood that
their behaviour was dishonest.

Question 28

what do the courts understand the difference between honesty and integrity to be?

Answer 28

Wingate and another v SRA and Malins v SRA [2018] EWCA Civ 366

Question 29

which case for a solicitors duty to uphold the rule of law and the proper administration of justice and what does it say?

Answer 29

SRA v Farrimond [2018]

committing a serious offence like attempted murder is wholly incompatible with being a solicitor

Question 30

which case for the principle of honesty and what does it say?

Answer 30

committing a criminal offence and dishonesty may overlap but one is not a prerequisite for the other

Bultitude v Law Society [2004] - sol breached solicitors accounting rules but argued he was not dishonest because he did not have the intention to permanently deprive (the necessary intention for theft)

held that proof of dishonesty did not depend on proving an intention permanently to deprive

Question 31

which case for the principle of integrity and what does it say?

Answer 31

Wingate and another v SRA and Malins v SRA [2018]

Integrity is a broader concept than honesty. In professional codes of conduct the term
‘integrity’ is a useful shorthand to express the higher standards which society expects
from professional persons and which the professions expect from their own members.

To take one example, a solicitor conducting
negotiations or a barrister making submissions to a judge or arbitrator will take particular care not to mislead. Such a professional person is expected to be even
more scrupulous about accuracy than a member of the public in daily discourse

Question 32

the SRA Transparency Rules require those advertising their services to provide information about costs. to which services are these rules applicable and what information regarding costs is required?

Answer 32

The specified services in relation to individuals are:
* residential conveyancing,
* uncontested probate (where all assets are within the UK),
* motoring offences (summary only offences),
* employment tribunals (claims for unfair or wrongful dismissal),
* immigration (excluding asylum applications).

The specified services in relation to businesses are:
* debt recovery (up to £100,000),
* employment tribunals (defending claims for unfair or wrongful dismissal),
* licensing applications for business premises.

The information on the costs must include the following:
(a) the total cost of the service or cost estimate and disbursements

(b) the basis for the charges (including any hourly rate or fixed fees);

(c) what services are included within the displayed price and details of any services which might reasonably be expected to be included in the price but are not;

(d) the experience and qualifications of anyone carrying out the work (and their supervisors);

(e) whether VAT is payable on the fees or disbursements and, if so, if this is included in the price;

(f) typical timescales and the key stages of the matter;

(g) if conditional fee or damages-based agreements are used, the circumstances in which clients may have to make any payments themselves for the services received (including
from any damages).

Question 33

where must the costs information be published according to the SRA Transparency Rules?

Answer 33

prominent place on the website which is accessible, clearly signposted and easy to find.

if the firm doesn’t have a website - info must be made available upon request

Question 34

what should a solicitor consider before making an unsolicited approach? consider para 8.9 of the SRA Code of Conduct

Answer 34

they must have all the relevant consents required by the relevant date protection legislation

data protection legislation allows people to request their details are not used for direct marketing purposes - this should be complied with

sols are not able to make unsolicited approaches to members of the general public that even if permitted by law, feel unwelcome and intrusive

Question 35

what is the intention behind para 8.9 of the SRA Code of Conduct?

Answer 35

intended to prevent direct or specifically targeted approaches to members
of the public in person, by phone or other means

Question 36

which of the following would and would not be considered an unsolicited approach and therefore prohibited under para 8.9 of the SRA Code of Conduct?

newspaper ads
tv ads
sending leaflets to a large geographic area
sending leaflets to specific areas based on wider info

Answer 36

newspaper / tv / sending leaflets to a large geographic area = permitted as not a targeted approach

sending leaflets to specific areas based on wider info = not permitted as is a targeted approach to members of the public, which is what para 8.9 intends to prevent

Question 37

what do the SRA Transparency Rules require firms to put on their letterheads, websites and emails?

Answer 37

website:
SRA number
SRA’s ‘digital badge’
info re the firms complaints procedure
how to complain to the SRA and LeO

letterheads and emails:
SRA authorisation number
‘authorised and regulated by
the Solicitors Regulations Authority’

Question 38

what duties do solicitors have in informing clients about who regulates them?

Answer 38

duty to inform which activities will be carried out by someone regulated by the SRA and which activities will be carried out by someone regulated by another body

must ensure it does not appear that a person is regulated by the SRA when they are not

Question 39

where a solicitor refers a client to a third party e.g. an estate agent, what must the sol make the client aware of?

Answer 39

any financial or other interest which the solicitor, the solicitor’s business or
employer has in referring the client to another person/body (Paragraph 5.1(a))

Question 40

what is a fee-sharing arrangement and what duties do solicitors have to their clients regarding fee-sharing arrangements?

Answer 40

where a sol makes a payment to a third party in respect of a percentage of the solicitor’s gross or net fees

clients must be informed

the fee-sharing arrangement must be in writing (Paragraph 5.1(b) and (c))

and the clients (of which the fees are obtained) must not be acquired in a way which runs contrary to the Code of Conduct (e.g. via unsolicited approaches)

Question 41

in what circumstances are referral fees prohibited?

Answer 41

in claims for damages following personal injury or death (LASPO)

Question 42

a law firm may have a separate business e.g. an estate agency. under what circumstances can the firm introduce or divide the work between themselves and the separate business?

Answer 42

where the client has given informed consent (Paragraph 5.3)

Question 43

a solicitor’s promotional material must not be ____________ or _____________ .

Answer 43

misleading or inaccurate

Question 44

what obligations does a solicitor have under para 8.1 of the Code of Conduct?

which case demonstrates the effects of falling foul of these obligations?

Answer 44

A solicitor must identify whom they are acting for in relation to any matter

P&P Property Ltd v Owen White & Catlin LLP & Dreamvar (UK) Ltd v Mishcon De Reya

no negligence on behalf of sellers sols but not carried out satisfactory ID checks on the seller, who was fraudulently selling properties he did not own. both buyers and sellers sols were in breach of trust as they had received funds for the purpose of sale/purchase of property which was no longer possible.

demonstrates important of ID checks otherwise sols can become innocent victims

Question 45

what does para 3.1 of the Code of Conduct discuss.

what are the consequences of falling foul of this obligation?

which case?

Answer 45

about taking instructions from the client or from a third party authorised to provide instructions

sol usually personally liable for costs incurred

Warner v Masefield - issued proceedings on behalf of two trustees but only received instructions from one - firm ordered to pay the costs of the parties involved

Question 46

what obligations does a sol have regarding duress / undue influence / vulnerable clients?

what steps can they take to fulfil this obligation?

Answer 46

If a solicitor has reason to suspect that the instructions received from a client, or someone authorised on their behalf, do not represent the client’s wishes, the solicitor must not act unless they have satisfied themselves that they do (Paragraph 3.1

could arrange an interview with the client alone

concerns of duress = may seek assistance from the High Court to provide
its protection under its inherent jurisdiction

Question 47

what should a solicitor do if their client would like them to draft their will leaving a significant gift to the solicitor?

Answer 47

may present an own interest conflict (para 6.1)

para 6.1 prevents a sol from acting in these situations unless the sol is satisfied the client has received independent legal advice

Question 48

what duties does a solicitor owe their client under their retainer?

Answer 48

duty of reasonable care and skill
duty to act in the client’s best interests
duty not to take advantage of the client
confidentiality
disclosure
client care and costs

Question 49

in what circumstances will the implied term of reasonable care and skill not apply?

could a client issue proceedings on another basis?

Answer 49

the implied term does not apply to advocacy services provided before a court, tribunal, inquiry or arbitrator

negligence (applies to contentious and non-contentious)

Question 50

what rights of termination does a client have?

Answer 50

they may terminate their retainer at any point but may be liable to pay fees for work completed upon until the point of termination

Question 51

what rights of termination does a solicitor have?

Answer 51

sol needs to be able to justify their termination

good reasons for termination:

(a) complying w instructions = breach of the law or professional conduct;

(b) the solicitor cannot obtain proper instructions from the client;

(c) there has been a breakdown in confidence within the relationship between the solicitor and client (eg the client is not willing to accept the advice of the solicitor).

Question 52

in what circumstances will a retainer be terminated by law?

Answer 52

bankruptcy - if in a firm and the individual goes bankrupt - one of the other sols will take over

mental capacity

Question 53

upon termination of a retainer, a sol should deal promptly with the client’s papers and
property of the client within the solicitor’s possession (e.g. money). does a sol have a duty to do this or is this a matter of good practice?

Answer 53

good practice

Question 54

sols should keep their clients informed as to costs (para 8.7) however they should be careful in providing fee estimates - which case evidences this?

Answer 54

Reynolds v Stone Rowe Brewer

original fee estimate 10-18k

few months later the sol revised the number to 30k

the court held the firm to the original fee estimate

Question 55

if an accurate fee estimate cannot be given, what should the sol provide the client with?

Answer 55

a costs ceiling (above which the sol cannot go unless the client gives permission)

a review date

Question 56

what is the usual cancellation period for an ‘off-premises’ contract?

Answer 56

14 days

Question 57

list the different ways in which a solicitor can charge a client

Answer 57

fixed fees
hourly rates
variable rates - on a certain outcome e.g. CFAs / damages based agreements - DBAs

Question 58

list the requirements of a CFA

when can a CFA not be used?

Answer 58

in compliance with the Courts and Legal Services Act and the Consumer Contracts Regulations

must be in writing
success fee agreed - currently limited to 25% of damages
must undertake risk assessment to calculate the success fee

cannot use CFAs in family or criminal proceedings

Question 59

if a client loses a case and has used a CFA, he/she will have no outstanding fees to pay, true or false?

Answer 59

false

whilst they are unlikely to need to pay solicitor’s costs, they will usually still have to pay disbursements - court fees, barrister’s fees

the client may also have to pay the opponent’s costs

Question 60

what is the limit a sol can be entitled to under a DBA?

Answer 60

The DBA must not provide for a payment above an amount which, including VAT, is equal to 50% of the sums ultimately recovered by the client.

personal injury cap = 25%

Question 61

what is before the event and after the event insurance cover and what is a sols role in relation to this?

Answer 61

insurance you can obtain either before or after you begin proceedings to cover the outstanding costs if you were to lose a court case under a CFA / DBA

Question 62

can a sol be renumerated via an agreement to obtain shares in a company

Answer 62

yes but the client should seek independent legal advice re this costs arrangement

Question 63

is a sol able to terminate the terms of a retainer for a contentious matter if they have not received money on account within a reasonable period?

is a sol able to do this for a non-contentious matter?

Answer 63

for a contentious matter = yes

non-contentious matter = no - they would need to add this in as a term of the retainer

Question 64

what must a solicitor’s bill include?

Answer 64

enough info so the client can decide if the bill is reasonable
what period of time the bill relates to
must be signed
must be delivered to the client in the way matters are usually communicated

Question 65

when can a solicitor start charging interest on a bill for a contentious matter?

Answer 65

can charge interest on the whole or outstanding part of the bill
from one month after the delivery of the bill
provided the client has been informed of their right to challenge the bill
the interest rate must not exceed that payable on judgment debts (currently 8%)

Question 66

when can a solicitor start charging interest on a bill for a non-contentious matter?

Answer 66

may start charging interest if stipulated in the retainer or where the client later agrees to a contractual consideration to pay interest

the rate of interest will be that for judgment debts unless otherwise agreed

Question 67

in which circumstances may a firm commence enforcement proceedings against a client for unpaid bills before the one month period?

Answer 67

if the court is satisfied the client is about to:
leave the country
be declared bankrupt
there is another reason which would prevent or delay the solicitor obtaining thier fees

Question 68

a client may apply to the court to have their bill assessed, what is the process for this?

Answer 68

within one month
if no application for review by the court within this period - still has 12 months but will require leave from the court for it to be assessed
will be assessed by a judge or a DJ acting as a costs officer
usually assessed on an ‘indemnity basis - reasonable costs
any doubt as to what would be considered reasonable will go in favour of the solicitor
client may be ordered to pay the sol’s costs in relation to the assessment process

Question 69

in assessing whether a bill for a non-contentious matter is reasonable, the court must have regard to which factors?

Answer 69

(a) the complexity of the matter, or the difficulty or novelty of the questions raised;
(b) the skill, labour, specialised knowledge and responsibility involved;
(c) the time spent on the business;
(d) the number and importance of the documents prepared or considered, without regard to
length;
(e) the place where and the circumstances in which the business or any part thereof is
transacted;
(f) the amount or value of any money or property involved;
(g) whether any land involved is registered;
(h) the importance of the matter to the client; and
(i) the approval (express or implied) of the entitled person, or the express approval of the testator, to:
(i) the solicitor undertaking all or any part of the work giving rise to the costs, or
(ii) the amount of the costs.

Question 70

in assessing whether a bill for a contentious matter is reasonable, the court must have regard to which factors?

Answer 70

(a) the conduct of the parties;
(b) the amount or value of any money or property involved;
(c) the importance of the matter to the parties;
(d) the particular complexity of the matter, or the difficulty or novelty of the questions raised;
(e) the skill, effort, specialised knowledge and responsibility involved;
(f) the time spent on the case; and
(g) the place where and the circumstances in which work, or any part of it, was done

Question 71

for a non-contentious business agreement to be valid, what is required?

what is the effect of it’s presence?

Answer 71

in writing

signed by the client

include all the terms of the agreement (including VAT / disbursements etc)

effect = cannot apply to the court for it to be assessed unless the amount charged by the sol is unfair / unreasonable

Question 72

for a contentious business agreement to be valid, what is required?

what is the effect of its presence?

Answer 72

must state it is a contentious business agreement

in writing;

signed by the client

must contain all the terms

effect = cannot apply for the court to assess costs (unless it specifies the sol should be renumerated on the basis of hourly rates or is unfair / unreasonable)

Question 73

following an assessment from a costs officer (in a non-contentious matter), when must a sol inform the SRA of the reduction?

Answer 73

when costs have been reduced by more than 50%

Question 74

when receiving a commission, what should the sol do in order to fulfil their fiduciary duty to their client?

i.e client has tax issues and is referred to a specialist tax accountant…

Answer 74

(a) pay it to the client; or
(b) offset it against fees; or
(c) keep it where the client has agreed to this

Question 75

para 6.3 imposes which duty on sols?

Answer 75

confidentiality

Question 76

in what circumstances can a sol disclose a client’s confidential information?

Answer 76

when the client has given consent

when such disclosure is necessary

when disclosure is in the client’s best interests

the sol must ensure the client understands what is being disclosed and to who

Question 77

in its guidance the SRA gives examples of circumstances which, although still technically amounting to a breach of the duty of confidentiality, may be taken into account as mitigation in the context of disciplinary action. what are they?

Answer 77

client has indicated suicide or serious self-harm
preventing harm to children or vulnerable adults
preventing the commission of a criminal offence

Question 78

what general prohibition is contained in para 6.5 of the code of conduct?

Answer 78

solicitor must not act for a client in a matter where that client has an interest adverse to the interest of another current or former client for whom confidential information which is material to that matter is held unless either of the exceptions set out in
the Code is met.

Question 79

what are the exceptions to the general prohibition under para 6.5 of the code of conduct?

Answer 79

• effective measures have been taken which result in there being no real risk of disclosure of the confidential information; or
• the current or former client whose information is held has given informed consent, given or evidenced in writing, to the solicitor acting, including to any measures taken to protect
  their information

this idea of informed consent is difficult in practice because the sol should avoid giving confidential details about the party which the former/current client may conflict with - but then how are they to give informed consent?

Question 80

who does the duty of confidentiality pass to upon the clients death?

Answer 80

the client’s personal representative

Question 81

are there any circumstances in which a solicitor can act if there is an own interest conflict or a significant risk of one?

Answer 81

no

Question 82

a solicitor should not act where there is a conflict of interest between clients, except in circumstances where…

Answer 82

(a) the clients have a substantially common interest in relation to the matter or the aspect of it, as appropriate; or
(b) the clients are competing for the same objective.

Question 83

can a conflict of interest arise between a potential new client and a former client

Answer 83

no - a conflict of interest may only arise between two or more current clients

where a retainer has been terminated, the sol no longer owes them a duty to act in their best interests

duty of confidentiality still applies

Question 84

in which circumstances will there most likely be a conflict of interest

Answer 84

between opposing parties in litigation

opposing parties to a negotiation e.g the buyer and seller of a property

but should be decided on the facts of the case

Question 85

Where a conflict of interest exists, or where there is a significant risk that a conflict may
exist, a solicitor may still act for both parties in which circumstances?

Answer 85

with the informed consent of both parties - where there is a common purpose and strong consensus as to how it should be achieved

where the parties are competing for the same objective e.g. where two companies are bidding to buy the same company (despite the fact that this may jeopardise the obligation to act in each clients’ best interests)

Question 86

will a conflict occur if a sol acts for two competitors in the same market, but on completely separate transactions?

Answer 86

no conflict - where the only conflict between parties is their wider business interests = no conflict

Question 87

what are the two types of conflicts of interests?

Answer 87

own interest conflict = conflict between sol and client

conflict between two or more clients

Question 88

A set of conditions must be met if a solicitor is to be able to act for two or more clients under either of the exceptions in Paragraph 6.2, what are the conditions?

Answer 88

(a) all the clients have given informed consent, given or evidenced in writing, to the solicitor acting;

(b) where appropriate, effective safeguards are put in place to protect the clients’
confidential information; and

(c) the solicitor is satisfied it is reasonable to act for all the clients

Question 89

are there any exceptions to the rule in para 6.1 regarding own interest conflicts?

Answer 89

no

Question 90

what alternative action (to the exceptions in para 6.2) could a sol take if a conflict arises at the beginning or during a transaction?

Answer 90

limited retainer - advise on the areas where there is no conflict and client seek independent legal advice on the remaining aspects

Question 91

will the following be considered undertakings?

where a member of staff has made a promise on behalf of the sol

where the sol has promised to give an undertaking

where the words ‘undertaking’ are not actually used

Answer 91

first two scenarios = may be an undertaking

final scenario = the words undertaking do not actually have to be used

Question 92

once an undertaking has been relied upon, it can only be withdrawn via ____________

Answer 92

agreement

Question 93

what are the consequences for failing to comply with an undertaking?

Answer 93

the recipient may personally sue the sol

the sol will have breached the code of conduct and may be disciplined by the SDT

Question 94

an undertaking is only binding when in writing. true or false?

Answer 94

false - an undertaking is binding orally and in writing

Question 95

regarding any ambiguity as to the wording of a written undertaking, who will the courts be likely to decide in favour of?

Answer 95

the recipient

Question 96

in what circumstances should a sol avoid giving an undertaking?

are there ways they could mitigate this?

Answer 96

where discharge of the undertaking is reliant on a third party

they will use ‘reasonable endeavours’ to discharge the undertaking

Question 97

will an undertaking given ‘on behalf of the solicitor’s client’ exclude the solicitor from personal liability if they fail to discharge it?

Answer 97

no it will remain enforceable against the solicitor themselves

a sol would need to expressly disclaim personal liability in the clearest form - unlikely the recipient would then accept it

Question 98

A solicitor must have clear and express authority from the client before giving any
undertakings. When such authority has been received, it may be withdrawn by the client in what circumstances?

Answer 98

at any point up until the solicitor has acted on it

and even if it is expressed to be irrevocable

Question 99

what is the impact of the decision in Harcus Sinclair v Your Lawyers?

Answer 99

the SC looked at whether an undertaking could be enforceable against incorporated law firms (e.g. LLPs) - the SC decided they could not

this significant as most sols give undertakings on behalf of their firms - the High Court loses its supervisory jurisdiction to enforce undertakings

there are other ways the undertaking can be enforced e.g. via breach of contract, negligence etc

Question 100

what are the three ways in which an undertaking may be enforced against a sol?

Answer 100

a breach = professional misconduct - sol faces disciplinary action

undertakings are usually a contract (even where there is a no consideration) and can be enforced as such

the High Court has supervisory jurisdiction over the enforcement of undertakings - the recipient of an undertaking can apply to the court for a summary order that a solicitor complies with an undertaking and if they fail to do so they can be held in contempt.

Question 101

do sols have a duty to inform the other side of witnesses and evidence regardless of whether it would prejudice their client’s position?

answer for both criminal and civil cases

Answer 101

criminal:

defence = no obligation to inform the other side of witnesses/evidence that would prejudice their won client’s position

prosecution = must inform the defence of evidence which may assist them

civil:
both parties do not have obligations to one another re evidence

Question 102

do the SRA/ Legal Ombudsman/ Solicitors Disciplinary Tribunal have the power to enforce an undertaking?

Answer 102

no - only disciplinary action against the sol

Question 103

what should a sol do if it appears their client is selecting counsel based on discriminatory grounds? e.g the client is facing sex discrimination claims and wants to choose the female barrister

Answer 103

the sol should discuss with the client and if necessary ask the client to change their instructions - where the client refuses it is usually appropriate to cease acting

Question 104

who is responsible for the payment of counsel’s fees?

Answer 104

the solicitor

this is why many firms request monies on account

Question 105

if a solicitor becomes a DJ or a member of a planning committee and has inside information which would be of help to one of their clients or one of their colleague’s clients, are they able to disclose this information in their advice?

Answer 105

should cease acting in these circumstances - would be in breach of principles 2 and 5 in upholding the public’s trust and confidence in the profession and acting with integrity

Question 106

Where a solicitor is instructed to administer a probate estate, the solicitor’s client will be the personal representative of the deceased’s estate. However, in certain circumstances a solicitor will also owe a duty of care to the beneficiaries of that estate.

which cases state this?

Answer 106

Ross v Caunters :

A solicitor failed to warn a testator that the will should not be witnessed by a beneficiary.
Accordingly, the beneficiary who witnessed the will was unable to claim her share of the
estate.
The solicitor was held liable in negligence to the beneficiary.

White v Jones :

A solicitor was instructed to draw up a will. The client died approximately a month later,
before the will had been drafted. The solicitor was successfully sued in negligence by the beneficiaries who missed out on their share of the estate as a result of the solicitor’s failure to draft the will.

Question 107

who is responsible for the fees of agents or other parties appointed by the sol?

Answer 107

the sol

Question 108

does a solicitor have a duty to draw the court’s attention to relevant cases and statutory provisions or procedural irregularities?

Answer 108

yes - where they may have a material effect on the outcome of proceedings

Question 109

Paragraph 7.6 requires a solicitor to notify the SRA automatically should a particular event occur, what are they?

Answer 109

criminal conviction

bankruptcy, enters into creditors voluntary arrangement or is subject to a debt relief order

the sol becomes aware of a material change regarding them or their practice previously provided to the SRA

the sol realises information they have provided to the SRA previously is wrong or misleading

Question 110

what duties do solicitors have to report any serious breaches of its regulatory arrangements?

Answer 110

the sol must make a prompt report to the SRA on ‘serious breaches’

the obligation to report may be satisfied by the sol reporting to their COLP - however they should still make a report where they feel it is required or the COLP may not make a report to the SRA

the SRA’s view is that breaching confidentiality is likely to be justified where it enables the SRA to discharge its regulatory function

Question 111

who has the ultimate responsibility of ensuring a firm is compliant with the regulations as set out by the SRA

Answer 111

manager - however a finding of misconduct against a firm will not be against that individual manager, it will be against the firm unless the manager is responsible or should have know or did know and did not intervene

Question 112

the SRA have made clear that the ______ and ________ will not be used a scapegoat for any misconduct of a firm, the ultimate responsibility lies with ______

Answer 112

COLP + COFA

manager

unless the COLP has failed in their duties

Question 113

what is the COFA’s role?

Answer 113

Compliance Officer for Finance and Administration

compliance with the SRA Accounts Rules

Question 114

you have been instructed by bill regarding a contract dispute with bob. bob is a client of the residential property team for the sale of his house. can you act

Answer 114

yes - there is no conflict because you are not advising bill on the same matter or aspect of the matter - you are not advising bill on buying bobs house (this would be the same matter)

Question 115

all undertakings must be performed within a reasonable amount of time. true or false?

Answer 115

false - Para 1.3 of the Code of Conduct provides that undertakings should be performed within ‘an agreed timescale’. It is only where a timescale has not been agreed that the obligation is to perform the undertaking ‘within a reasonable amount of time’.

Question 116

A partner in a law firm undertakes to send completion money for a commercial transaction on which the firm is instructed to the firm acting for the other party. The partner then disappears with the money. The other partners in the firm cannot be held liable. true or false

Answer 116

False. Para 1.3 of the Code of Conduct requires that ‘you perform all undertakings given by you within an agreed timescale or if not timescale has been agreed then within a reasonable amount of time’, and this provision is replicated in the SRA Code of Conduct for Firms.

Question 117

you defended a client against a murder charge a year ago. he was acquitted. he tells you he is grateful he got away with it. a year later you see on the news another person has been convicted of the crime - should you disclose this to someone. would your position change if your former client was dead?

Answer 117

you cannot disclose unless the client permits you to

duty of confidentiality

the duty extends beyond death

Question 118

clients should be informed in writing at the time of engagement of the firms complaints procedure. true or false

Answer 118

false

the requirement is to inform the client of their right to complain + how they can do so + their right to complain to the LeO + when they can do so

Question 119

what information should be contained in the client care letter?

Answer 119

should be written in a way the client can understand, so they can make an informed decision
should be tailored to their matter
costs - fee estimate / hourly rate / disbursements / VAT
service levels - how often the client should expect to hear from the sol
responsibilities - what their role will be and if there is any requirement to include a third party
competence and supervision - if anyone is responsible for supervising their work, will a trainee be involved etc.
regulation

Question 120

what information should be provided in writing at the point of engagement?

Answer 120

must inform the client in writing about their right to complain

Question 121

A solicitor is dealing with a case for a client involving a claim for negligence against a firm of architects. At the outset of the matter, the solicitor gave the client a written estimate of likely overall costs of £20,000, including VAT, counsel’s fees and other disbursements. A month later, the solicitor decides that an expert technical report is needed at a cost of an additional £5,000 plus VAT.

Which of the following statements best describes what the solicitor should do next?
A. The solicitor should write to the client to inform him about the cost of the expert report and ask for instructions because a solicitor must get prior approval for every item of expenditure.

B. The solicitor should write to the client to inform him about the cost of the expert report and ask for his instructions because the original estimate is no longer accurate.

C. The solicitor does not need to do anything because the client was informed at the outset that the figure was an estimate only.

D. The solicitor does not need to do anything because the opposing party will be ordered by the court to pay the costs of the expert report.

Answer 121

best answer is B

Question 122

you have entered into a referral agreement with an estate agency. do they need to be compliant with the SRA principles?

Answer 122

yes

Question 123

A solicitor has been instructed by a client in a divorce matter in relation to an application for financial orders. The client’s wife runs a highly successful global property investment company but the client is convinced that the company accounts which have been disclosed do not reflect the true net worth of the company or the profit it generates.
The solicitor’s brother-in-law is a forensic accountant who specialises in high value family cases. The solicitor has concluded that making a referral would not compromise his independence as the client’s legal adviser and that it would be in the best interests of the client because his brother-in-law is considered one of the best in his field.
The solicitor will not receive any financial benefit from the referral. He know that his brother-in-law will be grateful for the introduction.
Which of the following best describes what action the solicitor should take?

A. Ask one of the other members of the divorce team to refer the client to his brother-in-law.

B. Refer the client to another forensic accountant.

C. Get written confirmation from his brother-in-law that the solicitor will not get a financial benefit for the referral.

D. Recommend that the client instruct his brother-in-law direct and make no mention of the family connection.

E. Inform the client of the proposed referral and of the family connection.

Answer 123

E

Question 124

the general rule is that a sol cannot act where there is a conflict of interest, except where….

Answer 124

the clients have a substantially common interest or where they are competing for the same objective

AND

they have given their informed consent
protections are put in place to protect each client’s confidential information
it is reasonable for the sol to act

Question 125

After a trial a defendant is found not guilty of theft. His solicitor returns to the office after court to find that the defendant has left a bottle of champagne at reception to thank the solicitor. The bottle still has an anti-theft tag from a shop attached to it, causing the solicitor to suspect that a theft may have occurred.

Which of the following best describes the solicitor’s position with regard to the rules of professional conduct?

a) The solicitor must refer to the guidance for receiving gifts and discuss that guidance with his managing partner.

b) The solicitor must contact the police if he suspects that the champagne may have been stolen as he has a duty to uphold the rule of law.

c) the solicitor must return the champagne as he has a duty to act with honesty.

Answer 125

best answer = b

Option B is correct, as it best describes the position. SRA Principle 1 says that solicitors should act in a way that “upholds the constitutional principle of the rule of law, and the proper administration of justice.” If a solicitor suspects that the law has been broken, reporting the matter to the police can been seen as encouraging the proper administration of justice. Note that no issue of confidentiality arises in the scenario as presented.

Question 126

A solicitor refers a client to a surveyor for advice on some structural damage to the client’s property. This is the first client that the solicitor has referred to this particular surveyor. Following the referral the solicitor is surprised to receive £150 from the surveyor. The surveyor explains that their usual practice is to pay £150 commission for any referral as a gesture of goodwill.

what should the solicitor do?

Answer 126

The solicitor must tell the client about the £150, and keep the payment, if the client agrees.

Question 127

A husband and wife own their matrimonial home jointly. The wife runs her own business and has approached a high street bank for a loan to raise more capital for the business. A significant part of the bank’s activities consist of lending and it has agreed to make the loan but requires security in the form of a legal charge over the matrimonial home. The legal charge will be on the bank’s standard terms and conditions and the bank will be asking for a certificate of title in the form approved by the Law Society and UK Finance. The wife has asked her solicitor if he can act for her, her husband and the bank in completing the legal charge

For whom can the solicitor act in the completion of the legal charge?

Answer 127

the solicitor can act for the wife, husband and the bank

It is possible to act for all three parties in these circumstances but only if the Etridge guidelines are followed and that there is no conflict of interest or significant risk of a conflict of interest between the parties.