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FLK1 > Legal Services > Flashcards

Legal Services Flashcards

1
Q

Legal Services Board

A

Oversees conduct of all legal services, including:

  1. Solicitors Regulation Authority
  2. Bar Standards Board
  3. CILEx
  4. Intellectual Property Regulation Board
  5. Council of Licenced Conveyancers
  6. Cost Lawyers Standards Board
  7. Master of the Faculties
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2
Q

Reserved legal activities

A

Can only be carried out by someone authorised by a regulatory body e.g. SRA

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3
Q

An individual does not need to be regulated by one of the regulated authorities to act on their own behalf i.e. litigant in person

A
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4
Q

Professional indemnity insurance requirements

A

SRA sets out minimum level of insurance (at least £3 million coverage for any one claim)

Coverage must be adequate and appropriate

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5
Q

The amount a firm decides it needs for insurance must be adequate and appropriate BUT a firm needs at least £3 million coverage for any one claim.

A
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6
Q

Professional indemnity insurance: solicitors outside firms

A

If no reserved legal activity, no insurance requirement

If reserved legal activity, adequate and appropriate coverage required BUT don’t have to meet SRA minimum level of insurance like firms do BUT must let their clients know if their coverage is less than the £3 million minimum

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7
Q

Reserved legal activities (ADD OTHERS FROM TEXTBOOK)

A

Issuing proceedings

Appearing in court

Preparing wills

Dealing with sales and purchases of land

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8
Q

Profit costs

A

Fee for solicitors time

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9
Q

Disbursements

A

Expenses incurred on client’s behalf

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10
Q

Overriding objective

A
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11
Q

Funding options: non-litigation

A

Private funding/self-funding: pay solicitors’ costs and disbursements as they arise normally invoiced monthly

Fixed fee: agreed at outset

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12
Q

Retainer

A

Contract between the solicitor and the client that governs the provision of legal services

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13
Q

Funding options: litigation

A
  1. Private funding/self-funding
  2. Conditional fee agreement (no win no fee): client pays success fee if solicitor wins BUT client pays disbursements if solicitor loses
  3. Damages-based agreement (contingency fee agreement): client pays solicitor’s costs as a percentage of damages if solicitor wins BUT costs can be no more than 50% of the damages awarded or in a personal injury case no more than 25%
  4. Third-party funding: normally only in high-value litigation. Third-party agrees to finance all or part of legal costs in return for a fee which is paid from the damages rewarded if the claim is successful. Agree to cover costs and disbursements but not other sides legal fees if unsuccessful

In none of the above funding options (other than private funding) will the client pay solicitor’s costs if solicitor loses

  1. Legal expenses insurance:

a. Before the event insurance: covers the client for payment of solicitor’s legal costs in event the client becomes involved in litigation i.e. win or lose insurer pays all costs

b. After the event insurance: client may take this out after an event giving rise to litigation has occurred. Insurance will pay for solicitor’s disbursements and other sides’ legal costs BUT not solicitor’s fee

  1. Union funding: only if client is member of a union that provides insurance - similar to before event insurance.
  2. Public funding/legal aid:
    a. Civil legal aid: limited to housing, family and debt issues. Two tests must be passed to qualify for funding.
  3. Financial eligibility test
  4. Claim must pass a merits test

b. Criminal legal aid: two tests must be passed to qualify for funding.
1. Means test: finances are reviewed BUT not tested if defendant is under 18 or receives welfare benefits
2. Merits test: whether it is in the interests of justice to provide funding - crown courts cases will meet test

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14
Q

Professional obligations in relation to clients funding of litigation matters - solicitor’s must…

A

Explain nature of funding arrangment

Explain other options available

Refrain from favouring own interest

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15
Q

Types of discrimination

A

Direct: treating person less favourably than another because of protected characteristic

Indirect: putting people with protected characteristics at disadvantage

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16
Q

Justification for discrimination

A

If it is a proportionate means of achieving a legitimate aim i.e. public policy reason

Only justified for age or disability discrimination

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17
Q

Justification for indirect discrimination

A

If it is a proportionate means of achieving a legitimate aim

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18
Q

Money laundering

A

Making large amounts of money generated from criminal activity appear to come from a legitimate source

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19
Q

Stages of money laundering

A
  1. Placement: money enters financial system
  2. Layering: conceals source of money
  3. Integration: money appears legitimate
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20
Q

Types of money laundering offences

A

Direct:
Concealing
Arrangement
Acquisition, use or possession

Indirect: failure to fulfil anti-money laundering suspicions

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21
Q

Direct offence: concealing

A

Concealing, disguising, converting, transferrin

Criminal property from the UK (money or assets)

Know or suspect criminal activity

Defence: authorised disclosure

22
Q

Direct money laundering offence: arrangement

A

Assist someone

To keep proceeds of crime

Know or suspect criminal activity

Exception: ordinary litigation

Defence: authorised disclosure

23
Q

Direct money laundering offence: acquisition, use or possession

A

Person uses, acquires, possesses

Criminal property

Know or suspect criminal activity

Defences:
Authorised disclosure
Adequate consideration e.g. client pays reasonable fee to solicitor and solicitor didn’t know fees were being paid from the proceeds of crime

24
Q

Indirect money laundering offences: failure to report

A

Failing to report

Know or suspect criminal activity or have reasonable grounds to know or suspect criminal activity

Suspicious activity report

Defences:
Privileged circumstances
Lack of training

25
Q

Indirect money laundering offences: tipping off

A

Disclosing investigation or SAR has been made

To offender or third person

Exceptions:
Normal enquiries about instructions
Standard terms

Defences:
Permitted disclosures BUT can only be to another legal professional

26
Q

SAR = suspicious activity report

A
27
Q

Indirect money laundering offences: investigation

A

Making disclosure

That prejudices or obstructs investigation

Defences
Did not know or suspect
Disclosure for legal proceedings

28
Q

The Money laundering, Terrorist Financing and Transfer of Funds (Information on Payer) Regulations 2017

A

Regulations apply to activities with risk of money laundering occurring i.e. property being bought or sold, client money is being managed etc.

29
Q

Money laundering: Policies and procedures

A

Money laundering reporting officer (MLRO)

Customer due diligence

Controls and systems

Training

30
Q

Money Laundering Reporting Officer

A

Point of contact for reporting suspicions

If a firm’s MLRO is not available and there is no deputy MLRO, the solicitor must report their suspicion to the NCA

31
Q

Money laundering: customer due diligence

A

Know your customer - verify client’s identity

32
Q

Anti-money laundering training

A

For all client-facing staff

33
Q

Financial services: General prohibition

A

Cannot carry out regulated activity unless authorised or extempt

34
Q

Financial services: Regulated activity

A

Specified activity

In relation to a specified investment

Carried out in course of business AND

No exclusion applies

35
Q

Financial services: Specified activities

A

Advising

Arranging

Dealing as an agent

Managing

Safeguarding

36
Q

Financial services: specified investments

A

Insurance contracts

Shares in company

Debentures or bonds

Mortgage contract

Pension schemes

Funeral plans

NOT included:
Land
National savings products s i.e. premium bond

37
Q

Freelance solicitors must take out and maintain adequate and appropriate insurance if they are carrying out reserved legal activities (notarial services, conducting litigation, and preparing reserved instruments involving property interests)

BUT if they do not carry out reserved legal activities they do not need indemnity insurance

The SRA does not require freelance solicitors to purchase insurance at a minimum level of coverage.

A
38
Q

After 7 days of a SAR being made to the NCA can deem NCA consent and the potentially prohibited act can take place

A
39
Q

Occasional transaction = 15,000 euros or more

A
40
Q

Activities regulated by the Financial Services and Markets Act 2000 - most relevant to solicitors:

A
  1. Insurance contracts
  2. Shares in a company
  3. Debentures
  4. Mortgage contracts
  5. Pension schemes
  6. Funeral plans
41
Q

Exclusions to regulated activities

A
  1. Can deal as an agent, arrange, advise with respect to a client who is buying or selling 50% or more of a company
42
Q

Under the general prohibition of FSMA, a firm of solicitors may not carry on regulated activity in the UK unless they are authorised or exempt from authorisation. A regulated activity is defined as an activity specified in the Regulated Activities Order relating to an investment specified in the Order, which is carried out in the course of business, and to which no exclusions apply. The specified activities and investments might be remembered with the mnemonic device ‘ADAMS F.M.DIPS’. Activities = Advising, Dealing as an agent, Arranging, Managing, and Safeguarding. The specified investments most relevant to a solicitor = Funeral plans, Mortgage contracts, Debentures, Insurance contracts, Pension schemes, and Shares in a company. The firm would be able to contract for a client to enter into a settlement in an employment dispute because, while contracting on someone’s behalf is dealing as an agent (a specified activity), a settlement agreement is not a specified investment.

Arranging is making arrangements for another person to buy, sell, or subscribe for a particular investment

managing, which involves managing assets belonging to another person in circumstances which involve the exercise of discretion

safeguarding, that is, administering or safeguarding (looking after) the shares held by the estate.

dealing as agent, that is buying, selling, subscribing for, or underwriting investments as agent for a client

advising, that is, giving advice to an investor or potential investor on the merits of buying, selling, subscribing for, or underwriting a particular investment

Introducing exclusion: a solicitor can introduce a client to a person authorised by the Financial Conduct Authority in order for the client to receive advice BUT this does not apply to insurance policies

A
43
Q

Issuing proceedings and defending proceedings comprise the conduct of litigation. Conduct of litigation is a reserved legal activity so must be conducted by a person authorised by a regulator under the Legal Services Board

A
44
Q

The Financial Services and Markets Act 2000 exempts incidental activity of members of certain Designated Professional Bodies, including members of the SRA. Under this exemption, if a solicitor provides a financial service incidentally to the provision of legal advice and does not receive compensation for this from anyone else without accounting to the client for it, the services will be exempted.

A
45
Q

Stages of money laundering

A
  1. Placement: first stage in the money laundering process at which money is injected into the financial system, usually by opening a bank account into which the proceeds of a crime are deposited
  2. Layering: goal of losing the audit trail. Typically, money is transferred back and forth between various accounts and investments, making it very difficult for authorities to trace the money back to its original source.
  3. Concealment: final stage of the money laundering process, which typically involves purchases of legitimate assets and/or businesses with a goal to integrate the proceeds into the economy
46
Q

The maximum penalty the solicitor could face for a money laundering offence under POCA is 14 years and/or an unlimited fine.

A
47
Q

The SRA regulates non-lawyers if they are managers or employees of regulated law firms

A
48
Q

Legal executives are regulated by CILEx

A
49
Q

Publicly advertising solicitors services (such as on the radio) is generally allowed

A
50
Q

Conditional fee agreements cannot exceed 100% of normal fees charged i.e. double solicitors normal fees

A

FLK1 (8 decks)

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