Legal Services Flashcards
What is the 4-stage test for determining whether something is a regulated activity?
- Are you in business?
- Is there a specified investment?
- Is there a specified activity?
- Is the activity excluded?
What constitutes a specified activity?
- Dealing
- Arranging
- Managing
- Safeguarding
- Advising
- Lending money on/administering a regulated mortgage contract
What activities are excluded under the FSMA?
- Introducing
- Using an authorised third party
- Acting for an execution-only client
- Acting as trustee/PR
- Professional/necessary exclusion
- Takeover exclusion (must be acquiring 50%+ of shares)
What conditions need to be satisfied for a s 327 FSMA exemption to apply?
- Must not receive any (pecuniary) benefit/advantage which it does not account to its clients
- Specified activity must be a minor, incidental part of the professional services
- Firm must only carry out regulated activities permitted by DPB
- Firm must not carry on any other regulated activities
What is the test for a specified activity being incidental?
Specific test = regulated activity must arise out of/be complementary to some other service being provided by the firm
General test = cannot be a major part of firm’s activities
What are reserved legal activities?
Can only be carried out by those who are authorised
- Exercise the right of audience
- Conduct of litigation
- Reserved instrument activities
- Probate activities
- Notarial activities
- Administration of oaths
What businesses are eligible for authorisation?
Sole practice (individual solicitor)
Recognised body = at least 75% of body’s managers are legally qualified; those who are legally qualified hold more than 75% of shares/voting rights; managers who are not legally qualified must be approved by the SRA
- If it is a licenced body, at least one manager needs to be authorised by the SRA and they must have a Head of Finance and Administration and Head of Legal Practice
What is needed for a solicitor to be qualified to act?
- Admitted as a solicitor
- On the roll
- Have a certificate issued by the Law Society authorising them to practice as a solicitor
Can apply for a certificate if:
a) Name is on the roll
b) Have sufficient knowledge of written/spoken English or Welsh
c) Not be suspended from practice as a solicitor
For a freelance solicitor working outside of an authorised firm, in what circumstances do they not need to be authorised?
If:
1. They have practiced as a solicitor for more than 3 years
2. Self-employed and practice in their own name
3. Take out indemnity insurance
4. Do not employ anyone in connection with those services
5. Only hold limited categories of client’s money
Under the Equality Act 2010, what are the 9 protected characteristics?
- Race
- Religion and belief
- Sex
- Sexual orientation
- Age
- Disability
- Gender reassignment
- Marriage/civil partnerships
- Pregnancy and maternity
What is the test for direct discrimination?
- Comparator
- Treatment experienced must be different from another real/hypothetical person - Less favourable
- Treatment must be less favourable than that offered to the comparator - Protected characteristic
- This must be the cause of treatment (or at least an influence)
No defence, except age if it is a proportionate way if achieving a legitimate aim
What is the test for indirect discrimination?
That conditions universally imposed prejudice members of a particular group
It is possible to justify action if it is a proportionate means of achieving a legitimate aim
What is the test for victimisation?
Someone does/is believed to have done a protected act and suffers a detriment because of it
Protected act:
1. Bringing proceedings under the Act
2. Giving evidence/info in proceedings
3. Doing anything related to the provisions of the Act
4. Making allegations under the Act
What constitutes harassment?
Unwanted conduct which violates dignity/humiliating/hostile
When does a solicitor have a duty to make adjustments?
As a service provider = must anticipate the possibility of disabled people using their service
- Only the individual affected can bring a claim
- Make claim to County Court
As an employer = do not need to anticipate adjustments, but must make them once they are brought to their attention
- Make a claim to the Employment Tribunal
What are 2 internal controls that firms must put in place with regards to money laundering?
- Must appoint MLRO and/or nominated officer who liaises with the NCA
- Must also appoint a MLCO who liaises with the SRA
What is required under standard due diligence?
Verify the identity of the client on identification documents received from an independent source
Identify the beneficial owner and verify their identity
Verify authorisation
- Eg: when someone purports to act on behalf of a client
What factors point towards using simplified due diligence?
- Company is listed on regulated market
- Location of regulated market
- Where the client is established and does business
What factors point towards using enhanced due diligence?
- Client provided false/stolen identification documents
- Client is a PEP or family member of a PEP
- Complex/unusually large transaction, which has no economic or legal purpose
- Client/counter-part to transaction is in a high-risk country
If a client is on the ‘sanctioned list’, can a firm still act for them?
Yes if they obtain a licence to receive reasonable fees for the provision of legal advice to someone on the sanctioned list
Firms can face liability even where they have no knowledge/reasonable cause to suspect that a transaction is in breach of the sanctions’ regime
Describe the arrangement which one knows/supsect facilitates money laundering offence (s 328 PCA 2002)
An arrangement which know/suspect facilitates the acquisition/retention/use/control of proceeds of crime
Know/suspect is subjective; must amount to ‘suspicion’
Criminal property = the property constitutes or represents benefit from criminal conduct
- If committed abroad, it will come under the definition of criminal conduct if it would have been considered as such in the UK
Define the authorised disclosure defence and the circumstances which enable a solicitor to exercise it?
Making a disclosure, normally to the nominated officer whose responsibility it is to report a suspicious activity report to the NCA
Before the act: once SAR has been sent, officer cannot give consent until:
a) Nominated officer receives consent
b) Nominated officer hears nothing for 7 days
c) Where consent is refused, nominated officer cannot give consent unless subsequently granted within 31 days or if the 31 day period expires
- 31 day period gives authorities time to take action with respect to the money laundering
During the act:
a) When the solicitor began to do the act, they did not know/suspect that property represented a benefit from criminal conduct; and
b) Disclosure is made as soon as practicable and on solicitor’s own initiative
After the act: must have goods reasons for failing to disclose; must be done as soon as practicable and on their own initiative
Define the overseas defence
Knew/believed criminal conduct occurred abroad and conduct was lawful in country where it took place
Secretary of State does have the power to override this provision
Describe the acquiring/possessing/using criminal property (s 329 PCA 2002) offence
Acquiring/using/possessing criminal property
Usually for those who had no involvement in the original crime, but have enjoyed the benefit
Authorised disclosure and overseas defence applies
