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
Describe concealing (s 327 PCA 2002) offence
Concealing/disguising/converting/transferring criminal property or removing it from the UK
Authorised disclosure and overseas defence applies
Describe the failing to disclose (s 330 PCA 2002) offence
Max 5 years’ imprisonment
- Know/suspect OR have reasonable grounds to know/suspect (=> objective) person is engaged in money laundering
- Information comes in course of business in regulated sector
- Information may assist in identifying money launderer/location of laundered property; and
- Do not make disclosure as soon as is practicable
Legal professional privilege defence applies, as well as overseas defence
What is the defence to a nominated officer failing to disclose information to the NCA?
They must have reasonable excuse
Describe the tipping off (s 333A PCA 2002) offence
Tipping off/altering someone suspected of money laundering (or an associate) that an investigation has started/is anticipated
Can be committed through disclosing a disclosure/investigation
Unlimited fine/2 years’ imprisonment
What are the defences to tipping off (s 333A PCA 2002)?
- Person making disclosure did not know/suspect that disclosure would prejudice the investigation
- Disclosure was made by an adviser to their client for the purposes of dissuading the client from engaging in alleged money laundering
Define a conditional fee agreement (CFA), its enforceability and any limits/caps it has
If claim is unsuccessful, client pays nothing
If claim is successful, client pays fees plus an agreed uplift by way of a success fee
Enforceability:
a) Entered into in relation to any civil matter (except family proceedings)
b) In writing
c) State the success fee in a percentage
Limits:
a) Cannot exceed 100%
b) PI cases = cap of 25% of damages recovered
Even if C loses, they will have to pay for disbursements (but not solicitor’s fees)
Define a damages-based agreement (DBA), its enforceability and any limits/caps it has
Solicitor receives a percentage of any sums recovered by client in litigation
Enforceability:
a) In writing
b) Specify proceedings to which agreement relates
c) Circumstances in which fee is payable; and
d) Reasons for setting fee at agreed level
Limits:
a) PI cases = 25%
b) Employment cases = 35%
c) Other cases = 50%
Define before-the-event and after-the-event insurance
BTE = taken out as a general policy against the risk of future claims before a specific claim has begun
ATE = taken out after a specific claim has been made solely to cover the costs of that litigation
- Often coupled with CFA
Define third party funding and when it is available
Primarily used for commercial claimants
Do not fund PI and consumer cases
Not usually available for defendant unless they have a substantial consideration
Define the scope of legal aid
- Client faces homelessness
- Victim of domestic abuse
- Client has been subject to discrimination, immigration cases and care proceedings
Excluded:
a) Negligence claims for PI
b) Divorce
c) Family proceedings about children
d) Matters from carrying on a business
e) Cases which could have been financed by a CFA
What tests are applied when determining whether someone is entitled to civil legal aid?
- Merits test = how likely is the client to succeed and what will be the benefit to the client?
- Means test: financial eligibility check
a) In receipt of welfare benefits = automatically applies
b) Client’s disposal capital = less than £8,000 (£3,000 for immigration cases)
c) Client’s gross monthly income = must be between £733 - £2,637
What tests are applied when determining whether someone is entitled to criminal legal aid?
- Interests of justice test: factors to take into account:
a) Lose liberty/suffer damage to reputation
b) Case involves substantial question of law
c) Will individual be able to understand proceedings alone?
d) Tracing/interviewing/expert cross-examination of witnesses needed?
e) It is in the interests of another person that they are represented? - Means test
a) Automatically pass if under 18/receiving welfare benefits
b) Adjusted income is:
i. £12,475 or less = eligible for MC and CC
ii. £12,475 - £22,325 = full means test in both courts
iii. £22,325+ = not eligible in MC; full means test for CC
