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SQE 1 - FLK 1 > Legal Services > Flashcards

Legal Services Flashcards

1
Q

What is the 4-stage test for determining whether something is a regulated activity?

A
  1. Are you in business?
  2. Is there a specified investment?
  3. Is there a specified activity?
  4. Is the activity excluded?
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2
Q

What constitutes a specified activity?

A
  1. Dealing
  2. Arranging
  3. Managing
  4. Safeguarding
  5. Advising
  6. Lending money on/administering a regulated mortgage contract
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3
Q

What activities are excluded under the FSMA?

A
  1. Introducing
  2. Using an authorised third party
  3. Acting for an execution-only client
  4. Acting as trustee/PR
  5. Professional/necessary exclusion
  6. Takeover exclusion (must be acquiring 50%+ of shares)
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4
Q

What conditions need to be satisfied for a s 327 FSMA exemption to apply?

A
  1. Must not receive any (pecuniary) benefit/advantage which it does not account to its clients
  2. Specified activity must be a minor, incidental part of the professional services
  3. Firm must only carry out regulated activities permitted by DPB
  4. Firm must not carry on any other regulated activities
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5
Q

What is the test for a specified activity being incidental?

A

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

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6
Q

What are reserved legal activities?

A

Can only be carried out by those who are authorised

  1. Exercise the right of audience
  2. Conduct of litigation
  3. Reserved instrument activities
  4. Probate activities
  5. Notarial activities
  6. Administration of oaths
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7
Q

What businesses are eligible for authorisation?

A

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
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8
Q

What is needed for a solicitor to be qualified to act?

A
  1. Admitted as a solicitor
  2. On the roll
  3. 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

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9
Q

For a freelance solicitor working outside of an authorised firm, in what circumstances do they not need to be authorised?

A

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

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10
Q

Under the Equality Act 2010, what are the 9 protected characteristics?

A
  1. Race
  2. Religion and belief
  3. Sex
  4. Sexual orientation
  5. Age
  6. Disability
  7. Gender reassignment
  8. Marriage/civil partnerships
  9. Pregnancy and maternity
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11
Q

What is the test for direct discrimination?

A
  1. Comparator
    - Treatment experienced must be different from another real/hypothetical person
  2. Less favourable
    - Treatment must be less favourable than that offered to the comparator
  3. 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

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12
Q

What is the test for indirect discrimination?

A

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

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13
Q

What is the test for victimisation?

A

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

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14
Q

What constitutes harassment?

A

Unwanted conduct which violates dignity/humiliating/hostile

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15
Q

When does a solicitor have a duty to make adjustments?

A

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

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16
Q

What are 2 internal controls that firms must put in place with regards to money laundering?

A
  1. Must appoint MLRO and/or nominated officer who liaises with the NCA
  2. Must also appoint a MLCO who liaises with the SRA
17
Q

What is required under standard due diligence?

A

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

18
Q

What factors point towards using simplified due diligence?

A
  1. Company is listed on regulated market
  2. Location of regulated market
  3. Where the client is established and does business
19
Q

What factors point towards using enhanced due diligence?

A
  1. Client provided false/stolen identification documents
  2. Client is a PEP or family member of a PEP
  3. Complex/unusually large transaction, which has no economic or legal purpose
  4. Client/counter-part to transaction is in a high-risk country
20
Q

If a client is on the ‘sanctioned list’, can a firm still act for them?

A

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

21
Q

Describe the arrangement which one knows/supsect facilitates money laundering offence (s 328 PCA 2002)

A

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

22
Q

Define the authorised disclosure defence and the circumstances which enable a solicitor to exercise it?

A

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

23
Q

Define the overseas defence

A

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

24
Q

Describe the acquiring/possessing/using criminal property (s 329 PCA 2002) offence

A

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

25
Q

Describe concealing (s 327 PCA 2002) offence

A

Concealing/disguising/converting/transferring criminal property or removing it from the UK

Authorised disclosure and overseas defence applies

26
Q

Describe the failing to disclose (s 330 PCA 2002) offence

A

Max 5 years’ imprisonment

  1. Know/suspect OR have reasonable grounds to know/suspect (=> objective) person is engaged in money laundering
  2. Information comes in course of business in regulated sector
  3. Information may assist in identifying money launderer/location of laundered property; and
  4. Do not make disclosure as soon as is practicable

Legal professional privilege defence applies, as well as overseas defence

27
Q

What is the defence to a nominated officer failing to disclose information to the NCA?

A

They must have reasonable excuse

28
Q

Describe the tipping off (s 333A PCA 2002) offence

A

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

29
Q

What are the defences to tipping off (s 333A PCA 2002)?

A
  1. Person making disclosure did not know/suspect that disclosure would prejudice the investigation
  2. Disclosure was made by an adviser to their client for the purposes of dissuading the client from engaging in alleged money laundering
30
Q

Define a conditional fee agreement (CFA), its enforceability and any limits/caps it has

A

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)

31
Q

Define a damages-based agreement (DBA), its enforceability and any limits/caps it has

A

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%

32
Q

Define before-the-event and after-the-event insurance

A

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

33
Q

Define third party funding and when it is available

A

Primarily used for commercial claimants

Do not fund PI and consumer cases

Not usually available for defendant unless they have a substantial consideration

34
Q

Define the scope of legal aid

A
  1. Client faces homelessness
  2. Victim of domestic abuse
  3. 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

35
Q

What tests are applied when determining whether someone is entitled to civil legal aid?

A
  1. Merits test = how likely is the client to succeed and what will be the benefit to the client?
  2. 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
36
Q

What tests are applied when determining whether someone is entitled to criminal legal aid?

A
  1. 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?
  2. 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

SQE 1 - FLK 1 (8 decks)

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