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SQE1 > Legal Services > Flashcards

Legal Services Flashcards

1
Q

The sufficient requirement for a solicitor to commit the offence of failure to report under POCA 2002

A

The solicitor should have known or suspected money laundering was taking place

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2
Q

The body that oversees lawyers’ conduct in England and Wales

A

Legal Services Board

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3
Q

What are the below examples of?
- Exercise of a right of audience
- Conduct of litigation
- Reserved instrument activities
- Probate activities
- Notarial activities
- Administration of oaths

A

Reserved legal activities

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4
Q

Professional Indemnity Insurance must be

A

Adequate and appropriate

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5
Q

What is the minimum indemnity insurance coverage for a firm?

A

£3 million

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6
Q

How is adequate and appropriate indemnity insurance coverage determined?

A
  • Type of clients
  • Value of cases
  • Claims history
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7
Q

In which conditions can a freelance solicitor practice regulated activities without sole practitioner firm SRA authorisation?

A
  • Over three years post-qualification experience
  • Doesn’t hold client money
  • Takes out adequate and appropriate insurance
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8
Q

What should a solicitor carrying out regulated activities at a non-commercial body ensure?

A

Body takes out adequate and appropriate indemnity insurance

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9
Q

The term for a client paying up front ‘on account’ of costs

A

Private retainer

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10
Q

The term for a client paying the full cost at the outset

A

Fixed fee financing

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11
Q

What is a solicitor required to do before taking payment from a client?

What must be discussed?

A

Transparent advice and discuss funding arrangements with the client and to do what is best for the client

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12
Q

Method of litigation funding usually used by large companies or wealthy individuals

A

Private funding

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13
Q

Term for no win, no fee litigation funding arrangement

A

Conditional fee arrangement

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14
Q

Maximum solicitor can charge in a conditional fee arrangement if successful

A

Double normal fees

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15
Q

When can a conditional fee arrangement not be used?

A

Family proceedings

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16
Q

Litigation funding arrangement where client pays solicitor a percentage of amount awarded if successful

A

Damages based agreement

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17
Q

Maximum legal costs payable in a damages based agreement on a personal injury case

A

25% of sum recoverable, excluding future losses

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18
Q

Maximum legal costs payable in a damages based agreement for a non-personal injury case

A

50% of sum recoverable

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19
Q

Litigation funding agreement where client’s legal costs but not disbursements are paid by a funder

A

Third-party funding

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20
Q

Type of insurance where insurer pays solicitor’s legal costs, used in car and household insurance policies (legal expenses insurance)

A

Before the event insurance

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21
Q

Type of insurance where insurer pays cost of disbursements and usually other side’s costs if claim unsuccessful

A

After the event insurance

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22
Q

Type of fee arrangement often associated with after the event insurance

A

Conditional fee arrangement

Because clients sometimes take out this insurance to protect themselves from having to pay legal costs if they lose

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23
Q

Test to receive Civil Legal Aid

A

Financial Eligibility Test and Merits Test

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24
Q

Which type of firms can take on public funding cases?

A

Firms contracted with the Legal Aid Agency

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25
Q

Three types of civil proceedings where legal aid is available

A
  • Housing disputes
  • Family proceedings
  • Debt proceedings
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26
Q

In which case can a party not be forced to pay other side’s costs?

A

Party is legally aided

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27
Q

What must be demonstrated as part of a Merits Test for a party to receive Criminal Legal Aid

A

It is in the interest of justice for the party to receive funding
(Cases heard in the Crown Court satisfy the test automatically)

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28
Q

In which case can direct discrimination be applicable if victim does not have a protected characteristic?

A

Discrimination due to association with someone with a protected characteristic

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29
Q

Which act provides guidelines for discrimination?

A

Equality Act 2010

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30
Q

Treating someone less favourably due to protected characteristic

A

Direct discrimination

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31
Q

Putting individuals with protected characteristics at a disadvantage

A

Indirect discrimination

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32
Q

Firms must ensure disabled people are not at a …

A

Substantial disadvantage

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33
Q

In which cases can direct discrimination be justified?

A

Age and disability if proportionate means of achieving a legitimate aim

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34
Q

In which cases can indirect discrimination be justified?

A

Proportionate means of achieving a legitimate aim

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35
Q

What are the following examples of?
- Ensuring clients can easily access premises
- Providing sign language services
- Providing specialist equipment for employees

A

Reasonable adjustments

36
Q

Why might only limited adjustments be made by a firm?

A

Cost prohibitive

37
Q

Three stages of money laundering

A
  • Placement
  • Layering
  • Integration
38
Q

Which money laundering stage provides legitimacy to criminally obtained funds e.g. property investment, gambling winnings, buying businesses

A

Integration

39
Q

Which money laundering stages would a solicitor likely be involved in?

A

Layering and Integration

40
Q

What are the two main sources of legislation relating to money laundering?

A
  • Proceeds of Crime Act 2002 (POCA)
  • Money Laundering, Terrorist Financing, and Transfer of Funds Regulations 2017
41
Q

What is POCA enforced by?

A

NCA

42
Q

Term for money laundering offences assuming a criminal offence has been committed

A

Predicate Offence

43
Q

Maximum penalty for principal money laundering

A

14 years imprisonment and/or unlimited fine

44
Q

What mental state is required for someone to be found guilty of concealing under POCA?

A

Must actually know or suspect the property comes from criminal conduct

Subjective test

45
Q

General defences under Concealing:

A
  • Authorised disclosure by the offender (before act takes place, or during if conditions met)
  • Privilege excuses not disclosing (suspicion only)
46
Q

Disclosure should be made before money laundering takes place. If made after, what are the defences?

A
  • The person had no knowledge or suspicion before the act
  • The disclosure was made as soon as practicable after knowledge or suspicion acquired
  • Disclosure made of own initiative (not prompted by imminient discovery)
47
Q

Status of privilege if solicitor knows money laundering is taking place

A

Does not apply

48
Q

Status of privilege if solicitor suspects concealment (money laundering) is taking place

A

If suspicions correct, client communications not priviliged
If suspicions unfounded, client communications remain privileged

49
Q

Offence where defendant facilitates the acquisition, retention, use or control of criminal property on behalf of another person

A

Arrangement

50
Q

Type of litigation that constitutes arrangement

A

Sham litigation created for the purpose of money laundering

51
Q

Term that means a person cannot be charged if they paid a reasonable amount, in good faith, for a stolen bike if they did not know or suspect it was stolen

A

Adequate consideration

52
Q

Examples of money laundering methods:

A
  • Transfers between bank accounts
  • Buying and cashing in investments
  • Overpayment of tax
  • Depositing money with solictor or accountant then requesting refund
53
Q

What is the necessary mental state for committing the offence of failure to report?

A

Should have known or been suspicious

Objective test

54
Q

Two types of privilege

A
  • Legal advice privilege
  • Litigation privilege
55
Q

Defences to ‘failure to report’ offence

A
  • Privilege
  • Lack of training
56
Q

Two tipping off offences under POCA

A
  • Diclosing to a third party a suspicious activity report (SAR) has been made
  • Disclosing an investigation to a third party
57
Q

Exceptions to a tipping off offence

A
  • Normal enquiries about instructions and retainer
  • Language included in standard terms of engagement
58
Q

Defences against a tipping off offence

Who you can disclose to

A
  • Disclosures within an undertaking or group
  • Disclosures betwen institutions
  • Disclosure to supervisory body to prevent, investigate or prosecute an offence
59
Q

Characteristics of fellow legal professionals that permits disclosure and does not constitute a tipping off offence

A
  • Share common ownership, management or control
  • Carry on business in UK, an EEA state or country with similar ML requirements to EU
60
Q

Who is a legal professional permitted to disclose to?

A

Another legal professional

61
Q

Three elements that constitute prejudicing an investigation

A
  • Knows or suspects an ML investigation is taking place; and
  • Makes disclosure to someone likely to prejudice investigation; or
  • Falsifies, conceals or destroys relevant documents
62
Q

Defences against Prejudicing an Investigation

A
  • Did not know or suspect
  • Disclosure made in connection with legal proceedings
63
Q

Law firm procedures to prevent ML:

A
  • Customer due diligence procedures
  • Appointing a nominated officer/MLRO
  • Train client-facing employees
64
Q

Minumum firm recordkeeping after completion of business

A

Five years

65
Q

Nominated officer duties

A
  • Reporting to authorities
  • Training
  • Advising on how to proceed after SAR made
  • Designing and implementing anti-ML systems and policies
66
Q

SAR reporting line

A

MLRO > Deputy (if applicable) > NCA

67
Q

NCA notice period - time for NCA to respond following SAR submission

A

7 working days

68
Q

In what circumstances must due diligence be conducted? (DESO)

A
  • Doubt veracity or adequacy of documents
  • Establish a business relationship
  • Suspect ML or terrorist financing
  • Carry out occasional transaction (15k+ euros)
69
Q

Verification of client and beneficial ownership of assets must be completed before establishing relationship UNLESS

A
  • It is necessary not to interrupt business; and
  • Little risk of ML or TF

Does not apply to occasional transaction

70
Q

Why should a solicitor not report a suspicious client in bona fide litigation?

A

Maintaining client confidentiality trumps the obligation to report suspicion of ML

71
Q

Which Act provides the regulatory framework for financial services?

A

Financial Services and Markets Act 2002 (FSMA)

72
Q

Which body within the Bank of England regulates financial services firms?

A

Prudential Regulation Authority

73
Q

Body that regulates conduct of all financial services in the UK

A

Financial Conduct Authority (FCA)

74
Q

What status might a solicitor working in financial services look to obtain from the FCA?

A

Approved person status

75
Q

Regulated financial activities under FSMA 2000? (ADAMS)

A
  • Arranging
  • Dealing as Agent
  • Advising
  • Managing
  • Safeguarding
76
Q

Dealing with which items is outside the General Prohibition under FSMA?

A
  • Interests in land
  • National savings products (e.g. premium bonds)
77
Q

Which way of carrying on regulated activities is prohibited if not regulated?

A

If carried on by way of business

78
Q

Exclusions to Regulated Activities Order under FSMA (RATI)

A
  • ‘Reasonable Regarded as Necessary’ Exclusion (excl managing assets, cannot bill seperately)
  • Acting as representative
  • Takeover exclusion (client buying/selling 50%+ voting shares)
  • Introducing or acting through an authorised person
79
Q

Which regulated activity is not covered under the ‘Reasonable Regarded as Necessary’ Exclusion?

A

Managing assets

80
Q

Four components of defining a regulated activity

Specyspecybizex

A
  • Specified activity
  • Specified investment
  • Carried on by way of business
  • No exclusion applies
81
Q

Two components of a limited exemption under FSMA’s General Prohibition

Relevance of activity

Characteristic of person

A
  • Member of designated professional body
  • Incidental activity
82
Q

Firm requirements before dealing with Insurance Distribution Activities

A
  • Notify SRA
  • Be put on register of providers
  • Appoint an insurance distribution officer
83
Q

Defences to concealing if disclosure made during act

A
  • No relevant knowledge or suspicion when act was started
  • Disclosure made as soon as practicable after knowledge; and
  • Disclosure made by own initiative (not prompted by imminent discovery)
84
Q

Preparing any instrument relating to real or personal estate (e.g. contract for sale of land) can only be performed by a person authorised by a regulated provider of legal services. What reserved legal activity does it fall under?

A

Reserved Instrument Activities

85
Q

What are the five money laundering offences under POCA?

3 principal offences
2 apply to regulated sector

A
  • Concealing
  • Arranging
  • Acquiring/using/possessing
  • Failure to report
  • Tipping off

SQE1 (15 decks)

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