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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
Three types of civil proceedings where legal aid is available
- Housing disputes - Family proceedings - Debt proceedings
26
In which case can a party not be forced to pay other side's costs?
Party is legally aided
27
What must be demonstrated as part of a Merits Test for a party to receive Criminal Legal Aid
It is in the interest of justice for the party to receive funding (Cases heard in the Crown Court satisfy the test automatically)
28
In which case can direct discrimination be applicable if victim does not have a protected characteristic?
Discrimination due to association with someone with a protected characteristic
29
Which act provides guidelines for discrimination?
Equality Act 2010
30
Treating someone less favourably due to protected characteristic
Direct discrimination
31
Putting individuals with protected characteristics at a disadvantage
Indirect discrimination
32
Firms must ensure disabled people are not at a ...
Substantial disadvantage
33
In which cases can direct discrimination be justified?
Age and disability if proportionate means of achieving a legitimate aim
34
In which cases can indirect discrimination be justified?
Proportionate means of achieving a legitimate aim
35
What are the following examples of? - Ensuring clients can easily access premises - Providing sign language services - Providing specialist equipment for employees
Reasonable adjustments
36
Why might only limited adjustments be made by a firm?
Cost prohibitive
37
Three stages of money laundering
- Placement - Layering - Integration
38
Which money laundering stage provides legitimacy to criminally obtained funds e.g. property investment, gambling winnings, buying businesses
Integration
39
Which money laundering stages would a solicitor likely be involved in?
Layering and Integration
40
What are the two main sources of legislation relating to money laundering?
- Proceeds of Crime Act 2002 (POCA) - Money Laundering, Terrorist Financing, and Transfer of Funds Regulations 2017
41
What is POCA enforced by?
NCA
42
Term for money laundering offences assuming a criminal offence has been committed
Predicate Offence
43
Maximum penalty for principal money laundering
14 years imprisonment and/or unlimited fine
44
What mental state is required for someone to be found guilty of concealing under POCA?
Must actually know or suspect the property comes from criminal conduct ## Footnote Subjective test
45
General defences under Concealing:
- Authorised disclosure by the offender (before act takes place, or during if conditions met) - Privilege excuses not disclosing (suspicion only)
46
Disclosure should be made before money laundering takes place. If made after, what are the defences?
- 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
Status of privilege if solicitor knows money laundering is taking place
Does not apply
48
Status of privilege if solicitor suspects concealment (money laundering) is taking place
If suspicions correct, client communications not priviliged If suspicions unfounded, client communications remain privileged
49
Offence where defendant facilitates the acquisition, retention, use or control of criminal property on behalf of another person
Arrangement
50
Type of litigation that constitutes arrangement
Sham litigation created for the purpose of money laundering
51
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
Adequate consideration
52
Examples of money laundering methods:
- Transfers between bank accounts - Buying and cashing in investments - Overpayment of tax - Depositing money with solictor or accountant then requesting refund
53
What is the necessary mental state for committing the offence of failure to report?
Should have known or been suspicious ## Footnote Objective test
54
Two types of privilege
- Legal advice privilege - Litigation privilege
55
Defences to ‘failure to report’ offence
- Privilege - Lack of training
56
Two tipping off offences under POCA
- Diclosing to a third party a suspicious activity report (SAR) has been made - Disclosing an investigation to a third party
57
Exceptions to a tipping off offence
- Normal enquiries about instructions and retainer - Language included in standard terms of engagement
58
Defences against a tipping off offence | Who you can disclose to
- Disclosures within an undertaking or group - Disclosures betwen institutions - Disclosure to supervisory body to prevent, investigate or prosecute an offence
59
Characteristics of fellow legal professionals that permits disclosure and does not constitute a tipping off offence
- Share common ownership, management or control - Carry on business in UK, an EEA state or country with similar ML requirements to EU
60
Who is a legal professional permitted to disclose to?
Another legal professional
61
Three elements that constitute prejudicing an investigation
- 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
Defences against Prejudicing an Investigation
- Did not know or suspect - Disclosure made in connection with legal proceedings
63
Law firm procedures to prevent ML:
- Customer due diligence procedures - Appointing a nominated officer/MLRO - Train client-facing employees
64
Minumum firm recordkeeping after completion of business
Five years
65
Nominated officer duties
- Reporting to authorities - Training - Advising on how to proceed after SAR made - Designing and implementing anti-ML systems and policies
66
SAR reporting line
MLRO > Deputy (if applicable) > NCA
67
NCA notice period - time for NCA to respond following SAR submission
7 working days
68
In what circumstances must due diligence be conducted? (DESO)
- Doubt veracity or adequacy of documents - Establish a business relationship - Suspect ML or terrorist financing - Carry out occasional transaction (15k+ euros)
69
Verification of client and beneficial ownership of assets must be completed before establishing relationship UNLESS
- It is necessary not to interrupt business; and - Little risk of ML or TF Does not apply to occasional transaction
70
Why should a solicitor not report a suspicious client in bona fide litigation?
Maintaining client confidentiality trumps the obligation to report suspicion of ML
71
Which Act provides the regulatory framework for financial services?
Financial Services and Markets Act 2002 (FSMA)
72
Which body within the Bank of England regulates financial services firms?
Prudential Regulation Authority
73
Body that regulates conduct of all financial services in the UK
Financial Conduct Authority (FCA)
74
What status might a solicitor working in financial services look to obtain from the FCA?
Approved person status
75
Regulated financial activities under FSMA 2000? (ADAMS)
- Arranging - Dealing as Agent - Advising - Managing - Safeguarding
76
Dealing with which items is outside the General Prohibition under FSMA?
- Interests in land - National savings products (e.g. premium bonds)
77
Which way of carrying on regulated activities is prohibited if not regulated?
If carried on by way of business
78
Exclusions to Regulated Activities Order under FSMA (RATI)
- '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
Which regulated activity is not covered under the 'Reasonable Regarded as Necessary' Exclusion?
Managing assets
80
Four components of defining a regulated activity | Specyspecybizex
- Specified activity - Specified investment - Carried on by way of business - No exclusion applies
81
Two components of a limited exemption under FSMA's General Prohibition Relevance of activity | Characteristic of person
- Member of designated professional body - Incidental activity
82
Firm requirements before dealing with Insurance Distribution Activities
- Notify SRA - Be put on register of providers - Appoint an insurance distribution officer
83
Defences to concealing if disclosure made during act
- 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
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?
Reserved Instrument Activities
85
What are the five money laundering offences under POCA? ## Footnote 3 principal offences 2 apply to regulated sector
- Concealing - Arranging - Acquiring/using/possessing - Failure to report - Tipping off

SQE1 (15 decks)

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