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SQE1 !!! > Legal Services > Flashcards

Legal Services Flashcards

1
Q

What are the 7 regulated providers of Legal Services?

A 
SRA
Bar Standards Board
CILEX
Intellectual Property Regulation Board
Council of Licensed Conveyancers
Costs Lawyer Standards Board 
Master of the Faculties
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2
Q

What is the role of the SRA?

A

Regulates solicitors and law firms in England and Wales, non-lawyers who are managers or employees of regulated firms and registered foreign lawyers

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3
Q

What is the role of the Bar Standards Board?

A

Regulate barristers

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4
Q

What is the role of CILEx?

A

Regulate legal executives

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5
Q

What is the role of the Intellectual Property Regulation Board?

A

Regulate patent and trademark attorneys

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6
Q

What is the role of the Council of Licensed Conveyancers?

A

Regulate individuals and firms which specialise in property and probate transactions

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7
Q

What is the role of the Cost Lawyer Standards Board?

A

Regulate lawyers who specialise in the preparation of bills and schedule of costs

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8
Q

What is the role of the Master of the Faculties?

A

Regulate notaries

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9
Q

What are the 5 reserved legal activities?

A 
Exercise of the right of audience 
Conduct of litigation 
Reserved instrument activities 
Probate activities
Administration of Oaths
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10
Q

What is the exercise of a right of audience?

A

Having the right to appear in and address a court including to call and examine a witness

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11
Q

What is the conduct of litigation?

A

Issuing and defending proceedings

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12
Q

What are reserved instrument activities?

A

Preparing a transfer of charges
Applying and lodging documents under the Land Registration Act
Preparing any other instrument relating to real or personal estate

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13
Q

What are probate activities?

A

Preparing probate papers or court documents relating to probate proceedings

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14
Q

What is the administration of oath?

A

Administering an oath or taking affidavits

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15
Q

When does the SRA require a firm to implement professional indemnity insurance?

A

When they provide reserved legal activities

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16
Q

Where can a firm find the requirements for professional indemnity insurance?

A

Professional Indemnity Rules

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17
Q

What are the requirements for professional indemnity insurance for firms?

A

Minimum coverage is confirmed in the Professional Indemnity Rules
Firms must ensure that insurance coverage is adequate and appropriate

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18
Q

What considerations allow firms to determine what is adequate and appropriate professional indemnity cover?

A 
Must consider:
Type of client 
Valuer if matters taken on each year
Transparency of information provided to clients about insurance cover
Claims history for firm
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19
Q

When would the SRA intervene with regards to professional indemnity insurance?

A

When the firm cannot show they have considered the required factors

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20
Q

What are the insurance requirements for freelance solicitors if they are not carrying out reserved legal activities?

A

They do not need authorisation as a sole practitioner firm with the SRA and therefore do not have an obligation to provide indemnity insurance.

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21
Q

What is a freelance solicitor?

A

Someone who practices in their own (with no employees) and their clients pay them directly.

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22
Q

What are the insurance requirements for a freelance solicitor carrying out reserved legal activities?

A

Must have 3 years post-qualification experience

Must not hold client money

Must take out and maintain adequate and appropriate insurance

note:
Do not need to purchase insurance on the SRAs minimum terms but need to notify the SRA that they are acting as a freelance solicitor

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23
Q

What are the insurance requirements for solicitors in an non-commercial body (charities)?

A

The solicitor must ensure that the body takes out and maintains indemnity insurance with adequate and appropriate coverage

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24
Q

What are the 2 methods of funding non-litigation matters?

A

Private retainer and funding

Fixed fee financing

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25
Q

What are the requirements of a private retainer and funding?

A

In writing
Contain all the relevant terms
Signed by the client

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26
Q

How is a private retainer and funding billed?

A

Solicitor will usually ask for a sum up front ‘on account’ to cover any disbursements. The solicitor will then invoice costs and disbursements on a monthly basis

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27
Q

What is fixed fee financing?

A

A fixed fee will be agreed with the client at the outset.

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28
Q

If a client is quoted £100 for legal fees, can VAT then be charged on completion?

A

No, if VAT was to be charged in addition this would have had to be specified from the outset.

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29
Q

What are the types of funding for litigation?

A 
Private funding
Conditional Fee Agreement
Damages Based Agreements 
Third Party Funding
Legal Expenses Insurance
Union Cover
Civil Legal Aid
Criminal Legal Aid
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30
Q

What is private funding in a litigation matter?

A

The client pays their own legal fees

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31
Q

What is a conditional fee agreement within a litigation matter?

A

If the case is successful, solicitor can charge their fee with a percentage uplift
OS responsible for normal fees and client liable for uplift.
If not successful client will not pay costs but still be liable for OS costs and disbursements and their own disbursements

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32
Q

What are the limitations to a conditional fee agreement in a litigation matter?

A

The success fee cannot exceed 100% of the normal fees charged
Cannot be charged in family proceedings

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33
Q

What is a damages based agreement in relation to a litigation matter?

A

Contingent on the success of the claim and recovery of damages
If nothing recovered - nothing can be paid
If claim is successful, the solicitors standard time costs can be recoverable from the losing defendant

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34
Q

What are the percentage limitations to a damages based agreement in a litigation matter?

A

Personal Injury - 25%
Non Personal Injury - 50%
Of sum recoverable excluding future losses

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35
Q

What is the definition of success for damages based agreements?

A

This will be determined at the outset when agreeing the funding method.

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36
Q

What is third party funding in a litigation matter?

A

When a third party covers the cost of legal fees and disbursements but not the other sides costs.
The funded will usually expect to make a profit from funding (usually between 15-45%

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37
Q

What are the 3 types of legal expenses insurance?

A

Before the event insurance
Designated solicitor
After the event insurance

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38
Q

What is before the event insurance?

A

Usually offered through car or home insurance and the insurer will pay the solicitor’s legal costs.

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39
Q

What is a designated solicitor in legal expense insurance?

A

Such policies require the use of a designated solicitor.

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40
Q

What is a solicitors obligation to check before agreeing a fee arrangement with a client?

A

That they do not have any insurance policies that would cover their fees - even if this means they cannot take on the case.

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41
Q

What is after the event insurance?

A

Taken out after an accident or event giving rise to a claim occurs.
In exchange for insurance premiums, the insurance company will pay the cost of disbursements.
Most cover the risk of having to pay costs to the other side if the claimant is unsuccessful.

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42
Q

What is union cover in a litigation funding matter?

A

If a client is a member of a union, they may have entitlement to legal expense cover as part of their union subscription.

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43
Q

What is civil legal aid?

A

Might be available if the client is on low income.

The funding is only available through firms contracted to the legal aid agency.

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44
Q

What are the two tests required for civil legal aid?

A

Financial Eligibility Test

Merits Test

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45
Q

What is the Financial Eligibility Test for civil legal aid?

A

Depends on the individual circumstances such as income, savings, family circumstances etc

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46
Q

What is the merits test for civil legal aid?

A

It must appear the the claim has good prospects for success.

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47
Q

What are the limitations to civil legal aid?

A

Only available in very limited circumstances (e.g housing disputes, family and debt issues)

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48
Q

Can civil legal aid be withdrawn?

A

Yes if there is a change to the merits of the case and the opponent may rise concerns about the conduct.

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49
Q

Can a legally aided party be forced to pay costs?

A

No not theirs or the other sides costs

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50
Q

What is criminal legal aid?

A

Defendants in criminal cases can apply for public funding of their costs.

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51
Q

What are the 2 criteria for criminal legal aid?

A

Means test

Merits test

52
Q

What is the means test for criminal legal aid funding?

A

The clients finances are considered including household income, savings and outgoings.

53
Q

When would a means test not be required for criminal legal aid?

A

If the defendant is under 18 or receive certain benefits

54
Q

Would a defendant be required to make a contribution towards costs in a crown court if benefitting from legal aid?

A

Sometimes depending on income.

55
Q

What is the merits test in criminal legal aid?

A

The client has to show that it is in the interests of justice for them to receive funding e.g. substantial question of law, client likely to lose livelihood and whether a client unable to present their own case

56
Q

When would the merits test not be required on a criminal legal aid case?

A

Cases held at the Crown Court

57
Q

What do the SRA principles confirm in respect of the Equality Act 2010?

A

Solicitors are required to act in a way which encourages equality, diversity and inclusion.

58
Q

What are protected characteristics under the Equality Act?

A 
Age
Disability
Gender reassignment
Marriage and civil partnership 
Pregnancy and maternity 
Race
Religion and belief
Sex 
Sexual orientation
59
Q

What is direct discrimination?

A

Treating a person less favourably than someone else because they have a protected characteristic.

60
Q

What is indirect discrimination?

A

When a policy or provision is apparently neutral but on closer inspection puts individuals with a protected characteristic at a disadvantage than those who do not have that characteristic.

61
Q

What are justifications for discrimination under the Equality Act?

A

There must be a wider policy reason for discrimination.
For indirect discrimination, the discriminator must justify any indirect discrimination by showing it has the proportionate means of achieving a legitimate aim.

62
Q

What can a firm absolutely not discriminate on?

A

Against a person requesting legal advice by not providing them with that service, offering a service on different terms or subjecting the person to any other detriment.

63
Q

What are a firms obligations to make reasonable adjustments?

A

Firms have a legal obligation to provide reasonable adjustments to ensure that disabled clients and employees are not placed at a substantial disadvantage.

64
Q

Who should cover the cost of reasonable adjustments?

A

The firm - these cannot be passed to others.

65
Q

What are the 3 stages of money laundering?

A

Placement
Layering
Integration

66
Q

What is the stage of placement?

A

Cash is generated from crime and is placed into the financial system. Banks have developed systems so the criminal must find another way.

67
Q

What is the stage of layering?

A

Once the proceeds are in the financial system, layering involves obscuring the origin of the proceeds by passing them through complex transactions.

68
Q

What is the goal in the stage of layering?

A

Losing an audit trail making it difficult for the authorities to trace proceeds.

69
Q

What is the stage of integration?

A

Once the origin has been obscured, the criminal is able to make the funds appear legitimate and these will be placed into a business or purchase a property.

70
Q

What are the 4 direct money laundering offences?

A

General
Concealing
Arrangement
Acquisition, Use or Possession

71
Q

What is the general offence for direct involvement in money laundering?

A

Firms are required to implement systems of work to detect and prevent money laundering activities.

72
Q

What is the Act which covers money laundering offences?

A

Proceeds of Crime Act (POCA)

73
Q

What is the further offence under the POCA?

A

Conspiracy, aiding and abetting.

74
Q

What is the penalty for general offence for direct involvement of money laundering?

A

Maximum penalty of 14 years imprisonment and/or unlimited fine.

75
Q

What is the money laundering offence of concealing?

A

An offence to conceal, disguise, convert or transfer criminal property or remove criminal property from the UK.
Concealing also relates to the source, location, ownership etc of the property not just the nature.

76
Q

What is criminal property?

A

Any property derived from criminal conduct such as money or property etc.

77
Q

What would be an offenders mental state in an offence of concealing?

A

The offender has to subjectively ‘know or suspect’ that the criminal property represented a benefit from criminal conduct.

78
Q

What would constitute a defence to the offence of concealing?

A

Authorised disclosure by the offender - an authorised disclosure can be made of the transfer to the police, a customs office or a nominated officer in an organisation. Disclosure needs to be before act takes place or if not a good reason why not.

79
Q

Does a clients privilege excuse not disclosing an act of concealing?

A

Sometimes. It does not apply if a solicitor knows the transaction they are working on is an offence. If suspicions, are correct communications with the client are not privileged.

80
Q

What is the direct money laundering offence of arrangement?

A

Covers arrangement which the defendant knew or suspected, facilitated by acquisition, retention, use or control of criminal property by or and behalf of another person

81
Q

Does arrangement include ordinary conduct of litigation by a legal professional?

A

No, including any step taken from litigation from issue of proceedings up to its final disposal by judgement.

82
Q

When would litigation be an offence under arrangement?

A

Where sham litigation is created for the purposes of money laundering.

83
Q

What are the defences for arrangement?

A

Authorised disclosure by the offender - an authorised disclosure can be made of the transfer to the police, a customs office or a nominated officer in an organisation. Disclosure needs to be before act takes place or if not a good reason why not.

84
Q

What is the direct money laundering offence of acquisition, use or possession?

A

It is an offence to acquire, use or have possession of criminal property.

85
Q

What are the defences to acquisitions, use or possession?

A

Same as concealing and arrangement.
Further defence added of adequate consideration - a person cannot be charged if they paid a reasonable amount to use the criminal property in good faith.

86
Q

What are the 3 indirect money laundering offences?

A

Failure to report
Tipping off
Prejudicing an investigation.

87
Q

What is the indirect money laundering offence of failure to report?

A

Solicitors have obligations to make disclosures of suspicious of money laundering.

88
Q

What is the report filed when a solicitor has suspicions of money laundering?

A

Suspicious activity report

89
Q

What are actions would cause a suspicious activity report to be filed?

A

Transfers between bank accounts
Buying investments or cashing them in
Overpayment of tax
Depositing money with a solicitor or an accountant, then requesting the return of the funds.

90
Q

What information would be considered when deciding whether to report a money laundering offence?

A

Any information coming to the solicitor in the course of business and not just relating to client and their affairs. Reports regarding potential clients, acquisition targets and even employers of businesses the solicitor is dealing with.

91
Q

What is the timing of a required disclosure when reporting a money laundering offence?

A

As soon as possible, it might be acceptable to delay if the solicitor takes legal advice and they act promptly after seeking such advice.

92
Q

Is there a requirement for the offender to have know they are failing to report?

A

The offence can be committed if a person should have known or been suspicious.

93
Q

What are the defences to failure to report?

A

Privilege - information that falls into privilege that has not been excluded by Money Laundering rules.
Lack of training - employees of firms who have no knowledge or suspicion of money laundering.

94
Q

What are the 2 types of tipping off?

A
  1. Disclosing to a third person there has been suspicious activity report made.
  2. Disclosing an investigation to a third party.
95
Q

How can an offence of tipping off occur?

A

In writing or orally and can be direct or indirect.

96
Q

What are the exceptions to the offence of tipping off?

A

Normal Enquiries about Instructions and Retainer and Language Included in the Standard Terms of Engagement

97
Q

What are the defences to the offence of tipping off?

A

Disclosures within an Undertaking or Group, Disclosures between Institutions and Additional Permitted Defences.

98
Q

What is the defence of Disclosures within an Undertaking or Group in the offence of tipping off?

A

If a person discloses to a fellow employee, officer or partner involved in the same undertaking that a SAR has been made. Also a defence if disclosure is made to another legal professional in a different undertaking provided they share a common ownership or carry on business in a country that imposes Money Laundering requirements equivalent to the European Union.

99
Q

What is the defence of Disclosures between Institutions to the offence of tipping off?

A

The disclosure is made to another legal professional in a European Economic Area state, the disclosure relates to a client or former client, made for the purpose of presenting a money laundering offence and both parties have equivalent professional duties off confidentiality and protection of personal data.

100
Q

What is the indirect money laundering offence of prejudicing an investigation?

A

If a person knows or suspects that a money laundering confiscation or civil recovery is being conducted makes a disclosure to any person that is likely to prejudice the investigation or falsifies, conceals or destroys documents relevant to the investigation or causes that to happen.

101
Q

What are defences to prejudicing an investigation?

A

Person Making Disclosure Did Not Know or Suspect - if the person did not know the disclosure would be prejudicial
Disclosure Made in Connection with Legal Proceedings - giving legal advice or to any person in connection with legal proceedings or contemplated legal proceedings provided the disclosure is made with the intention of furthering a criminal purpose.

102
Q

What do the Money Laundering Regulations 2017 outline?

A

Customer due diligence rules that requires professionals to know their clients and to monitor the use of their services by clients.

103
Q

What are the types of activities where there is a risk of money laundering?

A

Buying and selling property and business entities
Managing client money, securities or other assets
Opening or managing bank, savings or securities accounts
Organising contributions necessary for the creation, operation or management of companies
Creating, operating or managing trusts, companies, foundations or similar structures

104
Q

What are the types of activities not covered by the Money Laundering Regulations?

A

Payment on account of costs
Provision of legal advice
Participation in litigation or a form of ADR
Will-writing
Work funded by the Legal Services Commission

105
Q

What procedures are a firm responsible for establishing under the MLR 2017?

A

Creating and applying customer due diligence procedures
Appointing a money laundering reporting officer
Establishing systems and procedures to forestall and prevent money laundering and terrorist financing
Providing client facing individuals with training in money laundering/terrorist financing.

106
Q

What is a Money Laundering Report Officer?

A

They will receive disclosures under POCA and make disclosures to NCA. This should be an appropriately experienced individual and should be of sufficient seniority to make decisions on reporting.

107
Q

What are the roles of a Money Laundering Reporting Officer?

A

Reporting to the authorities
Training within the business
Advising how to proceed once an SAR has bee made in order not to tip off or prejudice an investigation
Designing and implementing internal anti-money laundering systems and procedures.

108
Q

What is the process of reporting to the MLRO?

A

The individuals have the responsibility for reporting to the MLRO - responsibility cannot be transferred to anyone no matter how junior or senior they are.

109
Q

What should happen when the Money Laundering Officer is away?

A

Best practice to appoint a deputy however if no deputy, the individual must report to the NCA directly and no wait for the MLRO to report.

110
Q

What are a firms responsibility under customer due diligence?

A

Businesses must adopt identification and verification measures.

111
Q

What must do in order to comply with customer due diligence?

A

Identify the client and verify their identity such as name, address using a passport or driving licence.
Identify whether there is a beneficial owner who is not the client and take the steps so they can confirm who the beneficial owner is.
Obtaining information on the purpose and intended nature of the business relationship.

112
Q

When must a solicitor conduct customer due diligence?

A

Establish a business relationship
Carry out an occasional transaction (15,000 euros or more)
Suspect money laundering or terrorist financing
Doubt the veracity or adequacy of documents, data or information previously obtained for the purpose of CCD.

113
Q

When must CCD be carried out?

A

Before establishing relationships.

114
Q

What is the exception to CCD being carried out at the outset of a transaction?

A

Verification may be established as soon as practicable after first contact is established, during the establishment of the relationship if:
it is necessary not to interrupt the normal course of business
There is little risk of money laundering or terrorist financing.

115
Q

What are the training requirements on customer due diligence?

A

A training to relevant staff needs to contain content on the law, such as ‘red flags’ that staff should be aware of and how to deal with transactions which might be related to money laundering and terrorist financing.

116
Q

How often should training be undertaken for CCD?

A

A matter for each business to consider.

117
Q

What is the goal of the Financial Services and Markets Act 2000 as amended by the Financial Services Act 2012?

A

To help make sure banks and other financial institutions have good management so they don’t make bad investments or too many risks.

118
Q

What is the role of the Bank’s Prudential Regulation Authority?

A

Regulate and supervise financial service firms.

119
Q

What is the role of the financial conduct authority?

A

Regulate the conduct of all financial services firms in the UK.

120
Q

Who are the financial conduct authority?

A

An independent body that is accountable to the HM Treasury, although it works very closely with the Prudential Regulation Authority.

121
Q

What activities are regulated under the FMSA?

A 
Advising
Arranging
Dealing as Agent
Managing
Safeguarding
122
Q

What is the activity of advising under the FSMA?

A

Giving advice to an investor or potential investor on the merits of buying, selling, subscribing for or underwriting a particular investment.

123
Q

What is the activity of arranging under the FSMA?

A

Making arrangements for another person to buy, sell, subscribe for, or underwrite a particular arrangement,

124
Q

What is the activity of dealing as agent under the FSMA?

A

Buying, selling, subscribing for, or underwriting investments as agent for a client.

125
Q

What is the activity of managing under the FSMA?

A

Managing assets belonging to another person in circumstances which involve the exercise of discretion.

126
Q

What is the activity of safeguarding under the FSMA?

A

Safeguarding assets belonging to another and administering them.

127
Q

What investments are regulated under the FSMA?

A 
Insurance contracts
Shares in a company and other securities
Debentures
Mortgage Contracts
Pension schemes
Funeral Plans

SQE1 !!! (16 decks)

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