legal services Flashcards

Question

Unspecified/unregulated investments not generally caught by FCA regime

Answer 1

deposits, national savings and investments, rights under a pension scheme, chattels, art, gold, stamps, vintage cars.

Answer 2

Conditions: 1. the regulated activity arises out of or is complementary to legal work, 2. the regulated activity is incidental to the legal work and 3. the solicitor must account to the client for all commissions (any sum)

Answer 3

Can be an ancillary insurance intermediary if: 1. principal profession activity is something else, 2. products are complementary to products and services 3. does not cover life or liability insurance, unless it's complementary to the company's goods and services Must apply to be registered in the FSR, have an insurance distribution officer OR MLRO could be registered.

Answer 4

Criminal legal aid: public funding available for representation in Magistrates and crown court. Advice at police station: single fixed fee Duty solicitor scheme: rota to attend magistrates court, claiming costs under the Advocacy Assistance scheme Application for legal aid: if a client has been charged they must apply for legal aid. Granting depends on merits of the case and financial means. Merits/interest test: must demonstrate that it is in the interest of justice that they receive funding e.g they are likely to suffer serious damage, loose likelyhood or reputation, a substantial question of law, they are unable to state their own case, the proceedings could involve e.g. witnesses, it is in the interest of another person that the charged have representation. Means test: under 18 and on welfare benefits automatically fulfills the test. Eligible if adjusted annual income is under 12 457, full means test must be undertaken if under 22 325 and not eligible in magistrates court if over 22 325, but a means test in the crown court.

Answer 5

Civil legal aid: must demonstrate that their case has merit and only available in limited circumstances. Types: Legal help: advice, controlled work. Help at court: advice + assistance incl. Advocacy. Controlled work Legal representation: available to a client starting proceedings. Licensed work. Not available for e.g. personal injury, family and divorce. Not usually available is a CFA. Merits test: clients prospects of success and cost-benefit Means test: capital (not over 8000) and income (not over 2600 per month). Statutory charge: if the client wins, the solicitor could still charge to get their fees covered.

Answer 6

Yes, as long as SRA principles are adhered to (idependent, client's best interest, public trust and uphold justice), NO referral fees are allowed unless client must be informed about any financial or other interest (prohibited for cases regarding claims for damages due to personal injury or death) Client is informed about any fee sharing arrangement, agreement is in writing, solicitor does not receive payment client has not been acquired in a way that breaches SRA rules.

Answer 7

Yes. e.g. info overheard at the pub must be brought to the client if relevant for the clients case.

Answer 8

Disability: can bring a claim under s. 13 or the separate s. 15 which prevents unfavorable treatment due to a disability.

Answer 9

Victimization: does not need to have a protected characteristic to fall under s. 27 and be protected against detriment from discrimination. The victimiser must bring detriment on the victim, meaning that the victim is put at a disadvantage or worse situation.

Answer 10

Harassment under s. 26 occurs when an individual is subject to unwanted conduct (related to a protected characteristic or sexual) which violates their dignity or creates an intimidating, hostile, degrading, humiliating or offensive environment.

Answer 11

SRA Financial services rule Prohibited activities Firms (including sole practices) authorised by the SRA may carry on certain regulated financial services activities without being regulated by the FCA if they can meet the conditions in section 327 of FSMA. The purpose of these rules is to set out the scope of the regulated financial services activities that may be undertaken by firms authorised by us and not regulated by the FCA. These rules do not apply to solicitors, RELs or RFLs practising outside firms authorised by us. Prohibited activities include: Activities under FSMA Manage investments Advertise insurance Recommend personal pension scheme Advice to be part of a Lloyds syndicate Enter into a regulated credit agreement as a lender Exercise lenders rights Enter into a regulated consumer hire agreement as owner Operate electronic system for lending Provide credit reference Insurance distribution activities Create, develop, design or underwrite insurance contracts

Answer 12

Regulated by Financial services and markets act FSMA + Financial services act 1. is the firm carrying out business 2. does the transaction involve a specific investment 3. is the investment regulated under part 2 and does an exclusion apply.

Answer 13

Specified investment under FSMA: 1. Securities Shares or stock Instruments creating or acknowledging indebtness e.g. bonds Government and public securities Instruments giving entitlement to invest Units in a collective investment scheme 2. relevant investments Long-term insurance contracts Options incl. buying and selling of securities Funeral plan contracts 3. structures deposits 4. Others Deposits Regulated mortgage contracts From FSMA Art. 5 accept Deposits: does not cover deposits to solicitors. At. 10 affecting and carrying out contracts of insurance: a solicitor must not assist in the administration and performance of a contract for insurance. Cannot e.g. fill in claim form, notify an insurer of a claim on behalf of the client or received funds on behalf of the policy holder. Art. 14 Buying or selling securities as a principal. Art. 21 dealing in investments as agent Art. 25 arranging deals in investments. Excluded: arrangement that does not lead to transactions, introducing a client to an authorised or exempt person Exclusion for authorised third person: arranging a deal on behalf of a client after the client has received advice from an ATP (does not apply to insurance or life policies) Exclusion for execution-only clients: arranging a deal through an ATP where the solicitor has refused assistance or the client has not sought advice from solicitor. (does not apply to insurance or life policies) Art. 37 Managing investments. Exception for PRs, trustees and nominees that can manage investments as long as day-to-day tasks are managed by an authorised person. Art. 40 Safeguarding and administration of investments. Exmptions for trustees, PRs and nominees for reasonably required work. Art. 53 advising on investments. Exemptions: generic advise generally without specifying which particular investment would be suitable + obtaining advice on behalf of a client from an ATP OBS insurance: neither the introducing nor APT exemptions above cover contracts of insurance or life policies. Separate exclusion in art. 72 where the solicitor can provide information that is incidental to his main profession, generic advice or rely on exception for arrangement that does not lead to a deal. Art. 61 mortgage lending, administration, advice and arranging Ar. 70 excludes activities for the sale of corporate bodies where: The share are at least 50% of the voting shares (or if less if gives the buyer the day-to-day control over running the company's affairs, e.g. the other shareholders are fragmented) Each of the parties to the transaction are corporate bodies, partnership, single individual or a group of connected individuals Exempt regulated activities (falling outside of the scope of the FSMA) The general exemption in Part XX FSMA for professional firms whose activities are incidental to their main business or who provide services which do not require FCA protection for reasons of investor protection or market integrity, provided the profession is supervised by a designated professional body. The regulated activity must arise out of or be complementary to other professional services. If undertaken, you have a duty to account for any commission, activity cannot be prohibited by SRA. Agent employed by an authorised person as the employers authorisation covers him Tied agents that only sell products for a specific company as the autorised person (company) will be responsible for the work carried out by its agents.

Answer 14

Exempt regulated activities (falling outside of the scope of the FSMA) The general exemption in Part XX FSMA for professional firms whose activities are incidental to their main business or who provide services which do not require FCA protection for reasons of investor protection or market integrity, provided the profession is supervised by a designated professional body. The regulated activity must arise out of or be complementary to other professional services. If undertaken, you have a duty to account for any commission, activity cannot be prohibited by SRA.

Answer 15

SRA or COLP (compliance officer for legal practice). If COLP chooses not to report to SRA but a lawyer believes there is a breach, the lawyer still has a duty to follow up further.