Legal Services Flashcards
Legal Code of Conduct for Solicitors
p(1) - Maintaining trust and acting fairly
p(2) - Dispute resolution and proceedings before court, tribunals and inquiries
p(3) - Service and competence
p(4) - Client money and assets
p(5.1) - Referrals, introductions and separate business
p(5.4,6) - Other business requirements
p(6.1,2) - Conflict of interests
p(6.3,5) - Confidentiality and disclosure
p(7) - Cooperation and accountability
p(8.1) - Client identification
p(8.2,5) - Complaints handling
p(8.6,11) - Client information and publicity
- Client care letter (Para. 8) = Not a mandatory requirement.
Code of Conduct for Firms
- Applies to firms authorised by the SRA.
1) Para 8.1: A manager of a firm is responsible for the firms compliance with the Code. If there are other managers, this responsibility is joint and several with other managers.
2) Para 9: Comliance Officers: a law firlm will have a COLP and a COFA. In an ABS (i.e., a business not owned or run by solicitors) it is HOLP and HOFA.
a. (9.1) -> COLP , HOLP
b. (9.2) -> COFA , HOFA
SRA Regulation of Individuals and Firms
+ Firm authorisation :
Eligible business types :
- Recognised sole practice
- Recognised body
- Licensed body
Protected characteristics
- Race
- Religion
- Sex
- Sexual orientation
- Age
- Disability
- Transgender
- Marriage / Civil partnership (Only covers if you are legally married. Not just a fiancee.)
- Pregnancy and maternity
Prohibit conducts
- Direct discrimination : Overtly or obviously treating someone less favourably than the way you treat others because of their protected characteristics.
- It is always unlawful EXCEPT: age direct discrimination for legitimate aim. - Dual characteristics discrimination : EA 2010
- Disability discrimination
- Gender re-assignment
- Pregnancy and maternal leave - Indirect discrimination : When a policy or practice is put place which applies to everyone but adversely affects someone with a protected characteristics. No need written down.
- Defence : if it is proportionate means of achieving a legitimate aim. - Victimisation : When someone treats badly because that person has; brought a claim under EA 2010, gives evidence/information for that, does anything in relation to EA 2010. UNLESS they have done it in bad faith.
- No protected characteristics is needed for this one. - Harrassment
Limitation periods and remedies
- You must bring the claim in the COUNTY COURT (if withing a work context go EMPLOYMENT TRIBUNAL)
- 6 months of the alleged unlawful conduct. The court may allow a claim after this time if “just and equitable”
- Remedies : Damages, injuction, apology declaration
Proceeds of Crime Act 2002 (POCA)
- Creates the criminal offences for money laundering
- Lawyers can commit these offences
- Offences under POCA:
1) S327: Concealing, disguising, converting or transferring criminal property or removing criminal property from the UK. - Defences: Authorised disclosure to nominated officer and taken consent, Overseas defence: money occured outside the UK and conduct is not criminal in that country.
2) s328: Entering into or becoming concerned in an arrangement that the solicitor knows, or suspects, facilitates the acquisition, retention, use or control of criminal property by or on behalf of another person. - Defences: Authorised disclosue, Overseas defence
3) s329: Acquiring, using or possessing criminal property. - Defences : Authorised disclosure, Overseas defence
4) s330 Failure to disclose - Defences: Reasonable excuse defence (only public domain), Overseas defence, Solicitor does not know or suspects and has not been given required training.
5) s331: Nominated officer failure to disclosure - Defence: Reasonable excuse defence ( remember: only public domain)
6) s333A: Tipping off - Defence: tipping off was done with the genuine belief client will cooperate with authorities or to dissuade the client from committing money laundering in the first place.
Money Laundering Regulations 2007 (MLRs)
- Sets out the administrative burdens
- Obligations (failure to comply is a crimal offence):
1) MLR Risk Assesment
2) Client due diligence - Standard due diligence
- Simplified due dilgence : When there is low risk; public authority , resides in EU/UK/US, the client is a renowned bank, listed on London Stock Exchange
- Enhanced due diligence : high risk; terrorist financing, high risk jurisdiction (North Korea, Iran, Russia, Cuba), politically exposed person, false ID, other risky evidence
3) How and when to do CDD
4) Reporting requirements - Money Laundering Reporting Officer (MLRO)
- Nominated officer
- report -> MLOR’s review -> suspicious activity report to the NCA -> if the MLRO and the firm want to continue despite risk of money laundering -> submit DAML (defence against money laundering) to NCA -> the NCA has 7 working days to respond.
5) Policies under MLR
6) Screening, training, and audit requirements
7) Record keeping : for 5 years after completing of work for the client
Procedure after a report has been made under POCA or the MLRs 2017
Solicitor -> NO -> suspicious activity report (SAR) -> NCA
- If SAR is made, the NO cannot give consent unless:
- the NCA gives authorisation,
- having aapplied to NCA for authorisation, the NCA doesn’t hear back for 7 working days after the disclosure was made, or
- the NCA refuses and 31 days have expired (doesn’t apply to terrorsit financing - you can only proceed if you have express permission from the NCA)
Litigation Work
1) Private funding
2) Conditional fee arrangement (payment on the condition the case is won):
- Success fee must be expressed as a percentage increase of a solicitor’s normal fees (chargeable rate). VAT is then added to the total amaunt, after adding success fee.
- CFA must be valid: cannot be used familiy matters, must be writing, state the succes fee percentage, the success fee cannot be over 100% ıf the standard fees.
3) Damages based agreement: Only applies to the Claimant. If the C wins, the solicitor’s fees will be paid out of damages. If the C losses, no payment is made.
- If the Claimant wins, the Defendant will also have to pay costs. This is set off against the total the solicitor will receive under the DBA, and the Claimant pays the balance out of the damages award.
- For a DBA to be valid:
i) The total amount taken by the solicitor (including VAT) cannot exceed 50% of the damages awarded to the claimant; for PI, 25% and for employement cases 35%. Theses do not apply to appeal proceedings.
ii) The solicitor must give reasons how they reached that figure
iii) Must be in writing.
4) Legal expenses insurance:
i) Before the event insurance (BTE):
- BTE only covers the client’s own legal expenses.
- The insurer must accept the claim UNLESS the claim doesn’t have a good prospect of success (less than 50%) or concerns an issue that happened before the policy was taken out.
ii) After the event insurance (ATE):
- Covers the client’s disbursements and oppenent’s costs.
- ATE insurer will only provide cover if the client has a 60%+ chance of winning.
5) Third party funding: Often commercial funders.
- The funder will only take on the case if the client has a 60%+ chance of winning and will be paid a large amount in damages
Eligibility for legal aid
1) Civil Legal Aid:
+ Legal aid must be in scope: Homelessness, family cases with domestic abuse, discrimination cases, immigration, care proceedings, welfare appeals, special educational needs. Business cases and divorce are not within the scope.
+ Client must be eligible: Merit test and Means test.
i) Merit test: 50%+ chance of success (45%+ for public importance), damages likely to outweigh the legal costs, legal aid won’t be granted if the claimant can get other funding.
ii) Means test:
- client must have capital of 8k (3k for immigration case) or less; AND
- gross income of 2.657 per month or less; AND
- client must earn 733 or less a month in disposable income
- if the claimant receives any benefits, they will automatically have legal aid UNLESS their capital is above 8k
- They will still have to contribute to their legal costs if; their monthly disposable income is abore 315 OR their capital is above 3k
2) Criminal Legal Aid:
+You must be eligible to receive a representation order: Interest of justice test and Means test.
i) Interest of justice test:
- automatically met if the client is under 18 or the case is a crown court trial; or
- must be in the interests of justice.
ii) Means test:
- automatically met if the client is under 18 or receives any benefits.
- Otherwise;
! Adjusted income: 12,475 or less -> MC: funded, CC: funded
! Adjusted income: 12,475-22,325 -> MC: If disposale household (annual) income is 3,398 or less funded, CC: If disposale household (annual) income is 3,398 or less funded / If disposale household (annual) income is 3,398-37,500 eligible but must contribute
! Adjusted income : 22,325 or more -> MC: ineligible, CC: ineligible / if disposale household (annual) income less than 37,500 eligible but must contibute / If disposale household (annual) income is 37,500 or more ineligible.
FSMA Decision Tree
Step 1: The general prohibition
+ Law firms cannot carry out regulated activities.
+ Regulated activity = Specified investment + Specified activity
Step 2: Is it a specified investment?
- Stocks and shares in private or public (ltd or plc) companies
- Loans and bonds (issued by companies)
- Government bodies (gilts)
- Credit agreements/loans (as lenders)
- Funeral plans
- Unit trusts and OEICs
- Insurance policies and insurance distribution
- Mortgagesand and equity realase plans
Step 3: Is it a specified activity?
- Dealing as agent
- Arranging
- Managing
- Safeguarding (must be administration of the investment)
- Advising (must be specific to a certain product and company or seller)
Step 4: Does an exclusion apply to the activity? If yes, no further steps to take
- Dealing as agent: Authorised third person (ATP): the transaction is eneterd into on advice given by an ATP, Execution only: solicitor has given no advice on the merits of investment but just deals with its signing/execution, Professional/Necessary: activity is a reasonable necessary part of a solicitor’s job, Takeover: if the client is buying or selling at least 50% of shares in a ltd/plc company.
- Arranging: Introducing: solicitor merely introduces the client to a third party and has no further role, ATP, Execution-only, Professional/Necessary, Acting as a trustee/PR: solicitor must actually be a trustee or PR, Takeover
- Managing: Acting as a trustee/PR
- Safeguarding: Professional/Necessary, Acting as a trustee/PR
- Advising: Professional/Necessary, Acting as a trustee/PR, Takeover
* Exclusions won’t apply:
- Receives a fee + doesn’t tell
- For any insurance work
Step 5: Does the s327 exemption apply and Scope Rules?
+ In order for s327 apply the following conditions must be satisfied:
- Person carrying on regulated activity is a solicitor
- Solicitor must not receive a commission unless they account to the client
- Specified activity must be incidental to the firm’s legal work
- Firm must abide by the Scope Rules and SRACOB at all times
