Legal Services Flashcards
What is classified as specified investments?
Specified investments are defined in financial services legislation:
- shares
- gilts
- instruments creating or acknowledgement indebtedness (bonds)
- regulated mortgage contracts
Common examples:
- rights under a contract of insurance
- shares
- pensions
- bonds
What is not included:
- investment property
- land
What advice concerning specified investments is prohibited?
Only specific advice concerning specified investments is prohibited
If a solicitor provides generic advice, there are unlikely to have breached financial services regulations
If a solicitor advises a client on investment advice in land for property development purposes, is this likely to constitute a breach of financial services regulations?
No because the advice is generic and land is not a specified investment
When is a fixed fee arrangement most appropriate?
When a case is relatively straightforward and the solicitor is able to accurately estimate how much time they are likely to spend on the case
What is harassment?
Harassment occurs when a person is subjected to unwanted conduct that relates to protected characteristics and this violates the victim’s dignity, or creates an intimidating, hostile, degrading or humiliating environment
Example:
- offensive and humiliating jokes constitute harassment
What steps must the nominated officer do after there has been a disclosure to them of a concern about money laundering?
The nominated officer should have made a Suspicious Activity Report to the National Crime Agency as soon as practicable
Nominated officer has a legal duty to make a Suspicious Activity Report to NCA as soon as practicable
What are solicitors’ duties to report concerns of money laundering under POCA?
The solicitor is under a duty to report any concerns to the firm’s nominated officer
A solicitor is deemed to have discharged their obligations if they disclose concerns to the nominated officer
- the nominated officer then makes a report to NCA
- if the solicitor has informed the nominated officer, they have not committed a failure to make a Suspicious Activity Report as it is the duty of the nominated officer to make such reports to NCA
What must a solicitor do if they become aware of a potential case of harassment?
The solicitor must notify the SRA of the alleged harassment and may inform the firm’s Compliance Officer for Legal Practice
The SRA requires solicitors to report promptly to SRA any facts or matters they reasonably believe are capable of amounting to serious breaches
What are the limits to qualify for civil legal aid (means test)?
- Limit on disposable income is £733 or less
- Limit on gross income is £2,657
- Limit for disposable capital is £8,000
Exercising rights of audience
Is a reserved legal activity which requires a practising certificate
- if a solicitor no longer has a practising certificate, they cannot exercise rights of audience
A solicitor has been instructed to act in the purchase of a residential home. The clients will require a substantial mortgage and they do not have a mortgage broker. They need advice as to which mortgage product is most suitable for them and would like the firm to arrange for it to be put in place. The firm will charge separately for this service. The firm is not authorised by the Financial Conduct Authority.
How can the solicitor may carry out the transaction for the clients, without being in breach of the general prohibition under Financial Services and Markets Act 2000 (FSMA 2000)?
The solicitor should rely on authorised person exclusion
- they cannot rely on ‘activities carried out in course of profession’ because the solicitor wishes to charge separately
What is a condition of the authorised person exclusion in regards to commission earned?
The solicitor must account to the client for any commission or financial benefit received
What should be included in a costs letter for a private retainer letter to a client who is self-funded on hourly rate?
- hourly rate of the conducting fee earner
- an estimate of profit costs which is subject to review
- details of likely disbursements
- both of which are stated to be subject to VAT
Both profit costs and disbursements should be shown
