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SQE - FLK1 > Legal Services / Ethics > Flashcards

Legal Services / Ethics Flashcards

1
Q

What is the role of the Law Society?

A

Represent solicitors by negotiating with and lobbying regulators, government etc

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2
Q

What is the role of the Legal Ombudsman

A

Deal with all complaints about the services provided by legal professionals from the CLIENTS WHO RETAINED THEM

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3
Q

What is the role of the SRA?

A

Any complaint about legal professionals that does not concern the SERVICE provided (e.g. breaching code of conduct)

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4
Q

What are the two tests that must be applied whenever assessing an application for Legal Aid representation order?

A
  1. Merits (interests of justice) test
  2. Means test
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5
Q

How is dishonesty assessed when evaluating solicitors’ conduct (2 points)?

A
  1. D’s knowledge or belief about the facts
  2. Applying standards of ordinary, decent people
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6
Q

5 key duties under the SRA Code of Conduct?

A
  1. Not unfairly discriminate
  2. Not abuse your position by taking unfair advantage
  3. Perform all undertakings in a timely fashion
  4. Not attempt to mislead others
  5. Honesty and confidentiality
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7
Q

What is the ethical limitation on making demands for yourself or your client?

A

Cannot demand anything that is not legally recoverable

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8
Q

3 rules relating to client money under the SRA Code of Conduct?

A
  1. Properly ACCOUNT for any financial benefit you receive as a result of client instructions
  2. SAFEGUARD money and assets entrusted to you by clients and others
  3. NOT PERSONALLY HOLD client money save as permitted under SRA Account Rules
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9
Q

3 points regarding limitations on advertising?

A
  1. Cannot make unsolicited approach to members of the public
  2. Can advertise to the public generally if not intrusive or targeted
  3. Businesses and individuals acting as company representatives are NOT usually considered members of the public
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10
Q

3 overarching duties on complaints handling?

A
  1. Establish and maintain, or participate in, a procedure for handling complaints
  2. Bring procedure to client’s attention at the outset, and provide a copy on the requesr
  3. Investigate complaints and offer remedies if necessary PROMPTLY, FAIRLY and FREE OF CHARGE
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11
Q

2 complaints-related information you must provide to client at the outset of the matter?

A
  1. Right and procedure for complaining about service and charges
  2. Right to complain to the Legal Ombudsman
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12
Q

When must the solicitor inform the client of their right to complain to the Legal Ombudsman or other ADR-approved body?

A

Both at the outset of the matter, and if a complaint has been made and not resolved to the client’s satisfaction within eight weeks of first being made

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13
Q

What are the four requirements for you to act for multiple clients where this poses a significant risk of conflict?

A
  1. EITHER (i) substantially common interest or (ii) competing for the same objective
  2. ALL clients given written informed consent
  3. Appropriate safeguards in place to protect confidential client information
  4. You are satisfied that it is reasonable
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14
Q

What is the definition of clients “competing for the same objective”?

A
  1. Where if one client attains the objective, it will become UNATTAINABLE to the other client(s).
  2. Objective means an ASSET, CONTRACT OR BUSINESS OPPORTUNITY
  3. Competion means insolvency auction, tender, bid or offer process

Public takeover is EXCLUDED

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15
Q

3 requirements to keep a financial benefit received as a result of acting for a client?

A
  1. You can JUSTIFY
  2. You have informed the client of the AMOUNT
  3. Client has AGREED that you can keep it
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16
Q

When can you act for a client with an adverse interest to another former or existing client of your firm? (2 pts)

A
  1. Effective measures have been taken resulting in there being NO REAL RISK OF DISCLOSURE
  2. The other client has given WRITTEN INFORMED CONSENT to you acting and any other measures taken to protect information
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17
Q

What happens when there is a conflict between the duty of confidentiality and disclosure?

A

The duty of confidentiality is paramount. You should not act for a client to whom you cannot disclose material information unless safeguards (e.g. ethical walls) are in place

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18
Q

3 key safeguards if you refer the client to another person?

A
  1. Inform them of any FINANCIAL INTEREST in the referral (including any relevant FEE SHARING arrangement)
  2. Agreement is in WRITING
  3. You cannot make or receive referral payments for clients who are subject to CRIMINAL PROCEEDINGS
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19
Q

What is the general rule when referring client to, or dividing a matter with, a separate business?

A

Need client’s informed consent

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20
Q

What additional duty do you have as a solicitor carrying on RESERVED LEGAL ACTIVITIES in a non-commercial body?

A

Ensure the body maintains INDEMNITY INSURANCE that provides ADEQUATE AND APPROPRIATE COVER in respect of the services you provide

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21
Q

Procedural precaution with solicitor’s undertaking?

A

Always give in writing or attach a written note of the undertaking to the client’s file

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22
Q

Deadline to fulfill solicitor’s undertaking?

A

Within an AGREED TIMESCALE or if not agreed, then within a REASONABLE AMOUNT OF TIME

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23
Q

Why must you be very careful when giving any solicitor’s undertaking?

A

It remains binding according to its original terms even if it is to do something impossible, or contingent, or outside your control - unless the recipient agrees to its variation or discharge

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24
Q

What is the solicitor’s conduct rule surrounding questioning of character in court (2 pts)?

A
  1. Do not name THIRD PARTIES in OPEN COURT whose character would thereby be called into question
  2. Do not question a witness’ character unless it is NECESSARY and the witness has had the OPPORTUNITY TO ANSWER allegations during cross examination
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25
Q

Definition of a disability?

A
  1. Physical or mental impairment
  2. With a substantial and long-term adverse effect on his ability to carry out normal day-to-day activities
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26
Q

How can discrimination based on a protected characteristic be justified?

A

PROPORTIONATE means of achieving a LEGITIMATE AIM

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27
Q

What is the extent of the duty to make reasonable adjustments?

A

To ensure that disabled persons are not placed at a substantial disadvantage, and have an active diversity committee with written records

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28
Q

What are Legal Disciplinary Practices?

A

Law firms involving up to 25% non-lawyers as approved by the SRA but still providing legal services

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29
Q

What is the main innovation introduced by Alternative Business Structures?

A

Allow external or part-ownership of legal businesses and multi-discplinary legal practices?

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30
Q

When can the client bring a complaint to the Legal Ombudsman?

A

If solicitor fails to satisfactorily resolve the complaint after 8 weeks

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31
Q

6 RESERVED LEGAL ACTIVITIES?

A
  1. Rights of audience
  2. Conduct of litigation (issuance onwards)
  3. Preparing, applying for or lodging reserved instruments
  4. Probate activities (note: NOT will-making)
  5. Notarial activities
  6. Administration of oaths
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31
Q

Limitation period for complaints to Legal Ombudsman (3 points)?

A
  1. One year from ACT/OMISSION
  2. One year from when the client should REASONABLY HAVE KNOWN that there was cause for complaint
  3. If service provider responded in full to the complaint, six months of that WRITTEN RESPONSE
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32
Q

What is the restriction regarding services offered by freelance solicitors?

A

Only solicitors qualified for over 3 years can provide reserved legal services

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33
Q

3 administrative restrictions on freelance solicitors?

A
  1. Cannot hold client money unless held for paying fees and disbursements
  2. Cannot employ staff IF they provide reserved legal services
  3. Must hold adequate and appropriate professional indemnity assurance IF they provide reserved legal services
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34
Q

When does a legal matter become contentious?

A

Only once formal dispute proceedings have been issued

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35
Q

What is the maximum chargeable uplift on a CFA?

A

If client is successful:
* Maximum 100% uplift on profits OR
* I PI cases, maximum 25% of damages recovered

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36
Q

What are the caps on payment for a DBA?

A
  1. 25% for PI cases
  2. 35% for employment
  3. 50% in all other claims
37
Q

3 requirements for CFA to be enforceable?

A
  1. In writing
  2. Signed by the client
  3. State how success fee will be payable and assessed
  4. Include solicitor’s normal rates
38
Q

What are solicitor’s options if client fails to make an interim payment?

A

Terminate the retainer and submit a final bill

39
Q

3 requirements for a valid fixed-fee arrangement?

A
  1. In writing
  2. Embodies all the terms of the agreement
  3. Is reasonable in amount and in lieu of ordinary profit costs
40
Q

How often should an interim bill be delivered?

A

Every 6 months, if it is not possible to estimate the costs

41
Q

3 requirements to sue on a bill of costs?

A
  1. SIGNED BILL OF COSTS in the PROPER FORM has been served within a REASONABLE TIME of concluding the matter
  2. Expiration of ONE MONTH from delivery
  3. Bill of costs must be FINAL (not interim)
42
Q

Different treatment of interest between contentious and non contentious proceedings?

A

Contentious - no interest can be claimed BEFORE ISSUE OF PROCEEDINGS unless previously agreed

Non-contentious - interest claimable from one month after delivery

43
Q

When may High Court permit a solicitor to recover costs before expiry of one month from delivery?

A

Probable cause for delivering that client is about to do any act that would tend to PREVENT OR DELAY solicitor obtaining payment (e.g. leave UK, become bankrupt)

44
Q

When must a client apply for assessment in the High Court rather than County Court?

A

Where costs are wholly NON-CONTENTIOUS or BELOW 5,000 GBP

45
Q

What are client’s two remedial options for bills in non-contentious work?

A

If not linked to poor service - apply to court for detailed assessment

If linked to poor service - Legal Ombudsman

46
Q

What are client’s two remedial options for bills in contentious work?

A

If linked to reasonableness or proportionality - apply to court for detailed assessment

If linked to adequacy of costs information - Legal Ombudsman

47
Q

When will a detailed assessment always be rejected by the court?

A

Over 12 months has passed AND bill was paid

48
Q

When is client always entitled to detailed assessment?

A

Within one month of bill being paid

49
Q

When must solicitor pay the barrister’s fees?

A

Within 30 days after they send out their invoice

50
Q

3 requirements to cease acting for a client?

A
  1. Good reason
  2. Reasonable notice
  3. Provide alternative options to pursue the matter
51
Q

When may you act for a client even though another solicitor is already acting for him in respect of the same matter (3 pts)?

A
  1. Retainer is terminated
  2. First solicitor consents to second solicitor acting in his place
  3. You are just giving a second opinion
52
Q

2 requirements to validly exclude liability to your client?

A
  1. Cannot fall below the COMPULSORY MINIMUM COVER required under the SRA Indemnity Insurance Rules
  2. Specifically draw the exclusion to client’s attention in writing
53
Q

2 obligations of a solicitor on termination of the retainer? Exception?

A
  1. Deliver all papers and property to which client is entitled or hold them to his order
  2. Account for all client funds being held by the solicitor
54
Q

When can solicitor exercise common law lien over client’s property? Is the lien unfettered?

A

Client must be given sufficient information to calculate the amount owing (including interest, costs, disbursements and VAT)

Not unfettered: court has statutory jurisdiction to order solicitor to deliver up client’s papers even though a lien exists

55
Q

2 alternatives to exercising a lien over papers?

A

Apply to the court for a CHARGING ORDER over PERSONAL PROPERTYof the client recovered or preserved by the solicitor within LITIGATION PROCEEDINGS, to recover solicitor’s TAXED COSTS for those proceedings
OR
Ask court to grant EQUITABLE LIEN if they hold nothing of value from the client

56
Q

What is the minimum level of PII cover for solicitors’ firms? Is this always sufficient?

A

At least 2 million for one claim, or 3 million for a LLP

Not always sufficient: SRA requires level of cover to always be ADEQUATE AND APPROPRIATE so firms must consider top-up cover

57
Q

When must freelance solicitors obtain adequate and appropriate PII?

A

When they provide RESERVED LEGAL SERVICES TO the public

58
Q

What 2 consequences ensue when a firm cannot obtain qualifying insurance?

A
  1. 30-day extended indemnity period: can continue to practice while trying to obtain qualifying insurance
  2. 60-day cessation period: cannot accept new instructions, can only perform work in connection with existing instructions
59
Q

What is the merits test for legal aid? What are the three “bands” of merits?

A

Applicant must demonstrate a NOT LESS THAN 50% chance of success

  1. Below 45% = poor likelihood of success and test fails
  2. 45-50% - marginal likelihood; must have public interest or overwhelmingly important to applicant
  3. > 50% - likely to pass test
60
Q

When must you apply to Director of Legal Aid Casework for Exceptional Case Funding? When will ECF be granted?

A

Where the civil proceedings fall outside the scope of legal aid.

Where the risk of breaching the applicant’s ECHR rights so demands.

61
Q

What are the 3 components of the means test?

A
  1. Income
  2. Disposable capital
  3. Resources of the partner UNLESS the partner has a contrary interest in the dispute
62
Q

When can a D be assured of free representation in court?

A
  1. Imprisonable offence OR already in CUSTODY
  2. Representation is at their FIRST COURT APPEARANCE
63
Q

When is a person entitled to have the duty solicitor present at a police interview?

A

When the interview is being conducted with a suspect UNDER CAUTION

64
Q

When is the merits or IoJ test automatically satisfied for legal aid in criminal cases?

A
  1. Crown court trials (EXCEPT appeals to the CC)
  2. Applicants under 18 years of age
65
Q

What does an INITIAL means test assess?

A

Gross household income weighted to take into account family circumstances

66
Q

What does a FULL means test assess?

A

Gross household income combined with: (1) ALLOWABLE OUTGOINGS and (2) WEIGHTED LIVING ALLOWANCE

67
Q

What is the key difference between MC and CC cases for legal aid?

A

All Ds in CC are eligible for legal aid, but they must meet the financial conditions - if they contribute towards legal costs, they will be refunded at the end if NG.

In contrast, for MC, they are either eligible or not (in which case they mut pay privately)

68
Q

When can an applicant appeal if his Legal Aid application is rejected by the MC for failing to meet the IoJ requirements?

A

After he makes a written request for a reconsideration (“administrative review”) which is declined

69
Q

What is direct discrimination?

A

A treats B less favourably than others because of a protected characteristic OR an ASSOCIATION with someone who has a protected characteristic

70
Q

What is indirect discrimination?

A

Where A applies to B a practice which: (1) is applied to other persons who do not share the protected characteristics (2) it puts persons with that characteristic at a particular disadvantage; and (3) it is not a proportionate means of achieving a legitimate aim

71
Q

3 points about the duty to make reasonable adjustments?

A
  1. Ensure that disabled persons are not placed at a substantial disadvantage compared to non-disabled persons
  2. Cannot pass on the costs of adjustments to the disabled persons
  3. Owed only to the disabled person and not his associates
72
Q

What is the general prohibition?

A

All businesses are prohibited from conducting investment-related activities unless: (1) authorised by the FCA OR (2) exempt from the requirement for authorisation

73
Q

53 penalties for breaching the general prohibition?

A
  1. Criminal offence
  2. Agreements made in breach will be unenforceable without court consent
  3. Automatic civil right to damages for private clients who suffered loss due to the breach
  4. FCA prevention order
  5. SRA disciplinary action
74
Q

3 common ways law firms become involved in investment-related activities?

A
  1. Conveyancing (insurance, mortgage)
  2. Corporate transactions (MYA)
  3. Trust which includes investments
75
Q

3-step test for an FSMA-regulated activity? What is the conclusion if one of the steps is not met?

A
  1. Carried on by way of BUSINESS
  2. Specified INVESTMENT
  3. Specified INVESTMENT ACTIVITY

If one of these three requirements is not met, the general prohibition does not apply?

76
Q

What are 3 key examples of specified investments?

A
  1. Securities (shares, debentures, unit trusts)
  2. All insurance contracts
  3. Derivatives
  4. Regulated mortgage contracts
77
Q

What is the effect of an RAO exclusion?

A

The relevant investment activity will not constitute a “regulated investment activity” and will thus be excluded from the general prohibition

78
Q

7 major EXCLUDED investment activities with respect to securities?

A
  1. Accepting deposits
  2. Dealing in investments as principal
  3. Dealing in investments as agent
  4. Arranging deals in investments
  5. Managing investments
  6. Safeguarding and administering investments
  7. Advising on investments
79
Q

3 major EXCLUSIONS for RMCs?

A
  1. Arranging RMC
  2. Advising on RMC
  3. Administering an RMC
80
Q

4 major RAO EXCLUSIONS for IDAs?

A
  1. Arranging
  2. Managing
  3. Assisting with administration and performance
  4. Safeguarding and administering
81
Q

Which two investment activities are never EXCLUDED with respect to IDAs?

A
  1. Dealing as agent
  2. Advising on IDAs

Note: generic advice on IDAs, and related legal or tax issues, is permit

82
Q

What is the implication for a law firm if it carries on an investment activity that is not subject to any RAO exclusion?

A

That investment activity will be REGULATED - meaning that it must either obtain authorisation or be exempt, to carry on the activity without breaching the general prohibition

83
Q

2 requirements to be exempt from FCA regulation?

A
  1. EITHER: (a) investment business activities are INCIDENTAL to their main professional business or (b) their services DO NOT REQUIRE FCA protection for reasons of INVESTOR PROTECTION OR MARKET INTEGRITY
  2. Profession is supervised by a DESIGNATED PROFESSIONAL BODY
84
Q

What is the importance of the SRA Scope Rules?

A

They set out the SCOPE of the regulated activities that law firms may undertake under the FSMA exemption, and the activities that law firms cannot carry out without authorisation

85
Q

What is the importance of the SRA Conduct of Business Rules? Consequences of breach?

A

Every Designated Professional Body that supervises a profession pursuant to the FSMA exemption must issue RULES OF CONDUCT about how a business may carry on exempt activities.

Breach is not a criminal offence but could lead to disciplinary action by the SRA

86
Q

What is the basic test for an exempt investment activity under thE SRA Scope Rules?

A
  1. Must be COMPLEMENTARY to the legal work under the retainer
  2. Must be INCIDENTAL to the legal work (including as a proportion of legal fees)
  3. Must ACCOUNT FOR COMMISSIONS received to the client
87
Q

What are the additional 2 restrictions that apply to IDAs under the SRA Scope Rules?

A
  1. Firms can only carry on IDAs as an ancillary insurance intermediary
  2. They cannot carry on any IDAs unless they are (a) registered in the Financial Services Register AND (b) have appointed an insurance distribution officer
88
Q

Name two generic activities that fall within the FSMA exemption?

A
  1. Any transaction advice which does NOT amount to a recommendation to positively buy or sell (e.g. negative advice, explaining the transaction)
  2. Endorsing or passing on an ATP’s advice
89
Q

How is a “financial promotion” defined under the FSMA? Example?

A
  1. Communicating an INVITATION or INDUCEMENT
  2. In the course of BUSINESS
  3. To engage in INVESTMENT ACTIVITY

E.g., preparing an IPO

90
Q

3 important exemptions allowing non-ATPs to carry out financial promotions?

A
  1. Introducing client to an ATP or exempt person
  2. Communicating to an ATP or other investment professional
  3. One-off non-real time communications and solicited real time communications

SQE - FLK1 (21 decks)

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