LS4: Regulation Flashcards
Which body is responsible for regulating chartered legal executives?
CILEX Regulation
What must chartered legal executives comply with?
The CILEX Code of Conduct
What are the 9 principles contained within the CILEX Code of Conduct?
- uphold the rule of law and the impartial administration of justice
- maintain high standards of professional and personal conduct and justify public trust in you, your profession and the provision of legal services;
- behave with honesty and integrity;
- comply with your legal and regulatory obligations and deal with your regulators and ombudsmen openly, promptly and co-operatively;
- act competently in the best interests of your client and respect client confidentiality;
- treat everyone fairly and without prejudice;
- ensure your independence is not compromised;
- act effectively and in accordance with proper governance and sound financial and risk management principles; and
- protect client money and assets.
CILEX Code of Conduct: 1.1 and 1.2
“You must:
1.1 Understand and comply with your primary and overriding duty to the court, obey court orders and do nothing which would place you in contempt.
1.2 Not knowingly or recklessly allow the court to be misled.”
What is the punishment for going against the Code of Conduct, issued by CILEX Regulation’s Disciplinary Tribunal?
Fines of up to £100,000 for CILEX members
If a chartered legal executive works in a law firm regulated by the SRA, which regulations should they follow?
Both the CILEX Code of Conduct (as they are a CLE) AND the SRA Standards (as they’re working in a company who uses them).
What are the usual complaints to CILEX Regulation about?
Either behaviour or service provided.
What is the CILEX CPD and what must members and fellows of CILEX do every year?
Continuing Professional Development.
Oct - Sept, must complete an online logbook of planned (training webinars) and unplanned (learnt on the job + self-evaluation) activities.
CILEX Regulation are now able to regulate legal practices run by whom?
Legal practices run by:
CLE litigators and advocates
Conveyancing practitioners
Probate practitioners
Immigration practitioners
Other Authorised Persons (incl. solicitors)
Which personnel must legal practices (or entities) appoint by CILEX Regulation?
An approved manager
A compliance manager
An accounts manager
(one person may have more than one role)
Managers must demonstrate competence in practice and accounts management.
What are the functions of the Solicitors Regulation Authority?
○ setting the standards for qualifying as a solicitor;
○ drafting rules of professional conduct;
○ providing ethical guidance;
○ administering the solicitors’ roll;
○ investigating complaints against solicitors and prosecuting them in the Solicitors’ Disciplinary Tribunal; and
○ where necessary, closing down law firms to protect the public.
Which principles do the SRA Standards and Regulations include?
You act:
○ in a way that upholds the constitutional principle of the rule of law, and the proper administration of justice;
○ in a way that upholds public trust and confidence in the solicitors’ profession and in the legal services provided by authorised persons;
○ with independence;
○ with honesty;
○ with integrity;
○ in a way that encourages equality, diversity and inclusion; and
○ in the best interest of each client.
What can the SRA impose as a punishment?
Disciplinary sanctions, including fines of up to £2,000 on individual solicitors or firms.
What do the SRA Standards and Regulations include?
7 mandatory principles
SRA Code of Conduct for Solicitors
SRA Code of Conduct for Firms
SRA Accounts Rules
What does the SRA set out for solicitor’s continuing professional development?
In the ‘statement of solicitor competence’ which defines the ‘continuing competences’ for all solicitors, it includes:
‘Maintain the level of competence and legal knowledge needed to practise effectively, taking into account changes in their role and/or practice context and developments in the law…’
A ‘threshold standard’ is linked with the statement, which sets out the levels of competence and legal knowledge to be expected of a newly-qualified solicitor.
What must a solicitor do every year for their CPD?
They must make an annual CPD declaration that they have considered their learning and development needs for that CPD year, including the SRA website ‘continuing competence toolkit’ and the website’s help on maintaining a ‘development record’ of learning and development activities.
Who are barristers regulated by?
The Bar Standards Board (BSB) using the Code of Conduct for Barristers.
What does the BSB Code of Conduct for Barristers state?
The Code of Conduct covers rights of audience, advertising and relationships with solicitors.
The Core Duties set out in the Code require barristers
- not to discriminate unlawfully against anyone.
- provide a competent standard of work to each client.
- not act in a way which brings the profession into disrepute.
They should act with:
- honesty
- integrity
- and be bound by a duty of confidentiality to the client.
-barrister must observe their duty to the court in the administration of justice.
What is the Legal Services Board and what are its 8 objectives?
It has the overall responsibility of overseeing legal activities in England and Wales.
It is independent of the government and works with the approved regulators of the different branches of the legal profession to meet the following regulatory objectives set out in s1(1) Legal Services Act 2007.
(1) Protecting and promoting the public interest. (2) Supporting the constitutional principle of the rule of law. (3) Improving access to justice. (4) Protecting and promoting the interests of consumers. (5) Promoting competition in the provision of services provided by lawyers. (6) Encouraging an independent, strong, diverse and effective legal profession (7) Increasing public understanding of the citizen’s legal rights and duties. (8) Promoting and maintaining adherence to (following of) professional principles.
What does the Office for Legal Complains supervise?
The Legal Ombudsman – a body which is required to resolve complaints about legal services free of charge for individuals, small businesses, charities, clubs and trusts.
What does the Legal Ombudsman do and who are the personnel?
It aims to resolve complaints quickly and informally and can require both parties to co-operate. It can award up to £50,000 in compensation.
It is staffed by a chief ombudsman and three ombudsmen. Complainants must try to resolve their complaints with the legal professional concerned before using the Legal Ombudsman.
What is the Financial Conduct Authority (FCA)?
It is the regulator for the provision of financial services in the UK.
What does the FCA do and what is its relevance to the legal profession?
The FCA regulates the activity, rather than a particular profession; a list of regulated activities is found in the Financial Services and Markets Act 2000, includes services such as advising on investments and providing credit references.
Some of the work undertaken by the legal profession is also considered a regulated activity by the FCA.
- For example, if you were acting for a client in the purchase of a house, and there was some defect in the title (a potential source of liability for the purchaser), you might arrange indemnity insurance on your client’s behalf. The purchase of the indemnity insurance is a regulated financial activity.
What must a provider of legal services do if they want to undertake regulated financial activity?
A provider of legal services either needs to be registered with the FCA under the Financial Services Act 2021, or be covered by an exemption.
○ There is an exemption under the SRA Financial Services (Scope) Rules, which permits those regulated by the SRA to provide financial services which are incidental to the provision of legal services.
○ The example above in relation to arranging indemnity insurance in the course of conveyancing would be covered by the exemption.
The exemption does not operate if the financial service is unconnected to the provision of legal services.
○ For example, a law firm would not be covered by the exemption if they started offering loans or dealing in shares.
What happens if two or more principles of the SRA come into conflict?
The principle taking precedence is the one which best services the wider public interest in the circumstances.
Code of Conduct for Solicitors?
Code of Conduct for Solicitors
1.1-1.4: Maintaining trust and acting fairly (1.1, 1.2, 1.4)
2.1-2.7: Dispute resolution and proceedings before courts, tribunals and inquiries (2.1, 2.4, 2.5, 2.7)
3.1-3.6: Service and competence (3.3, 3.6)
4: Client money and assets
Business requirements:
5.1-5.3: Referrals, introductions and separate businesses
5.4-5.6: Other business requirements
Conflict, confidentiality and disclosure:
6.1-6.2: Conflict of interests (6.1, 6.2)
6.3-6.5: Confidentiality and disclosure
7: Cooperation and accountability
When you are providing services to the public or a section of the public:
8.1: Client identification (Who is the client?)
8.2-8.5: Complaints handling
8.6-8.11: Client information and publicity
What is the handling of personal data regulated by?
The UK General Data Protection Regulation (GDPR) and the Data Protection Act 2018.
What is the definition of personal data?
Any data that relates to an identifiable individual?
What are controllers of personal data and what must they comply with?
Most legal practices collate and use data, therefore are controllers.
Controllers must comply with the data protection principles and other UK GDPR requirements.
They must also register with the Information Commissioners Office (ICO) to notify them that they are using personal data.
What are the 7 key data protection principles from the GDPR that must be followed when processing personal data?
Where personal data is held it must be:
○ processed lawfully, fairly and transparently;
○ processed for a specific purpose;
○ limited to necessary data (i.e. you should not hold data that it is not needed);
○ accurate;
○ not kept for longer than necessary;
○ kept securely; and
○ controlled by someone who is accountable for that data and takes responsibility for complying with the other principles.
What are the consequences of a cybersecurity attack for the client and the firm?
The consequences of a successful cyber attack can be devastating for clients, potentially including the loss of their home.
The consequences for firms which fail to safeguard their clients’ money and data from cyber attack can be correspondingly severe and firms can ultimately be shut down for such failures.
What have criminals used law firms as and what has been done to avoid this?
Law firms have been used by criminals to convert the cash proceeds of crime into legitimate investments, such as property.
As a result, lawyers, together with other professionals such as accountants, are required by the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and the Proceeds of Crime Act 2002 (as amended) to carry out certain identity checks before carrying out work for clients.
The money laundering legislation imposes the specific nomination of which job?
A Money Laundering Reporting Officer
What must be done with client money under CILEX Regulation Accounts Rules and SRA Accounts Rules?
Paid directly into the client account and kept separate from the firm accounts.
What happens if a cheque is received representing both client money and money to pay a bill?
It must first be paid into the client account before the cash to pay the bill (assuming it has been approved) can be transferred.
When can the firm get paid by a client and how?
When the firm submits a bill for its work (which may include expenses (disbursements)) and it has been approved by the client, the fee earner is able to transfer the sums concerned from the client account to the office account.
