M XIII Flashcards
A solicitor acting in a client’s matter needs to pass the client’s file to financial advisers to deal with investment elements of the matter. The solicitor happens to own a firm of financial advisers, and the solicitor intends to pass the client’s file to this firm. The solicitor believes it is in the client’s best interests to use this firm of financial advisers.
Do the rules of professional conduct allow the solicitor to pass the client’s file to the firm of financial advisers?
Yes, because the firm of financial advisers is owned by the firm of solicitors.
Yes, provided the solicitor obtains the client’s informed consent to do this.
Yes, because the solicitor believes that doing so is in the client’s best interests.
No, because this would demonstrate a lack of integrity.
No, because this would create a conflict of interest.
(B) A solicitor is permitted to refer the clients to their separate business as long as they have the client’s informed consent to do this. Informed consent means the solicitor should tell the client about their interest in the separate business. (A) and (C) are incorrect because informed consent from the client is required. (D) and (E) are incorrect because referring a client to a separate business is permitted with informed consent, and there are no other facts indicating that the solicitor is acting without integrity, or that this would create a conflict of interest.
(B) A solicitor is permitted to refer the clients to their separate business as long as they have the client’s informed consent to do this. Informed consent means the solicitor should tell the client about their interest in the separate business. (A) and (C) are incorrect because informed consent from the client is required. (D) and (E) are incorrect because referring a client to a separate business is permitted with informed consent, and there are no other facts indicating that the solicitor is acting without integrity, or that this would create a conflict of interest.
At the last election, a Labour government was elected. At that election, the Labour Party’s manifesto contained a commitment to radically reform trade union law, giving trade unions considerably more power than before. To implement this commitment, the House of Commons passes the Trade Union Reform Bill. However, the House of Lords has concerns about the Bill.
Which of the following best describes how the House of Lords can respond to the Bill?
Refuse to consider the Bill.
Grant the Bill a Second Reading, but seek to pass amendments to the Bill at later stages of the process.
Block the legislation once, and if passed a second time by the House of Commons, attempt to block the Bill again
Instruct the Monarch not to grant Royal Assent to the Bill.
Request that the Privy Council consider whether the Bill should become law.
(B) The House of Lords must grant the Bill a second reading, although it can seek to amend the Bill later in the legislative process. In this situation, the government is seeking to enact legislation that implements a manifesto commitment that they made at the last election. This means that the House of Lords is expected to comply with the Salisbury Convention. Under the Salisbury Convention, the House of Lords cannot block a bill that implements a manifesto commitment. Instead, the Lords will grant the legislation a Second Reading as a matter of course. However, the Lords retain the right to make amendments at later stages of the legislative process. (A) and (C) are incorrect because, for the reasons discussed, the Lords must grant a Second Reading to the Bill, rather than prevent it from becoming law. (D) and (E) are incorrect because those procedures do not exist.
A woman agreed to sell her friend a puppy. The purchase price was paid, and the puppy delivered on the same day. The day after the puppy was delivered, the woman promised her friend that the puppy had a good temperament and was excellent around children. A week later the puppy badly bit the friend’s daughter, who required hospital treatment.
Is the woman’s promise enforceable?
No. Equity would intervene in a case like this and prevent the friend from suing the woman after the contract had been concluded.
Yes. The promise constituted a representation that the puppy was suitable to be around children.
No. As it was made after the contract for sale was concluded, there was no consideration to support it.
Yes. The requirement that the puppy was safe around children was a term of fundamental importance that goes to the root of the contract.
Yes. It must have been in the contemplation of both the woman and the friend that the puppy needed to be safe around children.
(C) The woman’s promise is not enforceable, as it was made after the contract had been concluded and performed. There is therefore no consideration to support the promise. To be valid, consideration must be provided by both parties to be valid, and therefore additional consideration would have had to be provided by the friend to support the promise. (A) is incorrect because equity would not interfere in an executed contract where there has been no breach. Equity is ‘the gloss on the common law’ and primarily provides additional remedies where damages would be insufficient, such as, injunctions and specific performance. This is not relevant in the present case, as there has been no breach of the original contract. (B) is incorrect because representations are statements made prior to a contract being concluded to induce a party to enter into it. The promise here was made after the contract was formed. Similarly (D) and (E) are also both incorrect as the contract was concluded and performed before the promise was made. Therefore the promise did not constitute a term of the contract, nor is there any evidence that it was in the contemplation of both the woman and the friend that the puppy needed to be safe around children.
A company has been advised by an Insolvency Practitioner to enter a Company Voluntary arrangement (‘CVA’). The company owes the following amounts as unsecured debts:
£50,000 to creditor 1
£22,000 to creditor 2
£4,000 to creditor 3
£2,000 to creditor 4
Which of the following correctly represents the creditors who must vote in favour of the proposals for the CVA to be approved?
All the creditors must vote in favour.
Creditors 1, 3, and 4.
Creditors 2, 3, and 4.
Creditor 1 only.
(E) Approval of a CVA requires the agreement of the company’s unsecured creditors holding at least 75% in value of unsecured debt. If such approval is obtained, the Practitioner’s proposals become binding on every ordinary unsecured creditor. Creditors 1 and 2 are needed to hit the 75% threshold. (A) is incorrect as not all the creditors must vote in favour-it is sufficient to have only 75% in value. Thus, creditors 3 and 4 need not vote in favour. (B) and (C) are incorrect because although these choices include 75% of the number of creditors, together they do not hold 75% of the outstanding debt, which is what is required. (D) is incorrect because although creditor 1 is the largest creditor, alone it does not hold 75% in value of the debt.
A woman runs a catering business. She cooks on an electric grill. She was catering for an event and had purchased 20 steaks at £5 each. She expected to sell them for £10 each. Unfortunately, the grill malfunctioned and all the steaks were burnt. She lost the cost of the steaks and the expected profit. She was also unable to use the grill at the next event she had booked, and so lost the £500 profit she expected to make there. The shop at which she purchased the grill has gone out of business, but she has been able to trace the manufacturer. Tests have shown that the grill malfunctioned because of a lack of proper care in the manufacturing process.
In an action by the woman against the manufacturer, which of the following best states the likely outcome?
The woman will not be able to recover any of the losses which she suffered because they are all pure economic loss.
The woman will be able to recover the original cost of the burnt steaks only.
The woman will be able to recover the original cost of the burnt steaks and the profit she expected to make on them, but not the lost profit from the next booking.
The woman will be able to recover all of her losses: the original cost of the burnt steaks, the profit she expected to make on them, and her lost profit from the next booking.
The woman will not be able to recover any of the losses which she suffered because she did not buy the grill direct from the manufacturer.
(C) The woman will be able to recover everything except the lost profit from the next booking. The woman is owed a duty of care by the manufacturer in respect of the damage to the steaks and the consequential loss of profit on them. The facts show that the duty has been breached, causing her damage. However, a manufacturer does not owe a duty of care in respect of the cost of damage suffered by a defective product acquired by the claimant. This is classed as pure economic loss. So, the claimant cannot recover her loss of profit on the next booking resulting from the malfunctioning grill. (A) is incorrect because not all of the losses are unrecoverable as pure economic loss, as discussed above. (B) is incorrect because the lost profit on the steaks is also recoverable as consequential economic loss from the damage caused by the defective product. (D) is incorrect because the lost profit on the next booking is pure economic loss and so is not recoverable in tort. (E) is incorrect because the manufacturer does owe the woman a duty of care in tort in respect of the damage to her property, as explained above. (If the woman had bought the grill from the manufacturer, she would have had a claim in contract, where pure economic loss is recoverable.)
Two international companies are long-time clients of a firm. Each client intends to bid for the same third company and has approached the firm to act on its behalf in the process. Separate teams of individuals within the firm would act for each client, and each client’s team would not have access to the other client’s files. After the firm fully explains the situation to the clients and reasonably believes that the clients understand the issues and risks involved, each client confirms in writing that it wants the firm to act.
Which of the following statements best describes whether the firm may act for both companies?
The firm may not act because there is a conflict between the clients.
The firm may act provided it is satisfied that it is reasonable to act for both clients.
The firm may not act because the clients do not share a substantially common interest.
The firm may act provided each client takes independent legal advice concerning the conflict.
The firm may act because there was no conflict at the outset, as separate teams of solicitors will be working on the matters.
(B) This is a situation where the conflict can be resolved under the ‘competing for the same objective’ exception, which applies where two or more clients are competing for an objective which, if attained by one client, will make that objective unattainable to the other(s). Here the firm can resolve the conflict under this exception because the clients are two companies competing to take over the same third company. A firm may act for both clients in this situation where: (1) the clients have given informed consent, given or evidenced in writing, to the firm acting; (2) where appropriate, the firm puts in place effective safeguards to protect the clients’ confidential information; and (3) the firm is satisfied that it is reasonable to act for all the clients. These conditions are met here. (A) is incorrect because the ‘competing for the same objective’ exception may be applicable to this conflict. (C) is incorrect because even though the ‘substantially common interest’ exception is inapplicable to this situation, the separate ‘competing for the same objective’ exception may be used. (D) is incorrect because it is not required that the clients take independent advice. (E) is incorrect because the conflict rules generally apply to the entire firm, not individuals within it. Whether separate teams of solicitors will be working on the matters is irrelevant to whether a conflict exists
A builder places an online order for a consignment of bricks from a merchant, for delivery on 20 May. The merchant accepts the order. The bricks are required for immediate use in building a house for the builder’s customer. On 22 May, the merchant tells the builder that the bricks will not be delivered until 25 May. The builder’s contract with their customer requires them to pay the customer compensation for the resulting delay.
What are the builder’s rights as against the merchant?
The builder can terminate the contract and claim damages for the additional cost of sourcing replacement bricks and for the compensation payable to their customer.
The builder can terminate the contract and claim damages for the additional cost of sourcing replacement bricks, but they cannot claim for the compensation payable to their customer.
The builder can terminate the contract and claim damages for the compensation payable to their customer, but not for the additional cost of sourcing replacement bricks.
The builder cannot terminate the contract, but they can claim damages for the compensation payable to their customer.
The builder can obtain an order requiring the merchant to supply the bricks on time.
(B) Where a time for delivery is agreed in a commercial contract, there is a presumption that time for delivery is of the essence of the contract. This means that the agreed delivery time is a condition of the contract. If it is not complied with, the innocent party (here, the builder) can terminate the contract and claim damages. The damages will include the additional cost of sourcing replacement bricks. However, the compensation payable by the builder to their customer depends on the contract between the builder and the customer, so it is unlikely to be ‘loss flowing naturally from the breach’. The builder could claim it only if it was in the reasonable contemplation of the builder and the merchant when they concluded their contract. Here, there is no indication in the facts that the merchant was aware that compensation was payable to the builder’s customer in the event of delay, and so the builder cannot recover for what they must pay to their customer. (A) is incorrect because as stated above the builder can terminate the contract but is unlikely to be able to claim damages for the compensation payable to their customer. (C) is incorrect because the builder is unlikely to be able to claim damages for the compensation payable to their customer but can claim for the additional cost of sourcing replacement bricks. (D) is incorrect because the builder is unlikely to be able to claim damages for the compensation payable to their customer. (E) is not correct because this would be an order for specific performance. Specific performance is not available where, as here, damages would be an adequate remedy. The builder can obtain the bricks elsewhere and can recover damages for all their losses under the contract. Their problem is that the contract does not extend to the more remote losses.
A client wishes to make a claim against his former solicitor for professional negligence. The client’s current solicitor sends a letter of claim pursuant to the Professional Negligence Pre-Action Protocol. The former solicitor responds with an offer to engage in alternative dispute resolution. However, the client refuses the former solicitor’s offer. Instead, the client instructs the current solicitor to issue proceedings before the end of the protocol period.
Which of the following best describes the probable consequence of the client’s failure to follow the pre-action protocol?
They may issue proceedings only if they obtain the court’s permission.
They may have any damages the former solicitor is ordered to pay reduced.
They may be required to pay over a percentage of damages received to the former solicitor.
They may be required to attend alternative dispute resolution as soon as the former solicitor has served their defence.
They may, even if successful in the claim, be ordered to pay some or all of the former solicitor’s costs.
(E) Costs are the appropriate sanction for a party who does not comply with a pre-action protocol. (A) is not correct, as the client is free to issue proceedings (although it would be prudent not to do so). (B) is not correct as the court has no power to reduce damages as a sanction for conduct in litigation. (C) is not correct as the court has no power to order a percentage of damages to be paid over. (D) is not correct as the court has no power to order a party to attend
A company was incorporated several years ago with the Companies (Model Articles) Regulations 2008 (unamended) as its articles of association. The company is currently valued at £5 million and wishes to borrow £1 million to acquire new premises. The loan will be secured by fixed charge over the premises.
Which of the following best describes the shareholders’ resolutions which must be passed before the company can enter the loan?
The shareholders must resolve to enter the loan and grant the charge by special resolution.
The shareholders must resolve to enter the loan and grant the charge by ordinary resolution.
The shareholders must approve the terms of the loan by special resolution.
The shareholders must approve the terms of the loan by ordinary resolution.
No shareholders’ resolutions are necessary.
(E) Unless there are restrictions in the articles (unamended Model Articles do not include any), the board has the power to borrow money. Therefore, a board resolution is all that will be needed to enter the loan and grant the charge. No shareholder approval is needed. Therefore, (A), (B), (C), and (D) are incorrect.
A property development company built a city centre development, incorporating shops and residential properties. The development was completed on 1 August 2010. Under the terms of the lease, obligations to maintain the residential part of the structure then passed to the residential management company.
On 26 February 2021, a large crack appeared in a wall in one of the apartments of the building. Investigations suggest that the crack has been caused by faulty workmanship dating back to construction of the property building. The residential management company is considering making a claim against the developers.
Which of the following statements best describes the limitation period in relation to the management company’s claim against the developer?
The management company is out of time in making a claim against the developer because the limitation period expired on 1 August 2016.
The management company may bring a claim against the developer any time before 26 February 2024.
The management company may bring a claim against the developer any time before 31 August 2025.
The management company may bring a claim against the developer any time before 26 February 2027.
The management company may bring a claim against the developer any time before 26 February 2036.
(B) The management company can avail itself of the provisions of the Latent Damage Act 1986, which provides that a claim can be brought within six years of the date of accrual or three years from the earliest date on which the claimant knew, or reasonably ought to have known, material facts necessary to bring an action alleging negligence (the starting date). Here, the negligence will be deemed to have accrued at the completion of the project (1 August 2010). Six years from the date is 1 August 2016 (choice (A)). But instead, the management company can rely on the three-year period. The management company learned of the negligence on 26 February 2021. Three years from that date is 26 February 2024. (C) is incorrect because it is using the Latent Damage Act longstop period of 15 years. That is the latest date a claim may be brought no matter when the negligence is discovered. But here, the limitation will end earlier because the management company knew about the developer’s negligence more than three years before the longstop date. (D) is incorrect because it is using the six-year period from the date of discovery; the six-year period is used from the accrual date and, as indicated above, that period has expired. (E) is incorrect because it is applying the longstop date from the date of discovery; the longstop is measured from the date of accrual.
A woman hires a contract killer to murder her husband. The woman pays the contract killer £500,000, but he has a change of heart and does not go through with the murder but leaves the country with the woman’s money.
Can the woman recover the £500,000?
No. There was no contract, because there was no consideration.
No. The contract is void for illegality in formation.
No. The contract is void for illegality in its performance.
Yes. The contract has all the necessary elements so is valid, and so she can recover the £500,000 as damages for breach.
Yes. The law of restitution does not allow a wrongdoer to profit from their wrongdoing so the woman would be entitled to a remedy.
(B) Any contract that contemplates a criminal act will be illegal and automatically void. As murder is a criminal offence, this would apply in this scenario. (A) is incorrect as, if this had been a legal contract, both parties would have provided consideration. (C) is incorrect because this contract is illegal at its outset, not in its performance. (D) is incorrect because even though all the necessary elements for a valid contract may be present, the fact that the contract is for an illegal act renders it void, so no damages can be recovered for its breach. (E) is incorrect because the law of restitution does not apply when a contract is void for illegality from the start because it involves serious criminal misconduct. It is, however, correct that the law of restitution does not allow a wrongdoer to profit from their wrongdoing and might allow a party to recover amounts paid under a void contract where the reason for invalidity is not illegality
On 1 September, an importer offers to sell a consignment of fresh fruit to a greengrocer. The greengrocer emails an acceptance of the offer on 22 September. The importer sends an email back explaining that when he had not heard from the greengrocer within three days, he sold the fruit to a different greengrocer in order to sell it before it rotted.
Is the importer liable for breach of contract?
Yes, because the greengrocer accepted the importer’s offer before the importer did anything to revoke the offer.
No, because the importer’s offer had lapsed before the greengrocer had accepted the offer and therefore there was no contract between the parties.
Yes, because the sale to the second greengrocer constituted an anticipatory breach.
No, because no contract was formed due to mistake.
No, because the contract was discharged by frustration.
(B) The importer will not be liable for breach because the offer had lapsed and so no contract was formed. Unless a time for acceptance is specified, an offer will lapse after a reasonable time. What is ‘reasonable’ will depend on the nature of the subject matter, for example, an offer to purchase perishable goods, will lapse more quickly. Here, the offer was for a consignment of fresh fruit. It is not reasonable to expect an offer for the sale of consignment of fresh fruit to remain open for three weeks–because the fruit would rot by then, as indicated by the fact that the importer feared its rotting after just three days. Therefore, the offer had lapsed before the greengrocer accepted it, so the importer is not liable for breach of contract. Thus, (A) incorrect. (C) is not correct, as there was no contact for the reasons stated above. Anticipatory breach occurs if before performance is due under a contract, one party indicates they will not perform. (D) is not correct. A contract can be rescinded or cancelled because of common mistake, which usually means that both parties to a contract were mistaken about the existence of the subject matter of the contract. Here, no contract was formed as discussed above. (E) is not correct. A contract will be discharged by frustration if it has become impossible to perform. Here, there was no contract to discharge. The importer’s offer had lapsed before the greengrocer accepted it.
A small family travel agency has a contract to sell tickets for flights on an airline in return for a commission for each flight sold. The business of the travel agency is tied almost exclusively to the airline.
The airline soon realises that the agency’s recordkeeping is very poor, which causes the airline to spend extra money to double check the agency’s bills. The airline believes that the agency’s poor recordkeeping justifies immediate termination of the contract.
The airline informs the agency of the above but agree they will not terminate the contract if the agency agrees to a lower commission rate, to reflect the airline’s added administration costs. The agency agrees to the variation. The agency subsequently brings a claim seeking to recover the full commissions owed under the original contract.
Is the court likely to find that the variation to lower the commission is binding?
No, because the variation is void for economic duress.
Yes, because the airline gave consideration by spending extra money to double check the agency’s bills
No, because the variation is voidable for undue influence.
Yes, because the airline believed that it was entitled to terminate the contract.
No, because there was no consideration for the agency’s agreement to accept less commission.
(D) A court is likely to find the variation binding because the airline believed that it had a right to terminate the contract and, therefore, there was consideration to support the variation (specifically, the airline gave up whatever right it believed it had to terminate the contract based on the agency’s poor record keeping). Therefore, (E) is incorrect. (A) is incorrect because economic duress makes a contract voidable (rather than void) – (and in any case there may have been no economic duress, because the airline believed in good faith that it was entitled to terminate the contract). (B) is incorrect because the airline’s expenditure was not incurred in return for the agreement to vary the commission; it was incurred to resolve the problem with the agency’s record-keeping. (C) is incorrect because undue influence involves improper threats (or the abuse of a relationship of trust and confidence, which is not relevant here). Here, the airline believed that its threat to terminate the agreement was justified, so it is not improper.
A company was incorporated seven years ago. It has adopted the Companies (Model Articles) Regulations 2008 (unamended) as its articles of association. It has an issued share capital of 400 ordinary £1 shares held in equal amounts by eight shareholders. This year, the company has £60,000 lawfully available to distribute as a dividend. The directors of the company adopt a resolution approving payment of a £100 per share dividend.
Which of the following best states the legal position regarding the shareholders’ rights with respect to the dividend?
The shareholders may adopt a special resolution increasing the amount of the dividend to include the full £60,000 lawfully available.
The shareholders may adopt an ordinary resolution increasing the amount of the dividend to include the full £60,000 lawfully available.
The shareholders have no right to alter the amount of the dividend declared by the directors.
The shareholders may reduce the amount of the dividend, but only through a special resolution adopted for that purpose.
The shareholders may reduce the amount of the dividend, through an ordinary resolution adopted for that purpose.
(E) The shareholders may reduce the amount of the dividend, through an ordinary resolution adopted for that purpose. The directors have the power to declare dividends out of lawfully available funds, but before the dividend may be paid, the shareholders must approve it (or approve a lesser amount) through passing an ordinary resolution. (A) and (B) are incorrect as the shareholders have no power to increase a dividend, even if there are additional funds lawfully available for that purpose. (C) and (D) are incorrect because the shareholders have the right to reduce the amount of a dividend by an ordinary resolution.
A garage contracted with a supplier for the sale and installation of a new car maintenance ramp, which both parties were aware was required for use immediately in the garage. The date agreed for delivery of the ramp was delayed by five months, so the garage sued the supplier for lost profits from (1) their ordinary trading profit from car maintenance work during the five-month period, and (2) a proposed expansion of the garage’s business to include maintaining a large fleet of prestigious chauffeur-driven cars.
Will the garage be successful in its claim for loss of profit?
Yes. The supplier was in breach of contract so the garage is entitled to sue for their lost profit.
Yes. The losses suffered by the garage arose naturally from the breach by the supplier.
Yes. The losses suffered by the garage would have been in the reasonable contemplation of both the parties.
Yes. The losses suffered by the garage would have been in the reasonable contemplation of both the parties.
No. The losses suffered by the garage are too remote.
(D) Damages for breach of contract may be recovered only for losses arising naturally from the breach and special or unusual loss which were in the contemplation of both the parties at the time the contract was made as a probable result of a breach of the contract. Normal trading profit clearly arises naturally from the supplier’s breach of contract. The profit from a new line of business would have to have been in the reasonable contemplation of both the parties when they entered into the contract. There is nothing in the scenario to suggest this was the case. (A) is incorrect because, even if there is a breach of contract and the innocent party has suffered loss, that loss must not be too remote a consequence of the breach. In this scenario, the profit from the new line of business is likely to be too remote for the reasons set out above. (B) is incorrect because only the loss of profit from normal trading activity could be said to arise naturally from the breach, whereas the loss of profit from the new business is likely to be too remote as it was not in the reasonable contemplation of the parties at the time the contract was made. (C) is incorrect because it is unlikely that the loss of profit from the new contract was in the reasonable contemplation of the parties at the time the contract was made. This test is also not relevant for the loss of normal trading profit, which only requires it to have been a loss arising naturally from the breach. (E) is incorrect as the loss of the ordinary trading profit is likely to be held to be a loss arising naturally from the breach of contract by the supplier, and is therefore not too remote.
A solicitor is representing one of his friends in a breach of contract claim against a builder. When the friend first instructed the solicitor a little over a year ago, the solicitor prepared a letter advising the friend on the likelihood of success of the claim and noting the applicable limitation period.
The header of the letter clearly stated that it is ‘subject to legal advice privilege’. However, given their friendship, the letter began with a discussion of various personal matters before moving on to the likelihood of the success. In this part, the letter indicates that client may have difficulty proving the claim. The friend nevertheless instructed the solicitor to issue proceedings.
In due course, the solicitor discloses the letter but asserts that it is not subject to inspection under the legal professional privilege. Which of the following best states the legal position with regard to the letter?
The letter is privileged given that it clearly states that it is ‘subject to legal advice privilege’.
The letter is not privileged because parts of it do not relate to the legal proceedings.
The letter is not privileged because it is more than one year old.
The parts of the letter that relate to the solicitor’s performance of their professional duties is not privileged because they admit facts that are unhelpful to the client.
The parts of the letter that relate to the solicitor’s performance of their professional duties is privileged as legal advice.
(E) To be privileged, the document must relate to the solicitor’s performance of their professional duties, at least in part. If not, the party is unlikely to be able to claim privilege. Here, the parts in the letter that outline the likelihood of the client’ success and the applicable limitations period would be privileged. (A) is incorrect because there is no requirement for the privileged document to be headed in this manner. Even without the label, the letter would be privileged. Conversely, it would not be privileged even with such a heading if it did not include privileged information. In other words, how a document is labelled is not the determining factor in whether it falls within a privilege. (B) is incorrect because only the part of the letter that does not relate to solicitor-client interaction would be subject to inspection. (C) is incorrect because legal advice privilege is not restricted in this way. It starts from the date of instruction and subsists through the entire case. (D) is incorrect because the legal advice privilege will apply regardless of whether the advice points out weaknesses or strengths in a client’s case
A solicitor intends to issue court proceedings for damages for breach of contract. The claim is worth less than £50,000.
Which of the following statements best describes how the claimant should start the proceedings?
The solicitor should send the claim form by first class post to their local county court for issue.
The solicitor should take the claim form for issue in person to the local county court.
The solicitor should send the claim form to the County Court Money Claims Centre (CCMCC) in Salford to issue the claim form.
The solicitor should send the claim form by special delivery to the local county court.
The solicitor should send the claim form to their local High Court district registry that will issue the claim form and determine which court to allocate the claim.
(C) There is now one County Court issuing centre based in Salford, the CCMCC, and all claims are issued from this court. (A), (B), and (D) are incorrect because the prescribed process for issue in the County Court is now through the bulk issuing centre in Salford. (E) is incorrect because it would be inappropriate for the claimant to issue in the High Court bearing in mind its value.
dental patient is the victim of malpractice. Because of negligent treatment provided by a dentist, the patient required four crowns. Because the patient is 23 years old, the crowns will need to be replaced several times throughout the patient’s life.
The patient instructed a solicitor to issue a claim against the dentist. The solicitor calculated present and future damages for the cost of the crowns and the time the patient will need to take off from work at about £47,500. The claimant also suffered some pain, but she is averse to claiming compensation for that and instructs the solicitor not to include it. Without the claim for pain and suffering, the solicitor estimates damages at about £60,000, including interest and costs. The solicitor issues proceedings in the County Court.
To which track will the court likely allocate the case?
The small claims track.
The fast track.
The multi-track.
The court will not allocate the case to a track but will instead transfer it to the County Court Money Claims Centre, as there is no claim for personal injury.
The court will not allocate the case to a track but will instead transfer it to the High Court, as it is a malpractice claim for more than £50,000.
(C) The case will be allocated to the multi-track. Claims in the County Court for more than £25,000 are allocated to the multi-track. (A) is incorrect because the small claims track is for cases involving less than £10,000 (or personal injury claims for less than £1,000). (B) is incorrect because the fast track is used for cases of more than £10,000 (or more than £1,000 for personal injury claims) and up to £25,000. (D) is incorrect, as the County Court Money Claims Centre handles debt claims and does not handle cases for damages such as the claim here. (E) is incorrect for a few reasons. First, the High Court usually does not hear cases involving less than £100,000 or where the claimant does not expect to recover at least £50,000 for a personal injury. Neither of those thresholds are met here - the claimant has chosen not to pursue damages for pain and suffering (and even if the patient pursued the claim, it was for less than £50,000). It should be noted that even if a malpractice claim for £50,000 were the threshold, the amount would not be met here because when determining the value of a claim, interest and costs are excluded. The claim here without interest and costs was £47,500.
A solicitor is looking after the files of a colleague while the colleague is on holiday. One of the colleague’s clients is involved in a transaction to purchase a company in Birmingham. The solicitor takes a call from the Birmingham-based solicitor who is acting for the company. The other solicitor is concerned about the lack of progress on the matter and wants an urgent update as to why there has been a delay. The solicitor flicks through the file and notices that her colleague has made a suspicious activity report about her client to their firm’s Money Laundering Reporting Officer (‘MLRO’). The solicitor passes this information on to the other solicitor because she thinks that the other solicitor may need to notify his own MLRO about the transaction. The solicitor then returns to working on her own clients’ matters.
Which of the following best describes whether the solicitor has committed an offence under the Proceeds of Crime Act 2002?
The solicitor has committed the offence of failure to report because she should have made her own suspicious activity report about the client to the MLRO.
The solicitor has committed the offence of tipping off because she disclosed her colleague’s suspicious activity report to the other solicitor.
The solicitor has not committed the offence of tipping off because she can rely on the defence of disclosure within an undertaking.
The solicitor has not committed an offence because the disclosure was oral rather than in writing.
The solicitor has not committed the offence of tipping off because she can rely on the defence of disclosure between institutions.
(E) The solicitor has not committed the offence of tipping off because she can rely on the defence of disclosure between institutions. The indirect offence of tipping off can arise where there is a disclosure to a third person that a suspicious activity report has been made to the police, HM Revenue and Customs, the National Crime Agency, or the firm’s MLRO if that disclosure might prejudice any investigation that might be carried out. However, a legal professional will not commit a tipping off offence if (1) the disclosure is made to another legal professional in a European Economic Area state; (2) the disclosure relates to a client or former client of both parties, or a transaction involving them both; (3) the disclosure is made for the purpose of preventing a money laundering offence; and (4) both parties have equivalent professional duties of confidentiality and protection around personal data. Here, the solicitor disclosed her colleague’s suspicious activity report to the other solicitor, which could constitute tipping off. However, the solicitor may rely on the defence of disclosure between institutions. The disclosure was made to another lawyer in the UK (a European Economic Area state), the disclosure related to a transaction involving them both, the disclosure was made to prevent the other solicitor committing his own money laundering offence (that is, failure to report), and both parties are in the UK and have equivalent professional duties of confidentiality. (A) is incorrect because the relevant offence here is tipping off, not failure to report. In any event, the solicitor has no independent suspicions about her colleague’s client’s involvement in money laundering and therefore does not need to make her own report to the MLRO. (B) is incorrect because, as explained above, the solicitor has not committed the offence because a defence is available. (C) is incorrect because the applicable defence here is disclosure between institutions rather than disclosure within an undertaking. The latter defence would be available if the other solicitor worked within the same organisation as the solicitor. (D) is incorrect because the disclosure in a tipping off offence may be in writing or oral.
Before entering into a contract to sell their house, the sellers tell the buyers that there are no planning applications to build on the adjoining field. Unknown to the sellers, an application to build on the field was submitted the day before they made the statement. The buyers relied on the statement in deciding to enter into the contract.
What remedies are available to the buyers for misrepresentation?
The buyers can rescind the contract, but they cannot claim damages unless they can prove that the sellers knew of the planning application when they made the statement.
The buyers cannot rescind the contract, but they can claim damages unless the sellers can prove that they had reasonable grounds for believing, and did believe, that the statement was true.
The buyers can rescind the contract, and they can claim damages unless the sellers can prove that they had reasonable grounds for believing, and did believe, that the statement was true.
The buyers can rescind the contract, and they can claim damages but only if they can prove that the sellers acted negligently in making the statement.
The buyers can rescind the contract or claim damages only if they can prove that the sellers knew of the planning application when they made the statement.
(C) This is a case of negligent or innocent misrepresentation. In this situation, the innocent party can always rescind the contract, unless one of the bars to rescission applies or the court orders damages in lieu of rescission (which is unlikely here because of its significance to the buyers). The innocent party can claim damages unless the other party can prove that they had reasonable grounds for believing, and did believe, that the statement was true. That might be the case here if the sellers had no way of knowing of the planning application when they made the statement to the buyers. In that case the misrepresentation would be innocent rather than negligent. (A) is not correct, because it is not necessary to prove that the sellers knew of the planning application in order to claim damages. That would be tantamount to fraudulent misrepresentation, but that is not the only situation in which damages are available. (B) is not correct because rescission is available for both innocent and negligent misrepresentation. (D) is not correct because the innocent party does not have to prove negligence: it is for the other party to disprove it. (E) is incorrect because both rescission and damages may be available even though the representation was not fraudulent.
