Managing Client Relationships - 3 C's

Question 1

What are the 3 C’s

Answer 1

• Customer Due diligence (CDD)
• Conflict check
• Client care letter

Question 2

What is Customer Due Diligence (CDD)?

Answer 2

• identifying and verifying the client’s identity

Question 3

When do you have to carry out a CDD?

Answer 3

• Establish a business relationship
• carrying out an occasional transaction
• suspect money laundering
• doubt the adequacy of the identification

Question 3

How do you carry out a CDD?

Answer 3

• Identify: name and address
• Verify: evidence - original docs eg passports, electronic verification etc

Question 4

What is a conflict check?

Answer 4

it is a code of conduct that prohibits you from acting where os an own interest conflict to a conflict of interests

Question 4

What are the two types of conflicts

Answer 4

1. own interest conflict
   - CANNOT ACT
2. conflict of interest
   - separate duties to act in best interests of 2 or more clients in the same conflict
   - Cannot act UNLESS an exception applies

Question 5

exceptions of conflicts of interest

Answer 5

• substantially common interest
  where there is a clear common purpose between clients
• competing for the same objective
  eg auction

Question 6

conditions to the exceptions of conflicts of interests

Answer 6

• informed consent, evidenced in writing, to you acting
• protecting confidential info
• satisfied that it is reasonable to act for both clients

Question 7

What is a client care letter?

Answer 7

a letter sent to the client at the beginning of a matter setting out the terms in which the solicitor will carry out the work

Question 8

What is included in a client care letter?

Answer 8

1. General information
   - ensures clients about making informed decisions about the services they need and how the matter will be handled and regulated
2. Costs
   - best possible information about how their matter will be prices + overall costs and any costs incurred
3. Complaints
   - clients are informed about the right to complain, how a complaint is made, and any right to make a complaint to the Legal Ombudsman

Question 9

Types of funding for clients to fund their legal services

Answer 9

1. private funding
2. Professional funding
3. before the event insurance
4. community legal service
5. conditional fee agreements
6. damages based agreements
7. after the event insurance
8. third party funding

Question 10

Private funding

Answer 10

• hourly charging (fee earners record time in 6 min blocks)
• fixed fees (law firm invoices client for fixed amount)

Question 11

Professional funding

Answer 11

Legal funding through Trade Union or professional organisation
- more common in civil or criminal litigation

Question 12

Before the event insurance

Answer 12

• taken out before the need for legal work arises
• household insurance (dispute w neighbour)
• motor insurance (following incident)

Question 13

Conditional fee agreement (CFA)

Answer 13

• civil litigation
• ‘no win no fee’
• if the case was successful, the solicitor will be paid the normal fee plus a success fee of up to 100% on top

Question 13

Third party funding

Answer 13

• civil litigation
• funding provided by a tp (banks, private equity firms, hedge funds etc)
• high value commercial cases

Question 14

Damage Based Agreement (DBA)

Answer 14

• civil litigation
• ‘no win no fee’
• if the case is successful, the solicitor will be paid a proportion of the damages awarded to the client
• Max amount is 25% of damages in personal injury
• 35% in employment tribunal cases
• 50% in all other cases

Question 15

After the event insurance

Answer 15

• taken out once a dispute has already arisen
• covers clients disbursements and opponents costs and disbursements if client loses