Managing Client Relationships MCQs Flashcards
A solicitor decides to sell a holiday cottage he owns in Yorkshire. One of the solicitor’s clients offers the full asking price for the cottage and the solicitor accepts his client’s offer.
In the full knowledge that the solicitor is the seller, the client instructs the same solicitor in writing to act as his solicitor in the transaction. The solicitor accepts the instruction and prepares all the documents. The transfer is completed without complications.
Were the solicitor’s actions in accordance with the SRA Standards and Regulations?
Yes, because a solicitor can act where there is an own interest conflict if he is satisfied it is in his client’s best interests
Yes, because a solicitor can act where there is an own interest conflict if the solicitor and the client have a substantially common interest.
Yes, because a solicitor can act where there is an own interest conflict if he has received written consent from the client
No, because a solicitor cannot act if there is an own interest conflict or a significant risk of an own interest conflict.
No, because a solicitor cannot act if there is an own interest conflict unless the solicitor and the client are competing for the same objective
No, because a solicitor cannot act if there is an own interest conflict or a significant risk of an own interest conflict.
Correct.
There is an outright prohibition on acting where there is an own interest conflict.The SCI and CSO exceptions only applies to conflicts of interest.Receiving written consent is one of the conditions that applies to an exception to the rule that you cannot act if there is a conflict of interest.
A client telephones a solicitor to instruct her to draft wills for himself and his brother. They both wish to leave their estates to each other.
Which of the following best explains what the solicitor should do?
The solicitor cannot draft the wills for the client and the brother because there is a conflict of interests between them.
The solicitor cannot draft the wills for the client and the brother unless the brother provides instructions to her directly.
The solicitor may draft wills for the client and the brother if the brother has given written authorisation, in advance, of the client’s authority to give instructions on his behalf.
The solicitor may draft wills for the client and the brother provided the solicitor has no reason to doubt the instructions reflect the brother’s wishes.
The solicitor can draft the wills for the client and the brother because they are related to each other and there is a low risk that the instructions do not represent the brother’s wishes.
The solicitor may draft wills for the client and the brother if the brother has given written authorisation, in advance, of the client’s authority to give instructions on his behalf.
CORRECT: this is the position under CCS 3.1: ‘You only act for clients on instructions from the client or from someone properly authorised to provide instructions on their behalf. If you have reason to suspect that the instructions to not represent your client’s instructions, you do not act unless you have satisfied yourself that they do.’
‘A solicitor is dealing with the administration of a deceased’s estate for a client. At the outset the solicitor gave a written estimate of the likely total costs of £10,000 including disbursements. A few weeks later the client instructs the solicitor to arrange for some shares in an overseas company to be sold. The solicitor decides the best way to do this is to instruct an agent to sell the shares. The agent’s fees will be an additional £1000.
Which of the following best explains what the solicitor should do next?
The solicitor should write to the client to inform him about the agent’s fees and ask for his instructions because the original estimate is no longer accurate.
The solicitor does not need to do anything because the agent’s fees will be incurred outside England and Wales.
The solicitor does not need to do anything because the agent will invoice the client directly.
The solicitor should write to the client to inform him about the agent’s fees and ask for his instructions because a solicitor must get prior approval for every item of expenditure.
The solicitor does not need to do anything because the client was informed that it was only an estimate at the outset.
The solicitor should write to the client to inform him about the agent’s fees and ask for his instructions because the original estimate is no longer accurate.
Correct. Under CCS 8.7 solicitors must ensure that clients receive the best possible information about how their matter will be priced and, both at the time of engagement and when appropriate as their matter progresses, about the likely overall cost of the matter and any costs incurred. The solicitor therefore needs to update their estimate.
A man has been arrested on suspicion of common assault by battery. He is a professional football player earning £180,000 per year.
It is alleged that the man punched a photographer who was trying to take a picture of him whilst he was having a drink with a woman in a bar.
The man has never been in trouble with the police before.
Will the man be entitled to publicly funded legal representation in connection with the defence of his case?
The man will be eligible for publicly funded legal representation by the duty solicitor at the police station and at all hearings up to and including sentence.
The man will be eligible for publicly funded legal representation by the duty solicitor at the police station, limited to telephone advice only.
The man will not be eligible for publicly funded legal representation by the duty solicitor at the police station because he will fail the means test.
The man will be eligible for publicly funded legal representation by the duty solicitor at the police station. He will not be able to get a representation order in the magistrates’ court, because even if he passes the interests of justice test, he will fail the means test which applies in the magistrates’ court.
The man will be eligible for publicly funded legal representation by the duty solicitor at the police station. He will also be able to get a representation order in the magistrates’ court provided he passes the interests of justice test, because there is no means test in the magistrates’ court.
The man will be eligible for publicly funded legal representation by the duty solicitor at the police station. He will not be able to get a representation order in the magistrates’ court, because even if he passes the interests of justice test, he will fail the means test which applies in the magistrates’ court.
You are an apprentice solicitor in the corporate department of a firm. Your firm has been instructed to act for Kurtz Cars Limited (‘KCL’) which is interested in buying the shares in Bill’s Spares (‘BS’), a company which sells car parts. The shares in BS are being sold by way of auction. Neither you nor your supervisor has acted for KCL in the past.
Speedy Motors Ltd (‘SML’) has been reported in the press as being interested in acquiring the shares in BS and has contacted another partner in your firm with the intention to instruct him on their bid to buy the shares in BS. Your firm has never acted for SML.
Which ONE of the following statements is CORRECT?
Your firm may be able to act for SML because both SML and KCL have a substantially common interest. However in order to do so, both KCL and SML must give informed consent to your firm acting; you must put in place effective safeguards to protect KCL and SML’s confidential information; and you must be satisfied it is reasonable for you to act for both KCL and SML.
Your firm may be able to act for SML because both SML and KCL are competing for the same objective. However in order to do so, you must obtain the written consent of KCL, SML and BS.
This is a situation where if your firm accepted the instructions from SML, it would owe separate duties to act in the best interests of KCL and SML in relation to the same matter, and there is a risk that those interests may conflict. Neither of the exceptions apply and your firm should not accept the instructions from SML.
Your firm may be able to act for SML because both SML and KCL are competing for the same objective. However in order to do so, both KCL and SML must give informed consent to your firm acting; you must put in place effective safeguards to protect KCL and SML’s confidential information; and you must be satisfied it is reasonable for you to act for both KCL and SML.
There is no risk of a conflict of interest here. KCL and SML will not be on opposite sides of the transaction so there is no risk of their interests in the matter conflicting. Your firm will therefore be able to act for both KCL and SML.
Your firm may be able to act for SML because both SML and KCL are competing for the same objective. However in order to do so, both KCL and SML must give informed consent to your firm acting; you must put in place effective safeguards to protect KCL and SML’s confidential information; and you must be satisfied it is reasonable for you to act for both KCL and SML.
You are an apprentice in the litigation department. You have just attended a meeting with your supervisor and the directors of a new client of the firm. The client has just been served with proceedings in a multi-million pound action in relation to its alleged defective design of a new football stadium. The client has instructed your supervisor to defend those proceedings.
In the meeting, your supervisor explained that he could not give any accurate cost estimates, but he would explain the costs position in a client care letter which would follow later that day. You have been asked to draft that letter for review by your supervisor.
Which ONE of the following statements is the MOST APPROPRIATE form of wording to be included in the letter to the client about your firm’s cost estimate?
- Assume that the figure will be inserted by your supervisor
‘It is impossible to provide you with an accurate estimate as to costs at this stage for obvious reasons. Please be assured that, at all times, our costs will be fair and reasonable. We will charge our fees on a time basis, in accordance with our standard hourly rates. I suggest that we review the costs on a monthly basis and ensure that we do not incur more than [£*] plus VAT in costs and disbursements without your further approval.’
‘Whilst it is impossible at this stage, to give you an estimate as to what your total costs will be, please be assured that our costs will be fair and reasonable and you will be charged in accordance with our standard hourly rates (details attached).’
‘Given the complexity of this particular litigation it is impossible at this stage, to give you an estimate as to what your total costs will be. You will be charged in accordance with our standard hourly rates (details attached).’
‘At this stage, it is impossible to give you an estimate as to what your total costs will be in this matter, for obvious reasons. Only once we have reviewed the evidence, will we be able to provide you with any an accurate estimate in accordance with our standard hourly rates (details attached).’
‘Because of the uncertainty and complexity of this particular litigation, it is impossible to provide you with an accurate estimate as to costs at this stage. We will charge our fees on a time basis, in accordance with our standard hourly rates (attached). I suggest that we review the costs on a monthly basis. I will ensure that we do not incur more than [£*] plus VAT in costs and disbursements without your further approval.’
‘Because of the uncertainty and complexity of this particular litigation, it is impossible to provide you with an accurate estimate as to costs at this stage. We will charge our fees on a time basis, in accordance with our standard hourly rates (attached). I suggest that we review the costs on a monthly basis. I will ensure that we do not incur more than [£*] plus VAT in costs and disbursements without your further approval.’
Correct. This option most closely meets the requirements of CCS 8.7 which requires that clients receive the best possible information about how their matter will be priced, and both at the time of engagement and when appropriate as their matter progresses about the likely cost of the matter and any costs incurred. This option sets out the hourly rates of the firm and gives a commitment not to incur more than a specified amount in fees without the agreement of the client. It also explains why it is not possible for the firm to give an accurate estimate at this stage.
A commitment that the costs will be fair and reasonable does not give the client enough information about the likely overall cost of the matter. It is also not enough to refer to the firm’s standard hourly rates, the firm should set these out in the letter or in an attachment to the letter. Postponing giving a cost estimate until the firm has completed a review of the evidence also does not give a clear indication of the overall costs.
A claim for damages for professional negligence is settled on terms that the defendant surveyor must pay to the claimant damages of £60,000 together with the claimant’s legal costs, to be assessed on the standard basis. In 2018 the claimant had entered into a written conditional fee agreement with her solicitor which provided for a success fee of 90%. The solicitor has calculated his professional charges at £20,000 before addition of the success fee and VAT.
What sum may the solicitor charge the client for his professional fees, net of VAT?
£30,000
£38,000
£15,000
£18,000
£35,000
£38,000
Correct. The success fee is 90%. 90% of £20,000 is £18,000. This is on top of the ‘normal’ fee of £20,000. So the total charge is £38,000.
A claimant brings a professional negligence claim seeking £200,000. The claimant has a damages based agreement (‘DBA’) with his solicitor which provides for the solicitor to be paid 50% of the damages in the event the claim succeeds. The claimant is awarded £160,000 at trial, which counts as ‘success’ under the terms of the DBA. The solicitor’s fees recoverable from the other side, calculated on the basis of a reasonable hourly rate, are £45,000.
What sum may the solicitor charge the client for his professional fees, net of VAT?
£125,000
£80,000
£45,000
£40,000
£100,000
£80,000
Correct. The solicitor is entitled to 50% of the damages. 50% of £160,000 is £80,000. Unlike a conditional fee agreement, with a DBA, if the case is successful, the solicitor will be paid a proportion of the damages awarded to the client by way of a remedy, rather than getting their charges plus a success fee, so £125,000 is wrong. £100,000 is 50% of the amount claimed by the claimant, not the amount of damages awarded by the court, and is therefore wrong. £40,000 is wrong because it is 25% of the damages awarded by the court – the maximum amount a lawyer can recover is capped at 25% in personal injury cases, 35% in employment tribunal cases and 50% in all other cases so the solicitor can recover 50% of the damages. £45,000 is the amount of the solicitor’s fees recoverable from the other side, but under the damages based agreement, the firm can recover 50% of the damages in the event the claim succeeds.
Your colleague is considering applying for the role of Compliance Officer for Legal Practice (‘COLP’) in your law firm. Which ONE of the following statements about the responsibilities of the COLP and the Compliance Officer for Finance and Administrations (‘COFA’) of a law firm is CORRECT?
The COLP must take all reasonable steps to ensure compliance by the firm, its managers, employees or interest holders with the SRA’s regulatory arrangements which apply to them.
The COLP must report any serious breach of the Code to the managing partner of a law firm, who in turn must report the breach to the SRA.
The COLP is the only person in the firm responsible to ensuring that any matters that are capable of amounting to a serious breach of the SRA Codes of Conduct are reported to the SRA.
The COLP is responsible for ensuring that the law firm, its managers and employees comply with any obligations imposed on them under the SRA Accounts Rules.
The COLP and the COFA of a law firm are solely responsible for compliance within the firm. The managers of the firm pass responsibility for compliance to the COLP and the COFA.
The COLP must take all reasonable steps to ensure compliance by the firm, its managers, employees or interest holders with the SRA’s regulatory arrangements which apply to them.
Correct. See CCF 9.1. The COLPs role is to take reasonable steps to ensure compliance, however ultimately, under CCF 8.1 the managers are jointly and severally responsible for compliance by the firm with CCF, not the COLP and COFA. Under CCF 9.1, the COLP must ensure the SRA is informed of any facts of matters that amount to a serious breach of the SRA’s regulatory arrangements. It is the role of the COFA to take all reasonable steps to ensure compliance with the SRA Accounts Rules.
Under CCS 7.7 all individual lawyers must report promptly to the SRA or other approved regulator any facts or matters they reasonably believe are capable of amounting to a serious breach of their regulatory arrangements (including the SRA Codes of Conduct).
You are an apprentice in a law firm. You work in a team comprising Rav, the partner who leads the team, Amy, who qualified as a solicitor three years ago, and Kirk a paralegal who has been in the team for four years.
Which ONE of the following statements is correct?
Only a partner may supervise your work on client files.
Amy can supervise your work on client files provided she has completed at least 12 hours of relevant training.
Amy cannot supervise your work on client files because she does not have a minimum of five years post qualification experience.
Your work on client files can be supervised by Kirk provided Kirk has suitable experience, knowledge and competence to deal with any issue that may arise and he has clear guidance as to when and to whom matters outside his competence or authority should be referred.
Kirk cannot supervise your work on client files because he is not legally qualified, but either Amy or Rav can.
Your work on client files can be supervised by Kirk provided Kirk has suitable experience, knowledge and competence to deal with any issue that may arise and he has clear guidance as to when and to whom matters outside his competence or authority should be referred.
Correct. Under CCF 4.4 a law firm is responsible for ensuring that it has an effective system for supervising client matters. This means that appropriate procedures need to be put in place for suitable persons to check regularly the work being carried out for clients. Although most people supervising client files will have a legal qualification, they do not necessarily have to be legally qualified. As long as they have suitable experience, knowledge and competence to deal with any issue that may arise and clear guidance as to when and to whom issues should be referred ‘upward’ they are permitted to supervise client files.
A colleague qualified into the property department of your law firm five years ago. He wishes to leave the firm and set up a business on his own as a self-employed solicitor advising clients on property transactions including selling and leasing land.
Which ONE of the following options is CORRECT?
Provided the solicitor obtains professional indemnity insurance as required by the SRA, he will not need to be authorised by the SRA because he will not be carrying out reserved legal activities under the Legal Services Act.
The solicitor will need to be authorised by the SRA because he will be carrying out reserved legal activities under the Legal Services Act. He will also need to comply with the SRA’s rules including the Code of Conduct for Solicitors and the SRA Accounts Rules
The solicitor will not need to be authorised by the SRA because he will not be carrying out reserved legal activities under the Legal Services Act. He will however need to comply with the Code of Conduct for Solicitors and the SRA Accounts Rules.
The solicitor will need to be authorised by the SRA and comply with the SRA Code of Conduct for Solicitors because he will be carrying out reserved legal activities under the Legal Services Act. However, he will not need to comply with the SRA Accounts Rules because he will not be working in a law firm.
The solicitor will need to be authorised by the SRA because he will be carrying out reserved legal activities under the Legal Services Act. However, provided he obtains authorisation from the SRA, he will not need to comply with the additional requirements contained in the Code of Conduct for Solicitors or the SRA Accounts Rules.
The solicitor will need to be authorised by the SRA because he will be carrying out reserved legal activities under the Legal Services Act. He will also need to comply with the SRA’s rules including the Code of Conduct for Solicitors and the SRA Accounts Rules
Correct. Advising on property transactions including selling and leasing land will involve preparing instruments of transfer relating to land and other instruments relating to real estate, which, as one of the reserved legal activities under the Legal Services Act 2007, can only be provided by someone authorised by an approved regulator. The approved regulator for solicitors is the SRA. The SRA Code of Conduct for Solicitors applies to all individuals authorised by the SRA to provide legal services. The SRA Accounts Rules apply to law firms and individuals authorised by the SRA to receive or deal with money belonging to clients. As the solicitor will be receiving and dealing with client money when purchasing land, he will need to comply with the SRA Accounts Rules.
Aron is a solicitor specialising in immigration law in a law firm. He volunteers one day a week in a law centre advising clients on immigration appeals and appearing before immigration tribunals.
Which one of the following statements is CORRECT?
The law centre does not need to be authorised by the SRA because Aron is not carrying out reserved legal activities.
The law centre must be authorised by the SRA because Aron will need higher rights of audience to appear before immigration tribunals.
The law centre does not need to be authorised by the SRA because Aron is working on a voluntary basis.
The law centre does not need to be authorised by the SRA because Aron also works in a law firm which is authorised by the SRA.
The law centre must be authorised by the SRA because Aron is carrying out reserved legal activities.
The law centre must be authorised by the SRA because Aron is carrying out reserved legal activities.
Correct. Law centres must be authorised by the SRA if they provide reserved legal activities regardless of whether the solicitor works on a voluntary basis. Reserved legal activities are set down in section 12 and Schedule 2 to the Legal Services Act 2007.Advising on immigration appeals falls within the conduct of litigation which is a reserved activity, in addition appearing before immigration tribunals involves rights of audience which is also a reserved legal activity.
You are a 7 year qualified solicitor in the property department of a busy law firm. You have been doing a lot of work selling flats for a large property developer client. Three months ago, when preparing bills for the client you noticed that regular payments had been made out of the client account to a partner who joined your department a year ago. You raised your concern with your firm’s Compliance Office for Finance and Administration (‘COFA’) at the time and have heard nothing further from him. He is also a busy partner in your department.
When preparing bills for the same client at the end of the month, you notice that the payments out of client account to the partner have continued. You can think of no explanation for the payments and suspect a breach of the SRA Accounts Rules.
Which ONE of the following options set out the most appropriate action you should take?
Report your concerns to the firm’s managing partner.
Confront the partner in question and raise the matter again with the Compliance Officer for Finance and Administration.
Report your concerns to your supervisor.
Report your concerns to the SRA.
Report your concerns to the Compliance Officer for Legal Practice.
Report your concerns to the SRA.
Correct. A breach of the SRA Accounts Rules involving suspected misappropriation of client money would amount to a serious breach of the SRA’s rules. CCS 7.7 requires you to promptly report to the SRA any facts or matters that you reasonably believe are capable of amounting to a serious breach of their regulatory arrangements by any person regulated by them (in this case the partner). You have already raised the matter with the COFA and heard nothing further. Given the severity of the breach, it would be appropriate to report your concerns to the SRA.
Question 17
A solicitor is dealing with a negligence case for a client. At the outset the solicitor gave a written estimate of likely total costs of £15,000 including counsel’s fees and other disbursements. A few weeks later the solicitor decides that expert evidence is also needed and the cost of this will be an additional £3,000.
Which of the following best explains what the solicitor should do next?
A. The solicitor does not need to do anything because the client was informed that it was only an estimate at the outset.
B. The solicitor does not need to do anything because experts’ costs are awarded by the court.
C. The solicitor does not need to do anything because he is not obliged to tell the client about third party costs.
D. The solicitor should write to the client to inform him about the cost of the expert and ask for his instructions because a solicitor must get prior approval for every item of expenditure.
E. The solicitor should write to the client to inform him about the cost of the expert and ask for his instructions because the original estimate is no longer accurate.
E - The solicitor should write to the client to inform him about the cost of the expert and ask for his instructions because the original estimate is no longer accurate.
Question 22
A claim for damages for professional negligence is settled on terms that the defendant surveyor must pay to the claimant damages of £60,000 together with the claimant’s legal costs, to be assessed on the standard basis.
In 2020 the claimant had entered into a written conditional fee agreement with her solicitor which provided for a success fee of 90%. The solicitor has calculated his professional charges at £20,000 before addition of the success fee and VAT.
What sum may the solicitor charge the client for his professional fees, net of VAT?
A. £15,000
B. £18,000
C. £30,000
D. £35,000
E. £38,000
E - £38,000
