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SQE > Professional Conduct > Flashcards

Professional Conduct Flashcards

1
Q

What are the 7 SRA Principles?

A
  1. Uphold constitutional principle of rule of law & proper administration of justice
  2. Uphold public confidence and trust
  3. Act with independence
  4. Act with honesty
  5. Act with integrity
  6. Encourage equality, diversity and inclusion
  7. Act in best interests of client
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2
Q

Where principles conflict, which take priority?

A

Those that safeguard wider public interest (over interest of individual client)

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3
Q

Who is responsible for complying with SRA Standards for individuals?

A

Individuals themselves

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4
Q

What is an undertaking? Who can give one and what CCS rule applies?

A

A statement, oral or in writing, that you or a 3rd party will/will not do something or cause something to be done
Any individual can give one in a law firm e.g. apprentices
CCS 1.3: must perform all undertakings, within agreed timescale, or in absence of one, in reasonable time

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5
Q

What happens if one does not carry out an undertaking?

A

It’s a serious disciplinary offence
Solicitor will be investigated for professional misconduct

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6
Q

How must a solicitor interact with the court?

A

They have an overriding duty to the court: shouldn’t waste their time, be in contempt of court etc

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7
Q

If a solicitor realises that a client has committed perjury or misled/attempted to, what should they do?

A

Cease to act unless client agrees to disclose the truth

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8
Q

How must a solicitor’s dealings be with a client?

A

They must provide a competent and timely service, taking into account their attributes, needs and circumstances
They must safeguard money and assets entrusted to them

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9
Q

What costs information must be made clear and accessible, as per the Transparency Rules?

A

Total or average cost of service
Basis for charges
Experience & qualifications of those carrying out work
Description/cost of disbursements
VAT info
What services are included
Circumstances client may have to make payments themselves

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10
Q

What Regulatory info must be displayed per Transparency Rules?

A

Must display SRA no. & digital badge on website
Letterhead must include SRA no. & words ‘authorised & regulated by SRA’

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11
Q

What are the rules on referrals?

A

Solicitors prohibited for personal injury or death claims - no fee for introducer for criminal proceedings
Must act in client’s best interest when referring them to 3rd party: not motivated by financial or other interest
Clients must be informed of any financial or other interest with a fee sharing arrangement shown to them in writing

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12
Q

What are 2 impacts of the Bribery Act 2020?

A

Due Diligence: must ensure business contacts have anti-bribery policy & comply with it
Corporate Hospitality/Gifts: Prevent giving/receiving gifts, hospitality or payments made out as ‘expenses’

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13
Q

What is the duty of confidentiality?

A

Must keep affairs of former and current clients confidential unless disclosure required or permitted by law, or client consents
Continues to apply after death

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14
Q

What is the duty of disclosure?

A

Must make client aware of all information material to matter of which you are aware of
Doesn’t extend to knowledge of others in the law firm

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15
Q

What are the exceptions to the duty of disclosure?

A

Where it could cause serious physical/mental harm to client or another
Disclosure is prohibited by legal restrictions
Client gives informed consent
Information contained in privileged document mistakenly disclosed
Duty of disclosure to another client

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16
Q

Which takes priority: duty of confidentiality or disclosure?

A

Duty of confidentiality

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17
Q

What are adverse interests?

A

Solicitor should not act where the client has an interest adverse to the interest of another former/current client for whom you hold confidential information on

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18
Q

When can a solicitor act where there are adverse interests?

A

Where effective measures have been taken to reduce risk of disclosure
Where current/former client gives informed consent (an understanding of any potential prejudice)

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19
Q

What are some examples of ‘effective measures’ for adverse interests?

A

Systems identifying confidentiality issues
Separate departments handling case
Separate servers

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20
Q

What are the 3 Cs?

A

Customer Due Diligence
Conflict Check
Client Care LEtter

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21
Q

What does customer due diligence consist of?

A

Identifying client & verifying their identity

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22
Q

When must CDD be carried out?

A

When establishing business relationship
When carrying out an occasional transaction
When suspect money laundering/terrorist financing

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23
Q

What 2 countries are on the FATF list?

A

Iran
North Korea

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24
Q

What are the 3 levels of CDD?

A

Standard
Enhanced
Simplified

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25
Q

What does standard CDD consist of?

A
  1. Identify & verify identity
  2. Identify beneficial owner: where person owns more than 25%; understand ownership & control structure
  3. Ongoing monitoring
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26
Q

What does enhanced CDD consist of?

A

Where there is a higher risk of ML, or where a customer is a politically exposed person (or their family/close associate is) (or where case is complex, unusually large or unusual pattern of transactions)
Includes enhanced ongoing monitoring

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27
Q

What does simplified CDD consist of?

A

Continue to comply with standard CDD but adjust it accordingly, carrying out sufficient monitoring

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28
Q

What does ongoing monitoring consist of?

A

Scrutiny of transactions throughout relationship
Reviewing existing records & keeping documents up to date

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29
Q

When can one rely on CDD carried out by another person?

A

Where a solicitor takes over from another
Must obtain all info needed, enter into written agreement to obtain info from 3rd party on request

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30
Q

What type of CDD is carried out for public listed companies?

A

Simplified

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31
Q

What is the general rule for where there’s a conflict of interest, or significant risk of one?

A

You don’t act

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32
Q

What are the 2 types of conflict of interest & their rules?

A
  1. Own Interest - cannot act
  2. Conflict of Interest (acting for 2 or more clients on same matter) unless (a) substantially common interest (b) competing for the same objective
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33
Q

What is the exception of ‘substantially common interest’ for conflict of interest?

A

Clear common purpose & a strong consensus on how it’s to be achieved & conditions:
- All clients give informed consent
- Effective safeguards put in place where appropriate
- Reasonable to act for all clients

34
Q

What is the exception of ‘competing for the same objective’ for conflict of interest?

A

Two or more clients competing, where if one wins, objective is unattainable to the other
Also must satisfy conditions of CCS outlined in SCI

35
Q

What is a client care letter and when is it sent?

A

Includes info on client instructions/options, responsibilities, costs information, whose dealing with the matter & complaints procedures
Must be sent at beginning of a matter

36
Q

What requirements are there for a solicitor’s level of service to clients?

A

Must be competent and timely
Must maintain competence
Must take into account client attributes, needs & circumstances
Must remain accountable when supervising others, for work carried out through them
Must ensure individuals you manage are competent & keep skills up to date

37
Q

When can you terminate a client’s retainer?

A

Can’t obtain clear instructions
If you’d be breaking the law or the Code
Client not paying the bills

38
Q

What rules are there on publicity?

A

Firm’s publicity should not be misleading
They cannot make unsolicited approaches in person or by telephone to public, unless former/current clients

39
Q

What are managers in firms responsible for?

A

Compliance within firms

40
Q

Who must check quality of work regularly in firms?

A

A suitable person - don’t have to be legally qualified but must have suitable experience, & refer upwards when out of their competence

41
Q

What 2 Compliance Officers must every firm have and what are their roles?

A

Compliance Officer for Legal Practice: ensure firm complies with regulatory/statutory obligations, records failures to do so & reports material failures to SRA
Compliance Officer for Finance & Administration: ensure compliance with Accounts Rules & report serious breaches to SRA

42
Q

Where does responsibility for breaches within law firms lie?

A

With managers (partners) - not compliance officers

43
Q

What are the requirements for a COLP/COFA?

A

Must be:
- manager/employee
- consent
- not be disqualified from acting as Head of Legal Practice, or Finance & Administration
+ For COLP, must be authorised to carry on reserved legal activities
The same person can be both COLP & COFA

44
Q

What are the exceptions to the rule that the SRA must approve any manager/owner of the firm?

A

A sole principle whose practice is authorised as recognised sole practice
SRA satisfied the manager isn’t involved in day-to-day strategic management, compliance with regulatory arrangements or carrying out reserved legal activities
If SRA decides so

45
Q

What type of manager must every firm have at least 1 of?

A

One who is a lawyer of E&W & has practice for min of 3 years
They supervise work undertaken

46
Q

To whom can a client complain to (in order)?

A
  1. Law Firm: every firm must have a complaints procedure
  2. Legal Ombudsman: after 8 weeks, can go here - they do not have powers to discipline or fine lawyers, their function is to resole complaints
  3. SRA: for complaints of misconduct, dishonesty or breaches of SRA rules
  4. Solicitors Disciplinary Tribunal: for serious breaches; can discipline solicitors
    After this, the court
47
Q

What organisations must be authorised by the SRA?

A

Reserved legal activities (unless exempt)
Immigration services
Claims management (unless FCA)
Regulated financial services (unless FCA)

48
Q

Who do individual lawyers ow duties to?

A

Clients
3rd parties (court & general public)
Colleagues
SRA & other regulators

49
Q

What reserved legal activities are there? (i.e. must be authorised)

A

Rights of Audience
Conduct of Litigation
Reserved Instrument Activities
Certain Probate Activities
Administration of Oaths

50
Q

What type of organisations can be authorised & what are they called when they are?

A
  1. Sole Practice (if practicing through company, not a sole practice)
  2. Legal Services Body: where all managers are lawyers - called a ‘regulated body’
  3. Licensable Body: where managers include lawyers & non-lawyers - called a ‘licensed body’
51
Q

What is the difference between a law centre and a legal advice centre?

A

Law Centre: gives legal advice & casework undertaken
Legal Advice Centre: public can attend for advice, no casework undertaken
Both don’t have to be authorised unless carrying out legal reserved activities

52
Q

What is required by the SRA to protect firms and their clients?

A

Professional indemnity insurance
If claim brought against them, must notify insurer immediately

53
Q

What types of discrimination/unlawful conduct are there under Equality Act 2010?

A
  1. Direct Discrimination
  2. Indirect Discrimination: not intended but effect disadvantages group with protected characteristic
  3. Harassment: (a) violating dignity/creating hostile environment (b) sexual conduct (c) less favourable treatment because of resistance to sexual harassment or related to sex/gender reassignment
  4. Victimisation: where A subjects B to a detriment as B has done protected act or thinks B has done so
54
Q

What do disability provisions require?

A

Active, anticipatory steps
Duty to make reasonable adjustments: change way things are done; make changes to overcome physical barriers; provide extra aids/services

55
Q

Under Equality Act 2010, what must firms & individuals do?

A

Provide reasonable adjustments for disabled people
Encourage diversity at all levels
Collect, report & publish data on workplace diversity
Uphold this in personal & professional life
Be fair & inclusive
Have complaints procedure

56
Q

What is a money laundering risk assessment?

A

Law firms must have an up-to-date anti-money laundering written record of all steps they’ve taken

57
Q

What are some warning signs of ML?

A

Instructions outside firm’s expertise
Unusual retainers e.g. sham litigation
Use of client accounts
Setting up a trust
Property purchase

58
Q

To whom should suspicions of ML be reported to?

A

Money laundering reporting officer (Nominated Officer)

59
Q

What must disclosure contain when reporting suspicions of ML?

A

Identity of those suspected
Whereabouts of laundered property if known
Information on which suspicions are based

60
Q

What should one do once suspicions are disclosed to MRLO?

A

If MRLO report to NCA, neither MRLO or fee earner should authorise any prohibited act unless:
- authorised by NCA
- 7 working days has passed from disclosure from NCA with no refusal to proceed
- NCA refused consent within 7 days but moratorium period (31 days from refusal to proceed) has expired

61
Q

Who do direct and non-direct involvement offences apply to?

A

Direct: everyone
Non-direct: people working in ‘regulated sector’

62
Q

What are the 3 types of direct involvement offences?

A
  1. S327: concealing, disguising, converting or transferring criminal property, or removing it from UK
  2. S328: entering into or becoming concerned in arrangement you know or suspect of ML
  3. S329: acquiring, using or possessing criminal property
63
Q

What defences are there to direct involvement offences?

A
  1. Authorised disclosure: to nominated officer, constable or customs officer - before, during or after (but if during or after, must have good reason & done so of own accord, in reasonable time)
  2. S338 disclosure and (if disclosure before act) having appropriate consent
  3. Not making a s338 disclosure but having reasonable excuse
  4. Prohibited act is carrying out function of any enforcement of POCA provision
64
Q

What is the ‘regulated sector’?

A

Includes different businesses, including providing tax advice, participating in financial & real property transactions, by firm or sole practitioner who provides legal/notarial services

65
Q

What are the 2 types of non-direct involvement offences?

A
  1. Failure to disclose: when know/suspect or have reasonable grounds to know/suspect; receiving info in course of business; can identify person or whereabouts of property, or info
  2. Tipping Off: that report has been made or investigations are being contemplated/carried out
66
Q

What are the penalties for direct/non-direct involvement offences?

A

Fine, imprisonment or both

67
Q

What is the general prohibition under FSMA?

A

No person can carry out a regulated activity unless an authorised person or an exempt body
If breached, it’s a criminal offence

68
Q

What is a regulated activity?

A

Specified investment + specified activity

69
Q

What are the 4 steps a solicitor should consider when considering if FSMA applies?

A
  1. Is it a specified investment? (shares etc)
  2. Is it a specified activity? (advising on merits of investment; dealing with, arranging deals of, or managing investments)
  3. Is activity excluded under FSMA? (If so, no authorisation necessary)
  4. If not, does it fufill s327 FSMA & Scope Rule 2?
70
Q

Is giving generic advice a specified activity?

A

no

71
Q

What activities are excluded under FSMA?

A

Regulated activities necessary as part of other services carried on in course of profession/non-investment business
Regulated activities with sale of body corporate (must be selling 50% or more of shares, or object is to acquire day-to-day control)
Dealing/arranging deals through an authorised person e.g. a bank

72
Q

What are the s327 FSMA conditions?

A

Person carrying on activity is member of a profession
Person must not receive commission, unless accounts it to client
Activity provided is incidental to provision of services i.e. small part of work being carried out
Person must only carry out activities for which he is permitted to under s332(2)

73
Q

What are the conditions under Scope Rule 2?

A

Activity must arise out of or be complementary to provision of services to particular client
Arise out of: should be related to activity in question
Complementary: arises naturally out of work solicitor does for the client

74
Q

If FSMA applies, what should a solicitor be?

A

Directly authorised
Or supervised by designated professional body

75
Q

When acting for a client selling shares, what restrictions are there are there?

A
  1. Can’t communicate a financial promotion unless authorised person has approved, it’s a sale of body corporate (50% or more), investment professionals or to high net worth companies/individuals
  2. There must be an approved prospectus where shares are offered to public: unless offer made to less than 150 people, or only sent to ‘qualified investors’
76
Q

What is a conditional fee arrangement?

A

No win, no fee
If successful, solicitor gets normal fee & success fee which can be up to 100% of normal fee
For PI cases, capped at 25% of damages excluding future loss and care

77
Q

What is a damages based arrangement?

A

No win, no fee
If successful, get proportion of damages
For PI, max of 25%
For employment tribunal, max of 35%
For all others, max of 50%

78
Q

What are the 2 types of legal expense insurance?

A

Before the Event: taken out before need for legal work arises; premiums generally not recoverable from other side
After the Event: taken out after dispute arose; more expensive; not recoverable

79
Q

What are the requirements for criminal legal aid?

A

Free legal aid at police station, by telephone, for non-imprisonable offences
1. Means Test: under 18 year olds, & those on welfare benefits go through automatically
- MC: weighted gross annual income (see notes for figures)
- Crown Court: assessed on income & capital (see notes for figures)
Can apply for eligibility reviews if failed
2. Merits Test: must show it’s in interests of justice to be legally represented - automatically pass if charged with indictable only offence, or an either-way offence sent to Crown Court
No right to appeal but can resend application

80
Q

What is the position on solicitors receiving gifts?

A

No specific rule against accepting gifts from clients but solicitors should make a judgement call based on SRA principles e.g. to act with independence; in best interests of each client
It is a question of degree and what is reasonable in the circumstances

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