Professional Conduct Flashcards
What is the Duty of Confidentiality in the context of business?
You MUST keep the affairs of your current and former clients confidential UNLESS disclosure is required or permitted by law or the client consents.
What is the Duty of Disclosure?
You MUST make your clients aware of all information material to their matter, with a few exceptions.
What should you be wary of regarding Client Conflicts of Interest?
You MUST NOT act for 2 or more clients if there is a conflict of interest or significant risk of conflict UNLESS exceptions apply.
What are the exceptions to acting for multiple clients with potential conflicts of interest?
- Clients have a substantially common interest
- Clients are competing for the same objective
What must be ensured when relying on the exceptions for client conflicts?
Clients’ informed consent, safeguards to protect confidentiality, and reasonable to act for all clients.
What happens when a transaction involves negotiation between clients?
There is almost always a significant risk of client conflict.
What is the solicitor’s duty when taking instructions from multiple clients?
You MUST take instructions from each client, and further instructions may be conducted through one of them if authorized.
What should you do if a conflict arises while acting for multiple clients?
Cease acting for at least one client unless confidentiality to the former client is not at risk.
What is the solicitor’s duty regarding giving undertakings?
Undertakings MUST NOT be given where the subject matter is outside the solicitor’s control.
What is meant by defrauding or preferring creditors?
Transferring assets out of the insolvent estate to put them beyond the reach of creditors or to favor a particular party.
What is the solicitor’s duty regarding integrity in financial matters?
You MUST act with integrity and NOT be complicit in misleading acts.
What are Abusive tax avoidance schemes?
Tax-planning arrangements that achieve results contrary to the clear intention of Parliament and exploit legal shortcomings.
What is the solicitor’s duty concerning abusive tax avoidance?
You MUST NOT mislead others and should not encourage actions aimed at abusive tax avoidance.
How can tax avoidance schemes be identified?
- Unexplained use of legal persons
- Payment in untaxed loans
- Circular transactions that reduce tax liabilities
What is the expectation of a solicitor when advising on tax issues?
Assist taxpayers to comply with their obligations on an open and honest basis.
What are the obligations of legal professionals regarding money laundering?
Implement checks, controls, and report suspicious activity to the National Crime Agency (NCA).
What does due diligence involve for solicitors?
Identifying and verifying the real identity of each client and understanding their source of funds.
What is the role of the Money Laundering Reporting Officer (MLRO)?
Responsible for receiving disclosures of suspected money laundering and determining if a Suspicious Activity Report (SAR) is needed.
What is ‘Tipping Off’ in the context of money laundering?
Saying anything about an internal disclosure or SAR to the client that could prejudice an investigation.
What are some warning signs of potential money laundering?
- Client is secretive about beneficial ownership
- Sudden change in ownership
- Unusual transaction patterns
What should you consider regarding unsolicited payments in client accounts?
They may be engineered for money laundering purposes.
What is the risk of returning funds in suspected money laundering cases?
You must obtain consent from the NCA before returning funds.
What is a series of smaller payments made in actual cash called?
A series of smaller payments made in actual cash
What indicates a significant increase in capital in a short time for a recently incorporated company?
A significant increase in capital in a short time for a recently incorporated company
