1 - Regulatory and Legal Environment

Question 1

Which documents comprise the SRA Standards and Regulations?

Answer 1

The SRA Standards and Regulations 2019 sets out the standards the SRA expects from individuals and businesses it regulates.

This includes:
SRA Principles (‘Principles’)
Code of Conduct for Solicitors, Registered European Lawyers and Registered Foreign Lawyers (‘CCS’)
Code of Conduct for Firms (‘CCF’)
SRA Accounts Rules - Regulates how law firms hold and manage clients’ money.

Question 2

What are the SRA’s 7 principles of ethical behaviour?

Answer 2

Guidelines for legal professionals to act in a way that:
1. Upholds the rule of law and the proper administration of justice.
2. Maintain public trust and confidence in the profession.
3. Act with indepdence.
4. Act with honesty.
5. Act with integrity.
6. Promote equality, diversity and inclusion.
7. Act in the best interests of clients.

Applies to all SRA-regulated individuals and firms. Covers personal and professional conduct. Public interest takes priority over individual client interests if there’s a conflict.

Question 3

What is the Code of Coduct for Solicitors (CCS)?

Answer 3

Outlines the standards expected by the SRA and the public from legal professionals (solicitors, paralegals, and apprentices).

It is a brief, approximately 8-page document.
Provides a framework for applying ethical standards.
Legal professionals must use judgment to apply the CCS in their situation.
Compliance is the personal responsibility of each individual.
CCS 7.3 requires cooperation with the SRA and other regulators during investigations.

Question 4

What is the Code of Conduct for Firms?

Answer 4

Outlines the standards and business controls expected of firms by the SRA.

Includes all CCS standards plus additional rules for firm operations.
Covers firms required systems and controls to comply with SRA rules.
Defines the responsibilities of firm managers.
Requires firms to appoint a Compliance Officer for Legal Practice (COLP).

Question 5

What is the Equality Act 2010

Answer 5

Consolidates and replaces previous discrimination laws and provides a legal framework to protect individual rights and promote equality.

Came into force in October 2010.
Protects against unfair treatment and promotes a fairer, more equal society.
Makes discrimination unlawful in areas such as employment, education, housing, services, public functions, and associations.
Covers areas previously not protected under earlier legislation.

Question 6

What are the protected characteristics under the Equality Act 2010?

Answer 6

The Act protects people from discrimination because of the following protected characteristics:

• Age
• Disability
• Gender reassignment
• Marriage and Civil Partnership
• Pregnancy and maternity
• Race
• Religion or belief
• Sex
• Sexual orientation

Question 7

What are the types of discrimination under the Equality Act 2010?

Answer 7

• Direct discrimination
• Indirect discrimination
• Harassment
• Victimisation

Question 8

What is the definition of direct discrimination under the Equality Act 2010?

Answer 8

Occurs when, because of a protected characteristic, A treats B less favorably than A treats or would treat others (section 13(1)).

Section 13(6)(b) states that special treatment given to a woman in connection with pregnancy or childbirth is not relevant when considering discrimination against a man.

Question 9

What is the definition of indirect discrimination under under the Equality Act 2010?

Answer 9

Occurs when a provision, criterion, or practice (PCP) disadvantages a group with a protected characteristic, even if unintended (section 19).

• A applies a PCP to B.
• B has a protected characteristic.
• A applies or would apply the PCP to others without that characteristic.
• The PCP puts B and others with the characteristic at a disadvantage.
• A cannot show the PCP is a proportionate means of achieving a legitimate aim.

Question 10

What is the definition of harassment under under the Equality Act 2010?

Answer 10

Occurs when A engages in unwanted conduct related to a protected characteristic that has the purpose of effect of:

• Violating B’s dignity, or
• Creating an intimidating, hostile, degrading, humiliating, or offensive environment for B (section 26(1)).

Key factors in determining effect:
- B’s perception
- The circumstances of the case
- Whether it is reasonable for the conduct to have that effect (section 26(4)).

Question 11

What is the definition of victimisation under the Equality Act 2010?

Answer 11

Protects individuals who do (or might do) protected acts such as bringing discrimination claims, complaining about harassment or becoming involved in another person’s discrimination complaint.

Occurs when A subjects B to a detriment because B has done, or A believes B may do, a protected act (section 27(1)).

Protected acts (section 27(2)):

• Bringing proceedings under the Equality Act 2010.
• Giving evidence or information in connection with such proceedings.
• Doing anything for the purposes of or in connection with the Equality Act.
• Alleging (expressly or otherwise) that A or another person has contravened the Equality Act.

Question 12

What do the disability provisions of the Equality Act 2010 require?

Answer 12

The disability provisions require active steps to ensure equal treatment for disabled people, going beyond prohibiting negative treatment to include making positive adjustments.

Section 29 (Provision of Services) states:

• Service-providers must not discriminate by refusing to provide a service to a disabled person (section 29(1)).
• When providing a service, service-providers must not discriminate against a disabled person in terms of: service conditions, termination of service, or by subjecting them to any detriment (section 29(2)).

Service-providers have a duty to make reasonable adjustments to accommodate disabled people.

Question 13

What is the duty to make reasonable adjustments under the Equality Act 2010?

Answer 13

The Duty to Make Reasonable Adjustments requires service providers to undertake a positive duty to remove or prevent barriers that disabled people may face, ensuring they can use services as close as possible to the standard available to non-disabled people.

If the adjustment is reasonable, it must be made.
The duty is anticipatory; providers must consider and plan for the needs of disabled people in advance.

The three requirements are:

• Change the way things are done (provision, criterion, or practice) if it creates barriers for disabled people.
• Where a physical feature puts disabled people using a service at substantial disadvantage, the service provider must take reasonable steps to remove or alter physical barriers in premises open to the public, or provide a reasonable alternative if necessary.
• Provide auxiliary aids or services to make it easier for disabled people to use the service.

Adjustments should be reasonable and proportionate to the size, nature, and resources of the organisation.

The service-provider may be ordered to pay compensation and may also be ordered to make the reasonable adjustments if not already done.

Question 14

What is a solicitors duty of confidentiality under the SRA’s Code of Conduct?

Answer 14

Solicitors must keep the affairs of current and former clients confidential (CCS 6.3, CCF 6.3).

• Confidentiality applies unless disclosure is required by law or the client consents.
• The duty extends to former clients, including those of previous firms, and continues even after the client’s death.

Question 15

What are the exceptions to the duty of confidentiality?

Answer 15

• Certain statutes empower government and other bodies, such as HMRC, to require disclosure of documents and information
• Statutory or regulatory reporting requirements, such as the Money Laundering Regulations 2017, Proceeds of Crime Act 2002, and anti-terrorism legislation.
• In defense of a civil claim (e.g., a negligence claim brought against you by a client) or a criminal prosecution brought against the solicitor or firm.
• In cases involving child abuse where a child’s health (mental or physical) is at risk, even if the client refuses consent for disclosure, you may have grounds to breach your duty of confidentiality by revealing the details to an appropriate authority.

As compliance with the above is often a difficult judgement call, it is recommended to consult with the firms COLP and SRA guidelines before proceeding.

Question 16

What is a solicitors duty of disclosure?

Answer 16

Under CCS and CCF 6.4, solicitors must disclose all material information to their client that is relevant to the client’s matter and of which they have personal knowledge.

• The duty is personal to the individual solicitor.
• Under CCF 6.4, it only applies to information the solicitor is aware of and does not extend to information known by others in the firm.

Question 17

What are the exceptions to a solicitors duty of disclosure?

Answer 17

The Duty of Disclosure does not apply in the following situations (CCS and CCF 6.4):

(a) Disclosure is prohibited by legal restrictions imposed for national security or crime prevention.
(b) The client gives informed consent, given or evidenced in writing, to the information not being disclosed to them.
(c) You have reason to believe that disclosure may cause serious physical or mental harm to the client or another person.
(d) The information is from a privileged document which you only have knowledge of because it was mistakenly disclosed.

Confidentiality to another client (X) may also prevent disclosure to a new client (Y):

• A solicitor must not act for Y unless Y gives informed consent to the non-disclosure of material information related to X.
• Informed consent means Y must understand the importance of the information, its relevance, and any potential prejudice in non-disclosure.
• Even with informed consent, the solicitor should continue acting only if it is in Y’s best interests and there is no real prejudice from the non-disclosure.

Question 18

How is material information defined in a solicitor’s duty of disclosure?

Answer 18

Under CCS 6.4, solicitors must inform clients of all material information relevant to their matter.

• Not defined in the 2019 Standards and Regulations but previously described as information that “might reasonably be expected to significantly affect the client’s decision-making.”
• This duty ensures clients can give informed instructions, but disclosure is limited by exceptions in 6.4(a)–(d) (e.g., national security, serious harm, privileged documents).
• The circumstances preventing disclosure under 6.4(a), (c), and (d) are rare.

Question 19

What happens if the duty of confidentiality and the duty of disclosure conflict?

Answer 19

When a solicitor owes a duty of confidentiality to one client and a duty of disclosure to another in relation to the same information, the duty of confidentiality takes precedence.

Example:

• A solicitor once defended a client in a criminal case where the client was convicted. Later, the solicitor is asked to represent the client’s spouse in a divorce, where domestic violence is alleged.
• Conflict: The conviction is confidential, but it is material to the new case and should be disclosed.
• Outcome: The solicitor cannot act for the new client because disclosing the information would breach the duty of confidentiality, and withholding it would prejudice the new client.

In such cases, the solicitor must stop acting for the new client to comply with both duties.

Question 20

What is the rule for acting in a matter where a client has an adverse interest under CCS 6.5?

Answer 20

You must not act for a client (Client A) in a matter where they have an interest adverse to another current or former client (Client B), for whom you hold confidential information that is material to the matter, unless:

(a) Effective measures have been taken to ensure there is no real risk of disclosure of the confidential information, or
(b) Client B has given informed consent, in writing, to you acting, including to any measures taken to protect their information.

Definition of Adverse Interest:

Not defined in the 2019 Standards, but the 2007 Code suggests it occurs where one party is, or is likely to become, the opposing party in negotiations or dispute resolution.

Question 21

What are the effective measures under CCS 6.5(a) to prevent the risk of disclosing confidential information?

Answer 21

Measures must be robust, including:

• Systems to identify confidentiality risks
• Separate departments handling each case, including non-fee earners
• Separate servers and printers to prevent access to information
• Encryption and password protection of information
• Awareness within the firm of who is working on each matter, so staff know who they can discuss cases with
• Organisational policies and staff training

Question 22

When does CCS 6.5(b) allow you to act despite holding confidential information for a former client?

Answer 22

If the former client (Client B) provides informed consent, given in writing.

• Informed consent requires that Client B understands any potential prejudice from non-disclosure of their information.
• Someone else in the firm, not involved in the matter, must seek Client B’s consent to avoid disclosure of confidential information.

Question 23

What is ‘State Decisis’?

Answer 23

Once a legal principle is established, it must be followed in future cases with similar material facts.

Hierarchy: Higher courts bind lower courts with their decisions. Lower courts must follow precedents set by higher courts.

Self-Binding: Courts are generally bound by their own previous decisions, but they may review and overturn them if appropriate.

Question 24

What are the rules of precedent?

Answer 24

Supreme Court - Binding on all inferior courts, but not always binding on itself.

Court of Appeal - All inferior courts, and itself.

The High Court - All inferior courts, and itself (except for decisions taken by a single Judge).

The Upper Tribunal - The First Tier Tribunal, inferior courts, and itself.

The First Tier Tribunal - Not binding but may be persuasive

Family Court, County Court, Crown Court, Magistrates’ Court - Not binding.

Privy Council - Persuasive, but not binding on any English / Welsh court.

Question 25

Why is the Supreme Court no longer binding on itself?

Answer 25

1966 Practice Statement:
Purpose: Allowed the Supreme Court to depart from its previous decisions if deemed appropriate.
Balance: Aimed to provide legal certainty, flexibility and allow for considerations, while allowing for the law’s development and preventing injustice. The SC currently applies this cautiously.

Question 26

What are the rules and exceptions regarding the Court of Appeal (Civil Division) and its ability to depart from its previous decisions?

Answer 26

General Rule: Bound by decisions of the Supreme Court/House of Lords.
Binds all courts below it.
Normally bound by its own previous decisions.

Exceptions: The Court of Appeal (Civil Division) is bound by its previous decisions with three limited exceptions in Young v Bristol Aeroplane Co Ltd

Conflicting Decisions: Must choose which of its own conflicting decisions to follow.
Conflict with Supreme Court/House of Lords: Must not follow a decision if it conflicts with a subsequent Supreme Court/House of Lords decision.
Per Incuriam: Not bound by a decision given per incuriam (When a court has overlooked or failed to consider an important legal principle or authority that would have affected the outcome of the case, made in error.).

Question 27

How does the Court of Appeal (Criminal Division) differ from the Civil Division regarding its decisions and exceptions?

Answer 27

General Rule:
Bound by decisions of the Supreme Court/House of Lords.
Binds all courts beneath it.
Follows the rule in Young v Bristol Aeroplane Co Ltd - established precedence practice in CoA.

Additional Exception: R v Taylor [1950] 2 KB 368: Recognises the need for flexibility to ensure justice, particularly where the liberty of a subject is involved.

Question 28

How does the issue of precedence impact Divisional Courts of the High Court?

Answer 28

Divisional Courts of the High Court are bound by its previous decisions and follow the exceptions which apply to the Court of Appeal

Question 29

How does the issue of precedence impact inferior courts?

Answer 29

Inferior courts do not bind themselves or other courts

Question 30

What is an undertaking?

Answer 30

A statement, given orally or in writing, that someone will do or refrain from doing something, and it is relied upon by the recipient.
Undertakings help overcome practical difficulties in transactions and expedite processes. They are trusted because solicitors are professional and reliable.

Examples include:
A seller’s solicitor promising to use part of the sale proceeds to discharge the seller’s mortgage, or a commitment to file a document with the court by a specific date.

Question 31

What are the CCS rules on undertakings, and what happens if you breach these?

Answer 31

CCS 1.3: All undertakings given must be performed within the agreed timescale or, if no timescale is set, within a reasonable time.

Consequences of Breach: Failure to perform an undertaking can lead to serious disciplinary action.
The Solicitors Regulation Authority (SRA) may investigate for professional misconduct.

Warning - An undertaking can be given by any individual in a law firm, including partners, lawyers, apprentices, and support staff. An undertaking does not need to be in writing; oral statements can also be valid. Junior staff should not overpromise beyond their control.

Question 32

What is good practice for solicitors with undertakings?

Answer 32

Record-Keeping: Maintain an effective system to record when undertakings are given and when they are discharged.

Implement procedures to ensure compliance with undertakings. For example, secure funds before giving an undertaking to cover costs, using electronic safeguards to prevent misuse of funds.

Distinctions and Restrictions: Differentiate between everyday transactional undertakings and those involving payments to other parties.
Restrict the authority to give cost-related undertakings to partners or senior lawyers.

Enforcement: Keep a register of undertakings that includes details of promises made, to whom, and by whom, as undertakings are specifically enforceable.

Question 33

What should the form of any undertaking be?

Answer 33

The form of any undertaking should be ‘SMART’:

• Specific: be clear as to what is involved
• Measured: it must be capable of quantification
• Agreed: both sides must agree the wording
• Realistic: within solicitor’s control
• Timed: must not be of unlimited duration

Question 34

What are the SRA CCS Rules for dealings with the court?

Answer 34

Under Section 50(1) of the Solicitors Act 1974, solicitors are considered ‘officers of the court’ and must conduct themselves with an overriding duty to the court.
CCS 2 outlines specific duties, including not wasting the court’s time, complying with court orders, and making only properly arguable assertions.

Question 35

What are the SRA rules regarding misleading the court?

Answer 35

General Rule (CCS 1.4):
Do not mislead or attempt to mislead clients, the court, or others through your actions or omissions.
If inadvertently misleading, inform the court immediately with client’s consent. If consent is not given, cease representation.
If aware of client’s perjury or misleading actions, cease acting unless the client agrees to disclose the truth.

Examples of Misleading the Court: Drafting unarguable documents or constructing unsupported facts.
Making unsubstantiated allegations of crime or fraud.
Calling witnesses with known false evidence.

CCS Provisions:
CCS 2.1: Do not misuse or tamper with evidence.
CCS 2.2: Do not influence or generate false evidence or persuade witnesses to alter their evidence.
CCS 2.3: Do not provide benefits to witnesses based on their evidence or case outcome.
CCS 2.4: Ensure assertions and submissions are properly arguable.
CCS 2.5: Do not place yourself in contempt of court and comply with court orders.
CCS 2.6: Avoid wasting the court’s time.
CCS 2.7: Alert the court to relevant cases, statutory provisions, or procedural irregularities that may materially affect the outcome.