SQE 1 STYLE

Question 1

A company is the claimant in an action for negligence against a defendant accountancy practice. The claimant seeks damages for allegedly negligent professional advice provided by the defendant to the claimant. Standard disclosure has been ordered.

A two page letter sent to the claimant’s managing director by a financial adviser is included in the claimant’s list of documents. The financial adviser is independent of both parties to the litigation. The letter was found in the office of the claimant’s managing director, and the only copy is in the possession of the claimant’s solicitor. It is clear that the letter was written with the sole purpose of giving advice about drafting the letter before claim in the present litigation.

On what basis can the claimant claim a right to withhold inspection of the letter?

A. The letter is no longer in the control of the party disclosing it.

B. The letter is subject to legal advice privilege.

C. It would be disproportionate to the issues in the case to permit inspection of the letter.

D. The letter is subject to litigation privilege.

E. The letter was written after the cause of action accrued.

Answer 1

D - The letter is subject to litigation privilege.

Question 2

Last month a cycling enthusiast incorporated an online bicycle accessories shop. He is the sole director and he and a friend are the only shareholders.

Prior to incorporation of the company, the enthusiast negotiated a contract with a provider of cycling clothing. The contract was signed, prior to the receipt of the certificate of incorporation, by the enthusiast in his own name, on behalf of the company.

With whom, if anyone, does the benefit of the contract reside?

A. The company only.

B. The shareholders only.

C. The enthusiast only.

D. The enthusiast and the company jointly.

E. No one, the contract is void.

Answer 2

C - The enthusiast only.

Question 3

A woman in the UK asserts that her rights under Article 8 of the European Convention on Human Rights (ECHR) have been infringed by a public authority. Although she wishes to protest, she is unwilling to bring court proceedings under the Human Rights Act 1998 (HRA) against the public authority, because of the publicity she might receive, and because of the possible cost. The woman’s wealthy cousin is not affected by the alleged infringement, but says she would be willing to bring proceedings on behalf of the woman.

Can the cousin bring legal proceedings as the woman’s representative under the HRA?

A. Yes, because family representatives are specifically granted standing under the HRA.

B. Yes, because the HRA provides that proceedings may be brought by a representative where anonymity is a serious concern for the victim.

C. No, because only a victim of the infringement can bring an action and the cousin is not a victim.

D. Yes, because the court will be satisfied that the cousin, as a representative, is able to meet the expenses of the proceedings.

E. No, because a representative can only bring an action under the HRA where it replaces numerous individuals making identical claims.

Answer 3

C - No, because only a victim of the infringement can bring an action and the cousin is not a victim.

Question 4

The directors of a private limited company plan to sell some land which is owned by the company. The proposed purchaser of the land is known to all the directors, and is the father of one of the directors. The company’s directors are all also shareholders in the company.

The land has recently been independently valued at £70,000 and it is agreed that this will be the sale price.

The company’s most recent set of annual accounts states net profits of £770,000 and net assets of £600,000. The company has adopted the Companies (Model Articles) Regulations 2008 (unamended) as its articles of association.

Does the proposed sale of land require shareholder approval?

A. No, because the transaction falls under the directors’ general authority to manage the company’s business.

B. No, because the transaction involves the sale and purchase of land which is a non-cash asset.

C. No, because the transaction involves the sale and purchase of an asset at its fair market value.

D. Yes, because the transaction involves the sale and purchase of land whose value exceeds 10% of the company’s asset value.

E. Yes, because the company’s directors are all also shareholders in the company.

Answer 4

D - Yes, because the transaction involves the sale and purchase of land whose value exceeds 10% of the company’s asset value.

Question 5

The owner of a Greek restaurant orders wall tiles that include a border design showing the Greek flag. After the tiles have been fitted, the owner notices that the tiles are decorated with the flag of Uruguay. The owner wants the tiles to be replaced.

In a claim for breach of contract which of the following measure of damages is the court most likely to award?

A. Expectation

B. Reliance

C. Cost of cure

D. Loss of amenity

E. Mental distress

Answer 5

C - Cost of cure

Question 6

In March 2022, a claimant brought a claim against his plumber for a breach of contract alleged to have taken place in June 2016. The plumber operated as a sole trader.

In August 2022, the plumber died. The plumber’s assets are being dealt with by her personal representatives.

In October 2022, the claimant applied to substitute the plumber’s personal representatives for the deceased plumber in the claim, so that the claim could continue.

What powers does the court have to make a substitution for the plumber as a deceased party in the claim?

A. The court can order a new party to be substituted because the relevant limitation period was current when the claimant applied for the substitution.

B. The court cannot order a new party to be substituted because the relevant limitation period has expired.

C. The court can order a new party to be substituted because the relevant limitation period was current when the proceedings were started.

D. The court can order a new party to be substituted because the relevant limitation period was current when the plumber died.

E. The court cannot order a new party to be substituted because liability remains with the plumber’s business.

Answer 6

C - The court can order a new party to be substituted because the relevant limitation period was current when the proceedings were started.

Question 7

A man is given a bicycle as a gift. He later agrees to sell the bicycle for £25 to a woman but no payment has yet been made. He subsequently discovers that the bicycle is worth £390. He informs the woman that he no longer wishes to sell the bicycle because he was mistaken about its value.

What advice should the woman be given?

A. There is a contract because there is executed consideration.

B. There is a contract because sufficient consideration has been promised.

C. There is no contract because the consideration is insufficient.

D. There is no contract because adequate consideration has not been promised.

E. There is no contract because the consideration promised is only executory.

Answer 7

B - There is a contract because sufficient consideration has been promised.

Question 8

A decision is made by the Court of Appeal (Civil Division) in favour of the claimant. The defendant wishes to obtain permission to appeal.

Which of the following courts have the power to grant permission to appeal?

A. The Court of Appeal only.

B. The Supreme Court only.

C. The House of Lords only.

D. The Court of Appeal and the Supreme Court.

E. The Court of Appeal and the House of Lords.

Answer 8

D - The Court of Appeal and the Supreme Court.

Question 9

A man runs a very popular farmers market on a small farm on the edge of a village every Thursday. This results in the village becoming very busy on Thursdays when many of its roads are blocked by parked cars. Because of this, on Thursdays, a woman who runs a business in the village is unable to deliver her goods and she loses trade as a result.

Which cause of action should the woman pursue in tort?

A. Private nuisance.

B. Public nuisance.

C. Rylands v Fletcher.

D. Negligence.

E. Occupiers’ liability.

Answer 9

B - Public nuisance.

Question 10

An ordinary trading partnership has three partners: the senior partner, the managing partner, and the junior partner. The three partners share income profits equally and capital profits in accordance with their capital contributions as follows:

Senior partner: 50%

Managing partner: 30%

Junior partner: 20%

Five years ago, the firm purchased office premises. The premises have just been sold for a profit, realising a chargeable gain.

Who will be liable to pay tax on the gain realised on the sale?

A. Each partner will be liable to pay Capital Gains Tax on one third of the gain and the firm will have no liability.

B. The firm will be liable to pay Corporation Tax on the entire gain and the partners will have no liability.

C. Each partner will be liable to pay Income Tax on one third of the gain and the firm will have no liability.

D. The senior partner will be liable to pay Capital Gains Tax on 50% of the gain, the managing partner on 30% of the gain and the junior partner on 20% of the gain.

E. The senior partner will be liable to pay Income Tax on 50% of the gain, the managing partner on 30% of the gain and the junior partner on 20% of the gain.

Answer 10

D - The senior partner will be liable to pay Capital Gains Tax on 50% of the gain, the managing partner on 30% of the gain and the junior partner on 20% of the gain.

Question 11

A company has an accounting reference date of 31 December. It commenced trading in April, so that its first accounting period ended on 31 December of the year in which it commenced trading. During this first accounting period, the company made neither a trading profit nor a trading loss. However, the company did make a chargeable gain of £75,000 in the November, from the sale of a freehold property. The company made no capital losses during this first accounting period

In its second accounting period, which ended on 31 December the following year, the company made a trading loss of £45,000. The company made no capital gain and no capital loss during the second accounting period.

Can the trading loss of £45,000 made in the second accounting period be set off against the chargeable gain of £75,000 from the first accounting period?

A. Yes, because no trading or capital losses were incurred in the first accounting period.

B. No, because a trading loss can only be set off against trading profits from an earlier accounting period.

C. Yes, because the chargeable gain occurred within the 12 month period ending immediately before the accounting period in which the trading loss was incurred.

D. No, because the company was not carrying on business for a full 12 month period before the accounting period in which the trading loss was incurred.

E. No, because a trading loss can only be carried forward and set off against trading profits from a subsequent accounting period.

Answer 11

C - Yes, because the chargeable gain occurred within the 12 month period ending immediately before the accounting period in which the trading loss was incurred.

Question 12

A private limited company was incorporated with the Companies (Model Articles) Regulations 2008 (‘the Model Articles’) as its articles of association, but following further investment from some new shareholders, has recently adopted amended articles of association. The amended articles of association (‘the New Articles’) are based on the Model Articles but also include some special articles.

What must be filed with the Registrar of Companies following the adoption of the New Articles?

A. The board minutes proposing the changes to the Model Articles and the shareholders’ resolution to adopt the New Articles.

B. The shareholders’ resolution to adopt the New Articles and the prescribed fee.

C. The New Articles and the prescribed fee.

D. The shareholders’ resolution to adopt the New Articles and the New Articles.

E. The board minutes proposing the changes to the Model Articles and the New Articles.

Answer 12

D - The shareholders’ resolution to adopt the New Articles and the New Articles.

Question 13

In the course of a trial various arguments are put to the judge as to the exact meaning of a particular section of a relevant statute. When deciding the case, the judge first looks at the natural ordinary meaning of the words used. However, such an interpretation of those words results in an absurd meaning being given to the section. The judge therefore, in coming to his decision, interprets the words in a different way which does not result in an absurd meaning.

What method of statutory interpretation has the judge used?

A. The literal rule.

B. The mischief rule.

C. The extrinsic evidence rule.

D. The golden rule.

E. The intrinsic evidence rule.

Answer 13

D - The golden rule.

Question 14

Following a series of terrorist explosions in central London, the government invoked emergency prerogative powers. These powers enabled the government to take control over commercial buildings damaged in the explosions. The powers also enabled the government to deny the occupiers access to those buildings while forensic teams undertook the lengthy process of gathering evidence.

Recognising the impact on the occupiers of such buildings, Parliament passed legislation creating a compensation scheme allowing those affected to claim for any costs and losses incurred while those buildings are under the government’s control.

Notwithstanding this new legislation, the government is continuing to use the prerogative powers in order to avoid paying any such compensation under the statutory scheme.

Which of the following statements best summarises the legal position?

A. Where there is overlap between a prerogative power and a statute, neither prevails; the courts look to the common law for guidance.

B. Where there is overlap between a prerogative power and a statute, the statute prevails.

C. Where there is overlap between a prerogative power and a statute, the prerogative power prevails.

D. Where there is overlap between a prerogative power and a statute, the judge hearing the matter may refer to proceedings in Parliament for guidance.

E. Where there is overlap between a prerogative power and a statute, the judge hearing the matter may refer to a higher court for guidance.

Answer 14

B - Where there is overlap between a prerogative power and a statute, the statute prevails.

Question 15

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.

Answer 15

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 16

A non-UK national living in the UK has allegedly committed a serious crime in his country of origin. His country of origin is not a signatory to the European Convention on Human Rights (‘the Convention’).

The UK government has issued an order for the deportation of the man to his country of origin. However, the man asserts that evidence will be used against him in respect of the alleged crime which has been obtained by the use of torture. The man appeals under the Convention against the deportation order in the High Court and the High Court accepts the man’s assertion.

Which of the following best explains whether the High Court would uphold the deportation order?

A. It would not uphold the order because the Convention provides that member countries must secure the Convention rights for everyone within their jurisdiction.

B. It would not uphold the order because the merits of deportation decisions involving the human rights of nationals from non-signatory countries must be considered by the European Court of Human Rights.

C. It would uphold the order because the UK government is not responsible for how another sovereign state obtains evidence for use in criminal trials.

D. It would uphold the order because non-UK nationals do not benefit from UK human rights protection.

E. It would uphold the order because the man has allegedly committed a serious crime and the Convention is not intended to protect criminals.

Answer 16

A - It would not uphold the order because the Convention provides that member countries must secure the Convention rights for everyone within their jurisdiction.

Question 17

A man instructs his solicitor to act for him in the purchase of the entire issued share capital of a private limited company from another company. The solicitor advises on the share purchase and helps to prepare and negotiate all the necessary documentation.

Neither the solicitor nor his firm is authorised by the Financial Conduct Authority to carry on a ‘regulated activity’ as defined in the Financial Services and Markets Act 2000 and related secondary legislation.

Has the solicitor breached the general prohibition against carrying on a regulated activity?

A. Yes, because the solicitor has given advice on the purchase of shares in a specific company and no exclusion or exemption applies.

B. Yes, because the transaction involves the purchase of the entire issued share capital of the company and no exclusion or exemption applies.

C. No, because an exemption applies to professional firms which are supervised by the Solicitors Regulation Authority when they engage in corporate work.

D. No, because an exclusion applies if the transaction relates to the purchase of any number of shares in a private limited company.

E. No, because an exclusion applies if the transaction involves at least 50% of the voting shares in the company.

Answer 17

E - No, because an exclusion applies if the transaction involves at least 50% of the voting shares in the company.

Question 18

A claimant is bringing a claim against a defendant, seeking damages for breach of contract. The claimant alleges that the parties agreed to an oral amendment to the contract. The defendant denies that the parties had any such agreement. The only evidence on this issue, which will determine the outcome of the claim, is the conflicting oral evidence of the claimant and the defendant.

Which of the following best describes the burden of proof, if any, which the court will apply in deciding the issue?

A. The burden lies with the defendant to disprove the claimant’s allegation beyond reasonable doubt.

B. The burden lies with the defendant to disprove the claimant’s allegation on the balance of probabilities.

C. Neither party bears the burden of proof and the judge will order a retrial if the judge cannot be sure which party’s evidence is correct.

D. The burden lies with the claimant to prove the allegation on the balance of probabilities.

E. The burden lies with the claimant to prove the allegation beyond reasonable doubt.

Answer 18

D - The burden lies with the claimant to prove the allegation on the balance of probabilities.

Question 19

A man is using his new mountain bike which is a state of the art product. It has a specially developed metal frame which enhances the bike’s performance over rough terrain. However, due to metal corrosion in some of the screws, which was unforeseeable, the handle bar snaps in two when the man is using it. He breaks both wrists.

Which of the following best explains whether the man can recover damages for his injuries under the Consumer Protection Act 1987?

A. Yes, because the bike is defective.

B. Yes, because there has been a breach of the duty of care.

C. Yes, because his injuries are not too remote.

D. No, because the injuries were not foreseeable.

E. No, because damages for personal injuries are not awarded under the Consumer Protection Act.

Answer 19

A - Yes, because the bike is defective.

Question 20

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

Answer 20

E - £38,000

Question 21

In an appeal before the Court of Appeal, the appellant relies in argument on an earlier decision of the Judicial Committee of the Privy Council (JCPC) which indicates that the appeal should be allowed. The respondent relies in argument on an earlier decision of the Court of Appeal which indicates that the appeal should not be allowed.

How should the Court of Appeal treat the two decisions to which it has been referred?

A. The court should consider itself bound by the earlier decision of the JCPC.

B. The court should consider itself bound by the earlier decision of the Court of Appeal.

C. The court should consider itself bound by both earlier decisions and must transfer the appeal to a higher court.

D. The court should treat both earlier decisions as having persuasive value only and must decide which of the two to follow.

E. The court should treat both earlier decisions as without precedent value and should make its decision without regard to either.

Answer 21

B. The court should consider itself bound by the earlier decision of the Court of Appeal.

Question 22

A political party decides to hold a meeting in the central square of a provincial city. One of its leaders is expected to make a speech which will annoy many members of the local population.

Which of the following statements best describes the powers of the police in this situation?

A. The Chief Constable may impose conditions in relation to the meeting in order to prevent serious disorder.

B. The organisers must obtain permission to hold the meeting from the Chief Constable.

C. The Chief Constable can prohibit the meeting if he has insufficient resources to police it.

D. The meeting can only be regulated by the police if more than 200 persons attend.

E. Any police officer can insist that the meeting cease.

Answer 22

A. The Chief Constable may impose conditions in relation to the meeting in order to prevent serious disorder.

Question 23

Three clients decide to go into business together. They each invest equal amounts of capital in the business, and agree to share the profits equally. After two years, the business has made a loss and the clients no longer believe the business is viable.

Have the three clients been working in partnership together?

A. Yes, because they are in business together and intended to make a profit even though they have made a loss.

B. Yes, because they agreed to invest equal amounts of capital in the business.

C. No, because they have not entered into a written partnership agreement.

D. No, because they have not registered themselves as a partnership.

E. No, because they agreed to share profits equally but did not agree how to share losses between them.

Answer 23

A - Yes, because they are in business together and intended to make a profit even though they have made a loss.

Question 24

A company has created a fixed charge in favour of its bank over machinery owned by the company and used in the company’s factory. The company is solvent. The fixed charge has been correctly registered at Companies House. The company now wishes to sell some of the machinery and seeks legal advice on how to proceed.

What advice should the company receive in relation to the sale of the machinery?

A. The company can proceed to sell the machinery freely because the charge has not yet crystallised.

B. The company can only sell the machinery if it does so with the consent of the bank as chargeholder.

C. The company can only sell the machinery if the bank is a party to the sale because the bank has legal title to the machinery.

D. The company can only sell the machinery with the consent of its unsecured creditors.

E. The company can proceed to sell the machinery once it has registered the sale at Companies House.

Answer 24

B - The company can only sell the machinery if it does so with the consent of the bank as chargeholder.

Question 25

A company (‘the Retailer’) entered into a contract with another company (‘the Supplier’) to purchase 30,000 flat-pack boxes at a price of £60,000. The Retailer paid a deposit of £20,000.

When delivered, the boxes were defective and the Supplier was unable to supply replacement boxes. The Retailer rejected the boxes and did not pay the balance of the purchase price. To avoid incurring further losses, the Retailer obtained replacement boxes from another supplier for £70,000.

The Retailer has followed all appropriate pre-action procedures, and the Retailer’s solicitor is now ready to draft and issue a claim form.

Ignoring interest, what sum can the Retailer properly claim against the Supplier?

A. £70,000

B. £10,000

C. £30,000

D. £20,000

E. £60,000

Answer 25

C - £30,000

The £20,000 they lost plus the £10,000 cost difference between the two suppliers.

Question 26

Question 28

A junior employee at a summer camp for young people has been convicted of an assault on a participant in the camp. The victim is suing the camp organisers for damages for psychological trauma on the basis that they are vicariously liable for the actions of the employee.

Which of the following best describes whether vicarious liability will apply?

A. Vicarious liability will exist if the employee’s act is sufficiently closely connected to his employment.

B. Vicarious liability cannot apply to criminal behaviour.

C. Vicarious liability will apply only if the assault occurred in working hours.

D. Vicarious liability can only apply to senior employees.

E. Vicarious liability will not apply because the employer obtained no benefit.

Answer 26

A - Vicarious liability will exist if the employee’s act is sufficiently closely connected to his employment.

Question 27

A solicitor acts for a client in relation to the acquisition of a private limited company. Two days before the transaction is due to complete the solicitor suspects that his client will be using the transaction to launder money. The solicitor reports this to the nominated officer who makes a suspicious activity report to the relevant authority.

What action should the solicitor now take?

A. Proceed with the transaction as the solicitor has made the disclosure to the nominated officer.

B. Proceed with the transaction only after receiving authorisation to do so from the nominated officer.

C. Proceed with the transaction after a period of three working days if no response is received from the relevant authority.

D. Explain to the client that the solicitor cannot proceed with the transaction as a suspicious activity report has been made.

E. Explain to the client that a suspicious activity report has been made and then proceed with the transaction.

Answer 27

B. Proceed with the transaction only after receiving authorisation to do so from the nominated officer.

Question 28

In March a buyer entered into a contract for the purchase of a children’s nursery because of a fraudulent statement made by the seller in January about the previous year’s sales figures.

In April, after purchasing the nursery, the buyer employed a builder to carry out extensive building works to the nursery including demolishing outbuildings and adding an extension.

In May the buyer discovered the fraudulent statement was false and decided that he wished to rescind the contract.

Could the buyer rescind the contract?

A. No, because rescission is not an available remedy for misrepresentation.

B. No, because a third party has acquired rights.

C. No, because the buyer has affirmed the contract.

D. No, because restitution is impossible.

E. No, because there is a statutory bar under the Misrepresentation Act 1967.

Answer 28

D - No, because restitution is impossible.

Question 29

A disabled employee at a firm of solicitors has requested that the firm buy some computer software for him to use at work. This software enables a person with the employee’s disability to use a computer more effectively. The partners in the firm want advice on their obligations under the Equality Act 2010 (‘the Act’).

What must the partners in the firm do to meet their obligations under the Act?

A. They must make substantial adjustments to ensure that the disabled employee is not placed at a disadvantage compared to those who are not disabled.

B. They must make reasonable adjustments to ensure that the disabled employee is not placed at a substantial disadvantage compared to those who are not disabled.

C. They must make adjustments to ensure that the disabled employee is not placed at a significant disadvantage compared to those who are not disabled.

D. They must make significant adjustments to ensure that the disabled employee is not placed at a disadvantage compared to those who are not disabled.

E. They must make adjustments to ensure that the disabled employee is not placed at an unreasonable disadvantage compared to those who are not disabled.

Answer 29

B - They must make reasonable adjustments to ensure that the disabled employee is not placed at a substantial disadvantage compared to those who are not disabled.

Question 30

A solicitor in a law firm has received a phone call from the managing director of a private limited company incorporated in the UK, which is a new client. The managing director wants to know why the solicitor’s firm is asking for documents to verify the identity of the company’s shareholder. The company’s shareholder lives in Brazil and owns and holds the entire shareholding of the company.

Which of the following responses best explains the advice the solicitor should give to the managing director?

A. The solicitor is under an obligation to identify and verify the identity of the company’s shareholder because the shareholder lives outside the UK.

B. The solicitor is under an obligation to identify and verify the identity of the company’s shareholder because the shareholder lives in Brazil.

C. The solicitor is under an obligation to identify and verify the identity of the company’s shareholder because the shareholder owns more than 25% of the shares.

D. The solicitor is under an obligation to identify and verify the identity of the company’s shareholder because of the structure of the company and the way the shares are held by the shareholder.

E. The solicitor is under an obligation to identify and verify the identity of the company’s shareholder because there is only one shareholder in the company.

Answer 30

C - The solicitor is under an obligation to identify and verify the identity of the company’s shareholder because the shareholder owns more than 25% of the shares.

Question 31

A man engaged an estate agent to sell his property. The terms of their agreement were contained in a written document. The agreement provided for payment of commission to the estate agent on completion of a sale, provided that the estate agent introduced the purchaser.

The sale of the property completed and a dispute arose as to whether the estate agent had introduced the purchaser. The estate agent brought proceedings against the man for payment of the commission alleged due under the written agreement. The proceedings were successful at trial, resulting in an award of damages to the estate agent of £12,000.

What, if any, order for costs might be expected in the circumstances of this case?

A. No order for costs because the claim arose from a consumer contract within the meaning of the Consumer Rights Act 2015.

B. An order in favour of the estate agent confined to reimbursement of court fees paid because the claim is a small claim.

C. No order for costs because the claim is a small claim..

D. An order in favour of the estate agent for fixed recoverable costs only.

E. An order in favour of the estate agent for costs on the standard basis, summarily assessed at the conclusion of trial.

Answer 31

D - An order in favour of the estate agent for fixed recoverable costs only.

Question 32

A company buys drums of an industrial cleaning acid from a woman and stores them in its factory. The drums are not suitable for the storage of the acid and the acid leaks causing damage to the floor of the factory.

A company employee sees that damage to the floor is being caused by the leak but fails to move the drums. The drums could have been moved at no cost to the company. The company claims £5,000 which is the cost of the repair to the floor. The woman refuses to pay that amount arguing the damages payable should be lower.

Will the woman succeed in her argument?

A. Yes, because the company is under a duty to minimise its losses by moving the drums.

B. Yes, because the company is guilty of contributory negligence by not moving the drums.

C. No, because the woman must compensate the company for all losses flowing from the breach.

D. No, because the woman must compensate the company for all losses that are in the reasonable contemplation of the company.

E. Yes, because there is a break in the chain of causation.

Answer 32

A - Yes, because the company is under a duty to minimise its losses by moving the drums.

Question 33

A solicitor has been instructed by a client company that is suffering cash flow difficulties. The solicitor has been instructed by the client to advise on its directors’ duties in respect of monitoring the company’s financial position. In the course of discussions, the client mentions that it is considering attempting to improve its financial position by investing in equity securities and asks whether the solicitor can recommend any stockbrokers.

The solicitor’s brother is a partner in a firm of stockbrokers which is authorised by the Financial Conduct Authority and which has made substantial returns for the solicitor and other clients.

The solicitor has concluded that making the referral would:

(i) not in any way compromise his independence as the client’s legal advisor; and

(ii) be in the best interests of the client because the stockbrokers are the best available in this field.

The solicitor will not get a financial benefit from the referral. The solicitor knows that the brother would be grateful for the business introduction.

Which of the following steps should the solicitor take next?

A. Cease to act for the client.

B. Refer the client to an individual at the stockbrokers other than the solicitor’s brother.

C. Get written confirmation from the brother that the solicitor will not get a financial benefit in return for the business referral.

D. Inform the client that the solicitor’s brother is a partner of the stockbrokers.

E. Ask somebody else in the solicitor’s firm to refer the client to the stockbrokers.

Answer 33

D - Inform the client that the solicitor’s brother is a partner of the stockbrokers.

Question 34

A client objects to a decision which has been made to grant planning permission for the building of a supermarket on land near his home. The client has discovered that the chairman of the planning committee that made the decision is a non-executive director of the supermarket chain in question.

Which of the following best describes the status of this decision?

A. Only where the facts suggest to the court that there was in fact a conflict of interest and that the decision was in fact biased will the decision be held unlawful.

B. If the client can prove that a fair minded and informed observer would naturally conclude that there was a conflict of interest, the decision will be held to be automatically biased and thus unlawful.

C. For the decision to breach the rule against bias and thus be held unlawful, the client must prove to the court on a balance of probabilities that the chairman was actually biased.

D. Only if the facts suggest to the court that a fair minded and informed observer would conclude that the decision was biased will the decision be held unlawful.

E. If the facts suggest to the court that a fair minded and informed observer would conclude that there was a real possibility of bias, the decision will be held unlawful.

Answer 34

E - If the facts suggest to the court that a fair minded and informed observer would conclude that there was a real possibility of bias, the decision will be held unlawful.

Question 35

A solicitor is advising a client on an employment contract in respect of a position that the client has been offered in a start-up company. The client currently has a permanent position at an established company.

The following day the solicitor sits next to a new acquaintance at a golf club dinner. The new acquaintance tells the solicitor that he is concerned that the business he works for is bound for financial failure because its key customer is to be taken into receivership shortly. The new acquaintance then tells the solicitor the name of the business he works for. Much to the solicitor’s surprise it is, by coincidence, the start-up company.

Is the solicitor obliged to inform the client of the reported concerns about the financial prospects of the start-up company?

A. No, because the information was obtained in the course of the solicitor’s personal life and therefore does not impact on his professional obligations.

B. No, because the duty of confidentiality overrides the duty of disclosure.

C. No, because information obtained from clients must be kept confidential unless disclosure is required or permitted by law or the client consents.

D. Yes, because the information is material to the client’s matter.

E. Yes, because the duty of disclosure overrides the duty of confidentiality.

Answer 35

D - Yes, because the information is material to the client’s matter.

Question 36

A man is employed by a roofing company to repair roofs. The role requires him to wear special gloves in order to protect his hands when he handles roof tiles. Whilst standing on some scaffolding, negligently erected by the roofing company, he falls off, suffers serious injury to his head and brings a claim. He carelessly failed to wear the gloves at the time.

Which of the following best describes whether the company can successfully claim contributory negligence on the part of the roofer?

A. The company cannot claim contributory negligence because the roofer’s carelessness did not cause or contribute to the injury.

B. The company cannot claim contributory negligence because the roofer did not owe the company a duty of care.

C. The company can claim contributory negligence because the roofer’s carelessness caused or contributed to the injury.

D. The company can claim contributory negligence because the roofer’s carelessness materially increased the risk of injury.

E. The company can claim contributory negligence because the roofer owed the company a duty of care.

Answer 36

A - The company cannot claim contributory negligence because the roofer’s carelessness did not cause or contribute to the injury.

Question 37

A solicitor acts for a client who is raising finance secured against his home to fund his new business. The solicitor will be providing advice and preparing all the necessary documentation in connection with the mortgage.

The client asks the solicitor to explain the key differences between a repayment mortgage and an endowment mortgage. Neither the solicitor nor his firm is authorised by the Financial Conduct Authority to carry on a regulated activity.

Can the solicitor give the explanation requested about the types of mortgages?

A. Yes, because such advice is a necessary part of the provision of his legal services.

B. Yes, because he is subject to the Solicitors’ Financial Services (Scope) Rules and therefore falls within an exemption from the Financial Services and Markets Act 2000.

C. Yes, because the provision of generic advice is outside the scope of the Financial Services and Markets Act 2000.

D. No, because such advice does not fall within an exemption from the Financial Services and Markets Act 2000.

E. No, because he is not authorised by the Financial Conduct Authority to give advice in respect of either type of mortgage.

Answer 37

C - Yes, because the provision of generic advice is outside the scope of the Financial Services and Markets Act 2000.

Question 38

The UK government has introduced a Parliamentary Bill (‘the Bill’) to repeal a UK statute. The government is able to command a majority in the House of Commons, but the Bill is opposed in the House of Lords. The Parliament Acts 1911 and 1949 are invoked in order to pass the Bill into law.

What further steps are required for the Bill to become law?

A. The Bill will require approval in the House of Commons and to receive Royal Assent.

B. The Bill will require approval in the House of Commons and the House of Lords and to receive Royal Assent.

C. The Bill will require approval in the House of Commons and in a UK referendum.

D. The Bill will require approval in the House of Commons, the House of Lords and in a UK referendum and to receive Royal Assent.

E. The Bill will require approval in the House of Commons, the House of Lords and in a UK referendum.

Answer 38

A - The Bill will require approval in the House of Commons and to receive Royal Assent.