UNIT 1 - Intro to SRA Principles & Codes, Obtaining Instructions and Standard of Service

Question 1

A client has complained about the manner in which a junior solicitor dealt with their case. In accordance with the firm’s complaints procedure, the complaint has been passed to the senior partner for investigation. The senior partner has a very heavy caseload and has not been able to consider the complaint. After several weeks, having heard nothing from the senior partner or the firm, the client takes the complaint to the Legal Ombudsman. The Legal Ombudsman finds that the original complaint is unjustified.

What action can the Legal Ombudsman take?

A) The Legal Ombudsman can take no further action against the senior partner or the firm.
B) The Legal Ombudsman may require the firm to pay compensation to the client but can take no further action with regard to the senior partner personally.
C) The Legal Ombudsman can both require the firm to pay compensation to the client and report the senior partner to the SRA.
D) The only action that the Legal Ombudsman can take is to ask the firm to apologise for the delay in dealing with the complaint.
E) The Legal Ombudsman may report the senior partner to the SRA but can take no further action with regard to the firm.

Answer 1

CORRECT ANSWER - C - Although the complaint was unjustified, it has not been dealt with properly and so the Legal Ombudsman may still take action, including requiring the client to be compensated for inconvenience and so on. The senior partner is in breach of Paragraph 8.5 because the complaint has not been dealt with promptly and the Legal Ombudsman may report the senior partner to the SRA for that reason.

Question 2

A solicitor is acting for a client in a litigation matter. Whilst the solicitor is presenting the client’s case at the final hearing, the solicitor forgets to refer to a recently decided case that would help the client’s case. Consequently, the judge finds in favour of the opponent.

Which of the following best explains the solicitor’s duties in this situation?

A)The solicitor must not tell the client about the failure to refer to the recent case because that would risk bringing the firm’s name into disrepute.
B) The solicitor is under no obligation to tell the client about the failure to refer to the recent case because the client has not yet indicated that they intend to bring a claim for negligence.
C) The solicitor is under no obligation to tell the client about the failure to refer to the recent case because any loss to the client will be covered by the firm’s insurance.
D) The solicitor has a duty to be open and honest with the client and so must immediately tell the client about the failure to refer to the recent case.
E) The solicitor has a duty to be open and honest with the client, but should delay telling the client about the failure to refer to the recent case until the solicitor has discussed the matter with the firm’s senior partner.

Answer 2

CORRECT ANSWER - D - Paragraph 7.9 requires a solicitor to be open and honest if things go wrong so the solicitor should tell the client about the omission immediately. The duty is not dependent on the client intending to bring a claim against the solicitor. There is no justification for delay. It is irrelevant that the firm’s reputation may be damaged or that any claim would be covered by insurance.

Question 3

A solicitor is instructed by a new client. In conversation at the first interview the solicitor explains that the client has a right to complain about the solicitor’s services and charges; how complaints may be made and to whom; and that the client has a right to make a complaint to the Legal Ombudsman and when such a complaint could be made. The solicitor says that they will send a letter to the client confirming the information. However, the solicitor forgets to send the letter.
A few days later the solicitor receives a letter from the client, alleging that at the interview the solicitor had been rude and made a sexist remark. In accordance with the firm’s complaints procedure the solicitor hands the letter to the firm’s senior partner. The client’s allegations about the solicitor are untrue.

Did the solicitor breach the SRA Code of Conduct for Solicitors, RELs and RFLs?

A) No, because the solicitor followed the firm’s complaints procedure.
B) No, because the solicitor provided the client with all the information about complaints required by the Code.
C) No, because the solicitor was not rude and did not make a sexist remark.
D) Yes, because the client is unhappy with the legal services they have received.
E) Yes, because the solicitor did not provide the information about complaints in writing.

Answer 3

CORRECT ANSWER - E - The solicitor acted correctly at the interview and properly complied with the complaints procedure. The solicitor provided all the required information about costs, but, in breach of Paragraph 8.3 did not provide that information in writing. The fact that the client is unhappy does not of itself place the solicitor in breach of the Code.

Question 4

A solicitor’s husband is caught by a speed camera travelling in his car at 100 mph on a 40 mph road. The husband already has several points on his driving licence and so, to avoid the husband being disqualified from driving, the solicitor makes a false statement to the police stating that she was driving the car at the time of the speeding offence.
The solicitor has been qualified for six months and works in her firm’s commercial property department.

Which of the following statements best describes the professional conduct sanctions that the solicitor is likely to face?

A) The solicitor will face mild sanctions in view of her junior status.
B) The solicitor will face no sanctions because the SRA Principles do not apply to a solicitor’s private life.
C) The solicitor will face mild sanctions because speeding is a minor offence.
D) The solicitor will face mild sanctions for failing to uphold public trust and confidence in the solicitors’ profession.
E) The solicitor will face severe sanctions for acting dishonestly.

Answer 4

CORRECT ANSWER - E - The SRA Principles apply both inside and outside practice. The conduct issue here is the making of the false statement. In making a false statement the solicitor has acted dishonestly. Dishonesty is always regarded as serious and will attract severe sanctions. The solicitor’s junior status is a relevant factor, but is unlikely to result in mild sanctions given such a deliberate and flagrant breach of Principle 4 (and Principles 2 and 5 and, arguably, Principle 1 by making a false statement to the police).

Question 5

A solicitor is instructed by a client in relation to a commercial contract. The solicitor attends a meeting with the other party’s solicitor to negotiate the terms of the contract. Later that day, the solicitor tells the client that they will immediately produce a written note of what was said at the meeting. The solicitor fails to make the written note.
Some months later, a disagreement arises over the implementation of one of the terms of the contract and the client believes that having sight of exactly what was said at the meeting will resolve the disagreement. The client contacts the solicitor asking for the written note.
The solicitor cannot recall the meeting in detail, but types up a note of what the solicitor thought must have been discussed and presents it to the client, dated with the date of the meeting.

Has the solicitor acted in accordance with the SRA Principles?

A) Yes, because the solicitor has acted honestly in taking the best course of action that they could in the circumstances.
B) Yes, because the solicitor’s duty to act in the best interests of the client outweighs all other considerations.
C) Yes, because the solicitor’s actions have saved their firm from professional embarrassment.
D) No, because the solicitor has not acted with integrity.
E) No, because the solicitor has not acted with independence.

Answer 5

CORRECT ANSWER - D - . In producing a backdated note and presenting it to the client as if it were an accurate record made a year earlier, the client has not acted with integrity (the solicitor has probably additionally breached Principle 2 and Principle 4). The solicitor’s independence is not an issue of the facts (option E is therefore wrong). Producing a note which may well be inaccurate is unlikely to be in the client’s best interests and in any event, Principle 7 does not outweigh all other considerations (option B is therefore wrong). Option C is wrong because acting simply in order to avoid professional embarrassment would not be complying with the Principles.

Question 6

A client instructs a solicitor to carry out the conveyancing work on the sale of a house. The client has put the house on the market for an asking price of £500,000. The solicitor thinks that the asking price is cheap. The solicitor suggests to his wife that she should buy the house. The solicitor’s wife buys the property for £500,000 and sells it three months later, making a profit of £75,000.

Which of the following best describes the professional conduct implications of the solicitor’s actions?

A) The solicitor did not do anything wrong because the client achieved their objective of selling the house.
B) The solicitor’s actions are likely to diminish public trust and confidence in the solicitors’ profession because a profit has been made at the client’s expense.
C) The solicitor did not do anything wrong because the client did not suffer a loss.
D) The solicitor acted with integrity because the solicitor did not make a profit himself.
E) The solicitor acted in the client’s best interests in securing the price the client wanted for the house.

Answer 6

CORRECT ANWER - B - The solicitor placed his own interests and those of his family above those of a client. The solicitor’s wife has made a profit at the client’s expense. Such behaviour is likely to diminish public trust and confidence in the profession and therefore breach Principle 2. The solicitor has not acted with integrity in making a profit for his family and so has breached Principle 5 (accordingly, option D is wrong). The client has achieved the objective of selling the house, but the solicitor did not act correctly (option A is wrong). The solicitor is in breach of Principle 2 irrespective of the fact that the client has not suffered a loss and was paid the asking price (accordingly, options C and E are wrong).

Question 7

A solicitor is invited by the manager of a local care home to give an informative talk to the home’s elderly residents on the importance of making a will. The solicitor gives the talk
to those residents who have expressed an interest in the subject matter and, in doing so, presents an even-handed and accurate explanation of the advantages and disadvantages of making a will. At the end of the talk the solicitor hands out leaflets advertising the solicitor’s firm’s will drafting services. The solicitor also offers to draw up a will there and then for any residents that would like the solicitor to do so.

Which of the following best describes the consequences of the solicitor’s actions under the SRA Code of Conduct for Solicitors, RELS and RFLs?

A) All of the solicitor’s actions breach the Code because they are unsolicited approaches to members of the public.
B) The solicitor is unlikely to have done anything wrong in giving the talk, but handing out the leaflets and offering to draw up wills breach the Code as unsolicited approaches to members of the public.
C) The solicitor is unlikely to have done anything wrong in giving the talk and handing out the leaflets, but offering to draw up wills breaches the Code as an unsolicited approach to members of the public.
D) None of the solicitor’s actions breach the Code because making a will is in the client’s best interests.
E) None of the solicitor’s actions breach the Code because the solicitor has acted in response to the manager’s invitation and so the solicitor’s approaches are not unsolicited.

Answer 7

CORRECT ANSWER - B - Giving an informative and even-handed talk to an interested audience
is unlikely to breach the Code (option A is therefore wrong). But in going beyond this the solicitor is publicising services through a targeted and intrusive approaches to members of the public, and consequently is in breach of Paragraph 8.9 (the solicitor may also be criticised for taking advantage of a vulnerable client (see 4.4.3)). Option E is wrong; the approaches are unsolicited by the ultimate clients and so the manager’s invitation is irrelevant. Option D
is wrong; it may be a good idea for the client to make a will, but this does not absolve the solicitor of their obligations under Paragraph 8.9.

Question 8

A solicitor has been acting in a divorce case for a successful local businessman. The divorce case is now at an end. The firm’s senior partner tells the solicitor to telephone the businessman in order to promote the firm’s corporate department in the hope that the businessman will transfer the corporate work arising from his various business interests from his current lawyers to the solicitor’s firm.

Which of the following best explains what the solicitor should do?

A) Make the telephone call because any breach of the SRA Code of Conduct for Solicitors, RELs and RFLs will be the senior partner’s responsibility.
B) Make the telephone call because such a call would not constitute an unsolicited approach to a member of the public.
C) Refuse to make the telephone call because such a call would constitute advertising.
D) Refuse to make the telephone call because the solicitor no longer acts for the client.
E) Refuse to make the telephone call because the solicitor could not make such a call and comply with their duty to act with integrity.

Answer 8

CORRECT ANSWER - B - Paragraph 8.9 prohibits a solicitor making unsolicited approaches to members of the public. However, a former client is an exception (accordingly, option D is wrong). There is nothing inherent in the making of the call which would place the solicitor in breach of the duty to act with integrity (option C is wrong). Solicitors are able to advertise. Option A is wrong – a solicitor is personally accountable for compliance with the SRA Code of Conduct for Solicitors, RELs and RFLs.

Question 9

An estate agent is undertaking a marketing campaign trying to acquire new clients by making targeted face-to-face visits to properties in the area worth over £1 million to see if the owners are willing to sell.
The estate agent contacts a solicitor and suggests that it would be mutually beneficial
for the estate agent to recommend to all clients acquired from the campaign that they instruct the solicitor to do the conveyancing work for them. The estate agent suggests that in return they are paid 1% of the solicitor’s conveyancing fees for each client who instructs the solicitor as a result of the recommendation.
The solicitor agrees to the estate agent’s suggestion and they enter into a written agreement to that effect. The agreement provides that every client must be informed of the estate agent’s financial interest in making the recommendation.

Does the agreement breach the SRA Code of Conduct for Solicitors, RELs and RFLs?

A) No, because the agreement is in writing.
B) No, because every client is informed of the estate agent’s financial interest in making the recommendation.
C) No, because the solicitor is not making any direct approach to the clients.
D) Yes, because solicitors are not permitted to share their fees.
E) Yes, because the estate agent is acquiring the clients by making unsolicited approaches to members of the public.

Answer 9

CORRECT ANSWER - E - Solicitors are permitted to enter into fee-sharing arrangements of this kind (as a result option D is wrong). Such agreements must be in writing (Paragraph 5.1(c)) and clients must be informed of the introducer’s financial interest (Paragraph 5.1(a)). However, the solicitor must ensure that clients are not recruited in a way which would be in breach of the Code of Conduct for Solicitors if done by the solicitor themselves (Paragraph 5.1(e)).
Here the clients are being recruited by cold calling and so the solicitor is in breach of the Code of Conduct for Solicitors (Paragraph 8.9).

Question 10

A solicitor is instructed by a long-standing client to draw up the client’s will. The client’s instructions are that, in recognition of all the work the solicitor has done for the client over the years, the will is to include a legacy of £10,000 to the solicitor.

Which of the following best describes what the solicitor should do?

A) Refuse to draw up the will.
B) Draw up the will, but omit the legacy.
C) Draw up the will, as instructed, after the client has taken independent advice.
D) Draw up the will, but make the legacy payable to the solicitor’s children.
E) Draw up the will, as instructed, after giving the client the details of local solicitors able to advise on wills.

Answer 10

CORRECT ANSWER C - The guidance from the SRA is that usually a solicitor should refuse to act where the client is proposing to make a significant gift to the solicitor or a family member etc unless the solicitor is satisfied that the client has taken independent advice. It is not sufficient simply to give the client details of other solicitors (option E is wrong). The solicitor should not take it upon themselves to deviate from the client’s express instructions (options B and D are wrong). Option A is wrong because it would be premature to refuse to draw up the will at this stage – the client’s instructions can be accommodated if the client agrees to take independent advice.

Question 11

A father and daughter are buying a property together. The daughter instructs a solicitor
to deal with the purchase on their joint behalf. The daughter explains that the father is elderly and too frail to attend at the solicitor’s office. The daughter tells the solicitor that the property is to be held by them as beneficial joint tenants, but that the father will be providing all the money for the purchase price. The daughter says that they are buying the property so that the daughter can move in to live with the father and care for him in his old age.

Should the solicitor act on the daughter’s instructions and immediately proceed with the purchase?

A) No, because a solicitor cannot accept instructions from a third party in any circumstances.
B) No, because the solicitor has reason to suspect that the instructions do not represent the father’s wishes.
C) Yes, because the daughter alone is the client.
D) Yes, because proceeding with the purchase is in the father’s best interests.
E) Yes, because, as the father’s carer, the daughter is automatically authorised to give instructions on his behalf.

Answer 11

CORRECT ANSWER B - The solicitor is being instructed by joint purchasers (option C
is wrong). The solicitor can accept instructions from a third party who is authorised to give those instructions (option A therefore overstates the matter). However, the daughter’s status as a carer would not give her that authority (option E is therefore wrong). The father’s age, frailty and the fact that he alone is providing the entire purchase price mean that there
is reason to suspect that the instructions do not represent the father’s wishes (option D therefore does not represent the best answer). The solicitor should not proceed until they have satisfied themselves that the instructions do accord with the father’s wishes. The solicitor cannot establish that the purchase is in the father’s best interests until the father’s wishes are established.

Question 12

A female solicitor is instructed by a male client in an acrimonious litigation matter. The case progresses properly for two months. Then the solicitor receives a letter from the client saying that the client has come to the view that women are too weak for robust litigation. The client goes on to say that he has now instructed a male solicitor in a different firm. The client asks for his file to be transferred to his new solicitor without delay.
On looking at the client’s file the solicitor sees that there are fees outstanding of £2,000 for the work that the she has completed to date on the case.

Which of the following best describes the professional conduct position?

A) The client cannot terminate the retainer because his grounds are discriminatory.
B) The solicitor can retain the file until her proper fees are paid.
C) The client cannot terminate the retainer because the solicitor has dealt with the case properly to date.
D) The solicitor must transfer the file to the new solicitor immediately, but is entitled to be paid her proper fees.
E) The client cannot terminate the retainer because he has not given reasonable notice to the solicitor.

Answer 12

CORRECT ANSWER B - The solicitor has a lien over the file until her proper fees are paid. Option D is wrong because the solicitor is under no obligation to hand the file over until payment unless ordered to do so by the court (although the solicitor may agree to hand over the file). Options A, C and E are wrong – a client has the right to terminate the retainer at any time and for any reason.

Question 13

A solicitor receives a telephone call from a client complaining about the bill which the solicitor sent to the client last week. The client wants the bill reduced, but the solicitor thinks that the bill is entirely justified.

Which of the following best describes what the solicitor should do?

A) Tell the client to take the complaint to the Legal Ombudsman.
B) Ask the court to assess the bill.
C) Refer the client to the firm’s complaints procedure.
D) Warn the client that the firm will charge a set fee for dealing with the complaint.
E) Sue the client for the full amount of the bill.

Answer 13

CORRECT ANSWER C - Complaints should be dealt with following the firm’s complaints procedure (option A accordingly is not the best answer). It is only appropriate to involve the Legal Ombudsman if the complaint cannot be concluded to the client’s satisfaction following the firm’s complaints procedure. Complaints must be dealt with free of charge (option D is therefore wrong). Having costs assessed by the court is the right of the client, not the solicitor (option B is wrong). Option E is not the best answer as to sue the client is clearly premature.

Question 14

A solicitor is instructed by a new client in relation to an acrimonious divorce. The breakdown of the marriage is very recent and, when giving instructions at the first meeting with the solicitor, the client becomes distressed.
The solicitor’s costs will be dealt with on the basis of an hourly charging rate. However, given the complexity of the case it is not possible for the solicitor to give an accurate figure for how much the case, as a whole, will cost.

Which of the following best describes how the solicitor should deal with the question of costs?

A) During the meeting the solicitor should give the client their hourly charging rate.
B) The solicitor should say nothing about costs as this will only cause the client more distress.
C) During the meeting the solicitor should tell the client about the hourly charging rate and warn that the overall cost will be high.
D) During the meeting the solicitor should tell the client about the hourly charging rate, explain the possible costs range and set a date for reviewing costs.
E) During the meeting the solicitor should explain that an accurate figure cannot be given for the overall cost of the case.

Answer 14

CORRECT ANSWER D - Paragraph 8.7 requires the solicitor to ensure that the client receives the best possible information about how the matter will be priced and the likely overall cost of
the matter. On these facts this would require the solicitor to explain the hourly charging rate as the basis of the charge (options B and E are therefore wrong). Additionally, as no accurate figure can be given for the overall costs, the solicitor should explain the costs range and set a date for reviewing costs (setting a costs ceiling would be an acceptable alternative). By simply referring to the hourly charging rate, option A does not go far enough. Finally, option C is not the best answer. Saying that the overall cost will be high is too vague and unhelpful to qualify as best possible information.

Question 15

A solicitor refers a client to a surveyor for advice on some structural damage to the client’s property. This is the first client that the solicitor has referred to this particular surveyor. Following the referral the solicitor is surprised to receive £150 from the surveyor. The surveyor explains that their usual practice is to pay £150 commission for any referral as a gesture of goodwill.

Which of the following best explains what the solicitor should do about the £150?

A) There is no need to tell the client about the £150 because it is a private matter between the solicitor and the surveyor, so the solicitor can just keep the payment.
B) The solicitor must tell the client about the £150, but the solicitor is entitled to keep the payment because it was just a gesture of goodwill.
C) The solicitor must immediately return the £150 because solicitors are not permitted to receive commission fees under any circumstances.
D) The solicitor must tell the client about the £150, and keep the payment, if the client agrees.
E) The solicitor must immediately pay the £150 to the client.

Answer 15

CORRECT ANSWER D - Paragraph 5.1 requires a solicitor to inform the client of any financial benefit the solicitor has in referring the client to another person. The client must therefore be told about the payment (option A is accordingly wrong). Paragraph 4.1 requires a solicitor
to account to the client for any financial benefit received, unless the client agrees otherwise. Option B therefore is wrong in that the solicitor can only keep the payment with the client’s agreement. Option C is wrong in stating that the solicitor must return the payment – the money will either go to the client or remain with the solicitor, depending on whether or not the client agrees that the solicitor can keep the money.
However, there is no requirement to actually pay it to the client. The solicitor can keep the payment with the client’s consent. Option E therefore is not the best answer.

Question 16

TRUE OR FALSE:

‘Should the Principles come into conflict, those which safeguard the wider public interest…. take precedence over an individual client’s interests.’

Answer 16

TRUE: This statement appears in the Introduction to the SRA Principles.

Question 17

Which one of the following statements is correct?

A) The SRA Principles only apply to qualified solicitors.
B) The SRA Principles are intended as guidance only and so can be departed from if necessary.
C) The SRA Principles do not apply to the conduct of solicitors outside their professional practice.
D) In any disciplinary proceedings, it would be necessary to show that a solicitor has acted both dishonestly and without integrity for a breach of the SRA Principles to be found.
E) The SRA Principles are all-pervasive and underpin all of the SRA’s regulatory arrangements.

Answer 17

CORRECT ANSWER E - The SRA Principles underpin not only both of the Codes of Conduct, but all of the rules and regulations issued by the SRA by which the profession is regulated.
A is wrong because the SRA Principles do not just apply to qualified solicitors. They apply also to managers and employees, including trainees, of regulated firms and bodies.
B is wrong because the SRA Principles are mandatory.
C is wrong because, with the exception of Principle 7, the SRA Principles also apply to behaviour outside professional practice.
D is wrong because whilst honesty (Principle 4) and integrity (Principle 5) are vitally important to solicitors, a breach of one or more of the other Principles could occur even without issues of honesty or integrity arising.

Question 18

Which one or more of the following statements is or are correct?

A) At the time of engagement, a client must be given a copy of the firm’s written complaints procedure.
B) Clients must be informed in writing at the time of engagement of their right to complain and how complaints can be made and to whom.
C) Clients must be informed in writing at the time of engagement of any right they have to complain to the Legal Ombudsman and when they can make any such complaint.
D) A complaints procedure should not involve any charges to clients for handling complaints.
E) All client complaints must be made in the first instance to the Legal Ombudsman.

Answer 18

CORRECT ANSWERS B,C,D - Clients must be informed in writing at the time of engagement about their right to complain (para 8.3(a) of the Code of Conduct), how to make a complaint (para 8.3(b) of the Code of Conduct) and any right they have to make a complaint to the Legal Ombudsman and when they can make such a complaint (para 8.3(c) of the Code of Conduct). Complaints are to be dealt with free of charge (para 8.5 of the Code of Conduct).
A and E are wrong. It is not a requirement under the Code of Conduct to give clients a copy of the written complaints procedure at the time of engagement. Complaints in the first instance should be dealt with in accordance with the firm’s procedure for handling complaints. Complaints direct to the Legal Ombudsman are permitted only in specified circumstances.

Question 19

You have just received a complaint from a client and, after going through the firm’s complaints procedure, the client is still dissatisfied. The client takes the matter to the Legal Ombudsman.

Which one of the following statements is wrong?

A) The Legal Ombudsman can impose a fine on your firm.
B) The Legal Ombudsman can direct your firm to reduce/repay fees.
C) The Legal Ombudsman can direct you to rectify a mistake at your firm’s expense.
D) The Legal Ombudsman can direct your firm to pay compensation to the client.
E) The Legal Ombudsman can direct you to apologise to the client.

Answer 19

CORRECT ANSWER A - A IS WRONG - The Legal Ombudsman does not have the power to impose a fine on a firm. However, if a complaint discloses any alleged professional misconduct on the part of the solicitor/the firm, it will inform the SRA which does have the power to impose a financial penalty on a solicitor or firm.
The Legal Ombudsman can make a determination containing one or more of the directions set out in statements B – E

Question 20

Which two or more of the following statements are correct?

A) You must ensure that clients are in a position to make informed decisions about the services they need, how their matter will be handled and the options available to them.
B) It is sufficient only to give the client details of the firm’s hourly charges at the outset.
C) You must ensure that clients receive the best possible information about the likely overall cost of the matter.
D) You must ensure that clients receive the best possible information about any disbursements incurred.
E) You must provide clients with a written quotation for the overall likely costs of the matter at the outset.

Answer 20

CORRECT ANSWER A, C, D - You must ensure that clients are in a position to make informed decisions about the services they need, how their matter will be handled and the options available to them (para 8.6 of the Code of Conduct) and clients must 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 (para 8.7 of the Code of Conduct). ‘Costs’ in para 8.7 is defined in the SRA Glossary as your fees and disbursements.
It is not sufficient only to tell your client about your firm’s hourly charges at the outset (or indeed during their matter) and there is no requirement to provide clients with a written quotation for the overall likely costs of the matter at the outset and so statements B and E are wrong.

Question 21

TRUE OR FALSE:
Where you receive a financial benefit as a result of acting for a client, you must pay it to the client.

Answer 21

FALSE - Although you do need to ‘properly account’ to a client for any financial benefit you receive as a result of their instructions (unless they have agreed otherwise) (para 4.1 of the Code of Conduct), that does not necessarily mean paying the money to the client. For example, you may ‘account’ by offsetting the amount received against your charges.

Question 22

Anita is a financial adviser. You and she have agreed that:
you will pay Anita a commission equal to 2.5% of the fee charged to any client she introduces to you; and
Anita will pay you 2.5% of any fees charged or commission she earns in relation to clients you introduce to her.

Which one of the following statements is wrong?

A) The clients Anita introduces to you must be informed of the financial arrangement between you.
B) The agreement with Anita must be in writing.
C) You cannot receive any payment in respect of clients you refer to Anita.
D) You must tell your clients about any financial benefit you receive from Anita as a result of introducing them to her and may have to treat this money as if it is the clients’ money.
E) You cannot make any payment in respect of clients Anita refers to you where those clients are the subject of criminal proceedings.

Answer 22

CORRECT ANSWER C - C IS WRONG - The key SRA Principles here are acting with integrity (Principle 5), independence (Principle 3) and in the best interests of each client (Principle 7). You can receive payment for referring clients to Anita provided that this does not place you in breach of the Principles, for example, because your independence is compromised as a result.
A, B, D and E are all correct. You can enter into an agreement to pay Anita for referrals, but clients must be informed of the fee sharing arrangement. The agreement must be in writing. You must ensure that clients are informed of any such financial benefit and ‘properly account’ for it to the clients. You cannot make (or receive) payments in respect of clients who are the subject of criminal proceedings. These are covered in paras 4.1 and 5.1 and of the Code of Conduct.

Question 23

Which one of the following statements is wrong?

A) Solicitors are not permitted to advertise on television.
B) Solicitors can publicise their practice by making unsolicited approaches to current clients.
C) Solicitors can publicise their practice by making unsolicited approaches to former clients.
D) Any publicity relating to a solicitor’s charges must be accurate and not misleading.
E) For the purposes of the obligations in the Code of Conduct, ‘publicity’ does not include press releases prepared on behalf of a client.

Answer 23

CORRECT ANSWER A - A IS WRONG - Solicitors are free to advertise, including on television, provided that they comply with the general law, SRA Principles and the Codes of Conduct.
B,C,D and E are correct. Unsolicited approaches to ‘members of the public’ are not permitted, but current and former clients are excluded from the prohibition (para 8.9 of the Code of Conduct). Any publicity in relation to a solicitor’s practice, including that relating to charges, must be accurate and not misleading (para 8.8 of the Code of Conduct). The term ‘publicity’ is widely defined in the Glossary but it does not include press releases prepared on behalf of a client.

Question 24

Which of the following statements is or are correct?

A) Where a client terminates the retainer, the solicitor is entitled to retain the client’s papers pending payment of the solicitor’s proper fees.
B) A solicitor can terminate the retainer for any reason.
C) Where a solicitor terminates the retainer, the solicitor is not entitled to retain the client’s papers pending payment of the solicitor’s proper fees.
D) A client may only terminate the retainer with good reason and on giving reasonable notice to the solicitor.
E )The retainer will be terminated automatically by law in certain circumstances.

Answer 24

CORRECT ANSWERS A & E - A solicitor has a lien over the client’s papers irrespective of who terminated the retainer. The retainer between a client and a solicitor will be terminated automatically by law in certain circumstances, for example, where a sole practitioner is declared bankrupt or loses mental capacity.
Whilst generally free to terminate the retainer, a solicitor cannot do so if it would be in breach of the law or his obligations under the SRA’s regulatory arrangements (which include the SRA Principles and Code of Conduct) (para 7.2 of the Code of Conduct). For example, a solicitor could not terminate a retainer if the decision was based on discriminatory grounds. A client has the right to terminate the retainer at any time for any reason.

Question 25

TRUE OR FALSE - A solicitor is permitted to pay a claims management company a fee for introducing clients to him who wish to seek damages following personal injury.

Answer 25

FALSE - Where it appears to the SRA that a solicitor has made (or received) a referral fee, the payment will be treated as such unless the solicitor is able to show otherwise (para 5.2 of the Code of Conduct). The term ‘referral fee’ is defined in the Glossary by reference to the relevant provisions of the Legal Aid Sentencing and Punishment of Offenders Act 2012, the result of which is that the payment or receipt of referral fees in claims for damages following personal injury (or death) is prohibited.

Question 26

A solicitor is dealing with a case for a client involving a claim for negligence against a firm of architects. At the outset of the matter, the solicitor gave the client a written estimate of likely overall costs of £20,000, including VAT, counsel’s fees and other disbursements. A month later, the solicitor decides that an expert technical report is needed at a cost of an additional £5,000 plus VAT.

Which of the following statements best describes what the solicitor should do next?

A) The solicitor should write to the client to inform him about the cost of the expert report and ask for instructions because a solicitor must get prior approval for every item of expenditure.
B) The solicitor should write to the client to inform him about the cost of the expert report and ask for his instructions because the original estimate is no longer accurate.
C) The solicitor does not need to do anything because the client was informed at the outset that the figure was an estimate only.
D) The solicitor does not need to do anything because the opposing party will be ordered by the court to pay the costs of the expert report.
E) The solicitor does not need to do anything because the cost of the expert report is a disbursement and it is only necessary to inform the client about changes to the amount of the solicitor’s legal fees.

Answer 26

CORRECT ANSWER B - you must ensure that clients receive the best possible information the likely overall cost of the matter (and any costs incurred) when appropriate as their matter progresses (para 8.7 of the Code of Conduct). By writing to the client at this stage in these terms, the client is being given the best possible information as to the likely overall costs of the matter because a significant sum is to be incurred in excess of the estimate provided at the outset. It is also good practice to ask the clients for instructions to incur such an item of expenditure before committing the client to it.

Unless expressly agreed with the client, it is not a requirement that a solicitor must get prior approval for every item of expenditure and so Option A is wrong. The obligation is to give the client the best possible information about the likely overall cost of the matter when appropriate as the matter progresses and not just at the outset and so initial estimates may need to be reviewed and updated and so Option C is wrong. There will be no guarantee that the opposing party will be ordered to pay the costs of the report and a client remains liable for the legal and other costs they incur and so Option D is wrong. Finally, Option E is wrong because the obligation to provide the best possible information about costs includes both the solicitor’s fees and disbursements (see the definition of ‘costs’ in the SRA Glossary).

Question 27

A solicitor has been instructed by a client in a divorce matter in relation to an application for financial orders. The client’s wife runs a highly successful global property investment company but the client is convinced that the company accounts which have been disclosed do not reflect the true net worth of the company or the profit it generates.
The solicitor’s brother-in-law is a forensic accountant who specialises in high value family cases. The solicitor has concluded that making a referral would not compromise his independence as the client’s legal adviser and that it would be in the best interests of the client because his brother-in-law is considered one of the best in his field.
The solicitor will not receive any financial benefit from the referral. He know that his brother-in-law will be grateful for the introduction.

Which of the following best describes what action the solicitor should take?

A) Ask one of the other members of the divorce team to refer the client to his brother-in-law.
B) Refer the client to another forensic accountant.
C) Get written confirmation from his brother-in-law that the solicitor will not get a financial benefit for the referral.
D) Recommend that the client instruct his brother-in-law direct and make no mention of the family connection.
E) Inform the client of the proposed referral and of the family connection.

Answer 27

CORRECT ANSWER E - Given that the solicitor has satisfied himself that the relevant SRA Principles of independence and acting in the best interests of the client will not be compromised by the referral as a result of the family connection, the client can be referred to his brother-in-law. However, in light of para 5.1(a) of the Code of Conduct, it would be appropriate for the solicitor to inform the client that the accountant is his brother-in-law i.e. the ‘interest’ which he has in making the referral, even though no financial benefit will be received for this.

The obligations under the Code would not be avoided by the solicitor asking one of the other members of the team to make the referral and so Option A is wrong. There is no need to refer the client to another forensic accountant, so long as the SRA Principles and Code of Conduct are complied with and so Option B is wrong. There is no requirement for written confirmation to be provided that the solicitor will not get a financial benefit for the referral – the key requirement here is for the client to be made aware of the interest that the solicitor has in making the referral, whether financial or not, and so Options C and D are wrong.