UNIT 2 - Confidentiality, Conflicts of interest, Undertakings and Duties to Third Parties

Question 1

A solicitor is acting for the claimant in a contract dispute. Shortly before the final hearing, the defendant’s brief to counsel in the case is delivered to the solicitor’s office by mistake.

What should the solicitor do?

A) Read the brief and then make the client aware of any of the contents which are material to the client’s matter.
B) Immediately return the brief to the defendant’s solicitors without reading it.
C) Read the brief and then make use of its contents at the final hearing.
D) Ask the client for instructions on whether to return the brief.
E) Destroy the brief without reading it.

Answer 1

CORRECT ANSWER B - Where a solicitor receives confidential information by mistake, immediately on becoming aware of the error, the solicitor must return the papers to the originating solicitor without reading them or otherwise making use of their contents (Ablitt v Mills & Reeve [1995]). Paragraph 6.4 (d) provides for an express exception to the duty to disclose information material to a client’s matter when such information is mistakenly disclosed via a privileged document.

Question 2

A solicitor drew up a will for a client. The terms of the will appointed the client’s widow as executor and left the entire estate to the client’s son. The client died last week. The client’s son contacts the solicitor and explains that he is in debt and that he urgently needs proof that he will soon receive an inheritance to show to his main creditor otherwise the creditor will start bankruptcy proceedings against him. The son requests a copy of the will.

Which of the following best explains how the solicitor should respond to the request?

A) Immediately email a copy of the will to the son because this is in the client’s best interests.
B) Immediately email a copy of the will to the son because the solicitor’s duty of confidentiality ceased on the client’s death.
C) Offer to immediately write a letter to the creditor confirming that the entire estate will pass to the son because the duty of confidentiality only arises in respect of a copy of the will itself.
D) Ask the widow for consent to release a copy of the will because the duty of confidentiality has passed to the widow.
E) Immediately email a copy of the will to the son because the need to avoid bankruptcy proceedings is an example of the disclosure of confidential information being required by law.

Answer 2

CORRECT ANSWER D - The duty of confidentiality in Paragraph 6.3 extends to current and former clients and survives death of a client. On death the duty of confidentiality passes to the personal representatives. Accordingly, the solicitor cannot provide a copy of the will in the absence of consent from the widow as executor, and options A and B are therefore wrong. (Once the Will is proved it will become a public document but in the interim the solicitor must maintain confidentiality.) The content of the will, not just a copy of it, is confidential (with the result that option C is wrong). Option E is wrong – there is no legal requirement on the facts necessitating disclosure of confidential information.

Question 3

A solicitor is instructed by a new client in the purchase of a house. One of the solicitor’s former clients sold the house to its current owner 12 months ago at a much reduced price because the house had been flooded twice in the previous three years. The new client does not know that the house is at risk of flooding.

Which of the following best describes the position with regard to the solicitor’s duty of disclosure?

A) The solicitor can only disclose the risk of flooding to the new client with the former client’s consent.
B) The solicitor must disclose the risk of flooding to the new client because the duty of disclosure takes precedence over the duty of confidentiality.
C) The solicitor has no duty to disclose the risk of flooding to the new client because the information is not material to the retainer.
D) The solicitor can disclose the risk of flooding to the new client because the solicitor owes no duty of confidentiality to the former client following termination of the retainer.
E) The solicitor must disclose the risk of flooding to the new client because this is in the new client’s best interests.

Answer 3

CORRECT ANSWER A - . The solicitor owes a duty of confidentiality to the former client; option D therefore is wrong. Option E is wrong as the duty of confidentiality can only be overridden with the former client’s consent (note that disclosure is not required or permitted by law on these facts). The duty of disclosure does not take precedence; option B is wrong. Option C is wrong as the risk of flooding will have an effect on price and insurability which will affect whether the new client wants to buy the property and so the information is material to the retainer.

Question 4

A solicitor is asked to act in a boundary dispute. The prospective client owns a piece of land adjacent to a company’s warehouse premises. The company has recently erected
a fence which encroaches onto the land. The solicitor tells the prospective client that
the solicitor is on the company’s board of directors. However, the solicitor reassures the prospective client that the solicitor does not act for the company and that the solicitor will keep the prospective client’s information confidential.

Is the solicitor able to act for the prospective client?

A) Yes, because the prospective client is aware of the solicitor’s directorship.
B) Yes, because effective safeguards are in place to protect the prospective client’s confidential information.
C) Yes, because there is no connection between the directorship and the solicitor’s professional work.
D) No, because there is an own interest conflict.
E) No, because there is a conflict of interest between the prospective client and the company.

Answer 4

CORRECT ANSWER D - This is an own interest conflict and therefore the solicitor cannot act in any circumstances (Paragraph 6.1). There are no exceptions contained in Paragraph 6.1. The company is not a client and so there can be no conflict of interest.

Question 5

A father is selling one of his many properties to his daughter at a substantial undervalue to help her to get a start on the property ladder. They both ask the same solicitor to carry out the conveyancing work for them.

Which of the following best explains who the solicitor can act for?

A) The solicitor cannot act for either as there is a conflict of interest between father and daughter.
B) The solicitor cannot act for either as there is an own interest conflict.
C) The solicitor can act for both as they are ‘competing for the same objective’.
D) The solicitor can act for both as the risk of a conflict of interest is not significant.
E) The solicitor cannot act for the father as selling the property at a substantial undervalue is not in his best interests.

Answer 5

CORRECT ANSWER D - Paragraph 6.2 provides that you must not act if there is a client conflict or significant risk of a client conflict. Usually, there will be a client conflict in acting for both seller and buyer in a residential property transaction. However, this will not always be the case. On the facts, this is a case where a conflict is unlikely to arise (option A therefore is not the best answer). The solicitor is not personally involved so there is no own interest conflict (option B
is wrong). ‘Competing for the same objective’ is not involved – they are not in competition to acquire the property (option C is therefore not relevant). Even if a conflict of interest arose it would not prevent the solicitor acting for both parties – the solicitor could act for one. Option E is wrong, as selling the property, even at an undervalue, would achieve the father’s objective.

Question 6

A solicitor receives instructions to act for the claimant in a litigation matter. The solicitor’s colleague in the firm’s litigation department, already acts for the defendant in the same matter.

Can the solicitor act for the claimant?

A) Yes, because the parties have a ‘substantially common interest’ in the matter.
B) Yes, because the parties are ‘competing for the same objective’.
C) Yes, because there is no conflict of interest where the parties are represented by different solicitors within the same firm.
D) No, because there is a conflict of interest.
E) No, because there is an own interest conflict.

Answer 6

CORRECT ANSWER D - The clients here have opposite interests as they are on different sides
in the dispute. This gives rise to a conflict of interest. Neither exception in Paragraph 6.2 can apply to opponents in litigation, accordingly, options A and B are wrong. Paragraph 6.2 is replicated in the Code for Firms and so applies to the firm as a whole and not just to individual solicitors or employees, meaning that option C is wrong. Option E is wrong as the solicitor has no personal involvement and so there is no own interest conflict.

Question 7

A solicitor works for an unincorporated law firm. The solicitor is acting for the buyer in a protracted residential conveyancing matter. The solicitor receives a telephone call from the seller (who is unrepresented). The seller is becoming increasingly frustrated at the delay and threatens to pull out of the deal. To prevent this, the solicitor says to the seller, ‘My firm will pay the deposit of £20,000 to you by 10 am tomorrow.’

Which of the following statements best explains who is liable to pay the £20,000?

A) Neither the solicitor nor the firm are liable because the solicitor did not use the word ‘undertake’ when speaking to the seller.
B) The firm is liable, but not the solicitor, because this was an undertaking expressly made on the firm’s behalf.
C) The firm is liable, but not the solicitor, because the solicitor was acting in the best interests of the client.
D) The solicitor is liable, but not the firm, because an undertaking is only binding on the person who gave it.
E) Both the solicitor and the firm are liable, because the statement made by the solicitor amounts to an undertaking binding on both the individual and the firm.

Answer 7

CORRECT ANSWER E - The statement is an undertaking even though the word ‘undertaking’ is not used (option A is therefore wrong). The SRA Glossary definition makes it clear that it
is not necessary to include the word ‘undertake’ for an oral or written statement, on which reliance is placed, to constitute an enforceable promise. The undertaking is binding both on the individual and the firm. The fact that the solicitor was motivated by trying to save the deal does not exclude the solicitor from liability.

Question 8

A solicitor is in practice as a sole practitioner. The solicitor is acting for a client in a litigation matter. At the hearing, the client loses the case and is ordered to pay £5,000 towards the opponent’s costs. Outside court the solicitor says to their opponent, ‘Don’t worry. I’ll make sure that the £5,000 will be paid within the next 14 days.’ Fourteen days have now elapsed and the client has still not provided the solicitor with any funds to pay the costs.

Who can force the solicitor to comply with the promise?

A) The Solicitors’ Regulatory Authority.
B) The Solicitors’ Disciplinary Tribunal.
C) The Legal Ombudsman.
D) The court.
E) No one.

Answer 8

CORRECT ANSWER D - The solicitor’s statement would amount to a solicitor’s undertaking and the solicitor has not complied with its terms. Whilst a failure to perform an undertaking may result in disciplinary proceedings being taken against the solicitor, only the court has the power to enforce a solicitor’s undertaking.

Question 9

A solicitor is acting for the seller in a residential conveyancing transaction. At 5 pm, the solicitor receives a telephone call from the buyer’s solicitors to say that in breach of their agreement, the seller has failed to finish some repairs to the property. Completion is due to take place the following morning and the buyer is threatening to pull out of the transaction unless the repairs are completed. To ensure that the transaction proceeds, the solicitor confirms to the buyer’s solicitor that the seller will carry out the repairs before completion.
The solicitor immediately telephones the seller. The seller’s voicemail message says the seller has been unexpectedly called away on business and cannot be contacted until tomorrow afternoon.

Which of the following best explains the solicitor’s professional conduct position?

A) The solicitor has given an undertaking which is binding upon the solicitor personally.
B) The solicitor has acted dishonestly in making a promise which could not be met.
C) There are no professional conduct issues because the promise was that it would be the client, rather than the solicitor, who would carry out the repairs.
D) There are no professional conduct issues because the telephone conversation was not confirmed in writing.
E) There are no professional conduct issues because the promise was too ambiguous to be construed as an undertaking.

Answer 9

CORRECT ANSWER A - Option E is wrong. There is no ambiguity in the solicitor’s statement (and in any event any ambiguity is likely to be resolved in favour of the recipient). It would be construed as an undertaking.
Option D is wrong. The definition of an undertaking makes it clear that it does not matter that the undertaking was given orally.
Option C is wrong. An undertaking ‘on behalf’ of a client is binding on the solicitor personally.
The solicitor may have been foolish in giving the undertaking without speaking to the client first, but their behaviour would not be considered dishonest. Option B is therefore wrong.

Question 10

A solicitor is acting for a client on a plea of guilty to a charge of assault on a member of staff in a public house. At the sentencing hearing the court asks the solicitor to confirm that the client’s list of previous convictions is accurate. The client instructs the solicitor to confirm that the list is accurate despite the fact a conviction for assaulting a bartender last year has been omitted. The solicitor advises the client that this omission should be corrected, but the client does not want to do this.

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

A) Tell the client that the solicitor must cease to act because the solicitor cannot knowingly mislead the court.
B) Do as the client instructs because the solicitor’s duty to act in the best interests of the client overrides the solicitor’s duty not to mislead the court.
C) Continue to act but tell the court that the list is inaccurate because keeping quiet would be a breach of the solicitor’s duty to act in a way which upholds the proper administration of justice.
D) Correct the list and then cease to act because this accords with the solicitor’s duty to uphold the proper administration of justice.
E) Continue to act but refuse to confirm or deny the accuracy of the list because the solicitor will not mislead the court by remaining silent.

Answer 10

CORRECT ANSWER A - The solicitor cannot continue to act knowing that the list is inaccurate as this would be misleading the court (Paragraph 1.4). However, the solicitor cannot disclose confidential information without the client’s consent (Paragraph 6.3). Hence, the solicitor would have to cease to act, without correcting the list.

Question 11

A solicitor is acting for the defendant in a criminal case. The solicitor interviews a potential witness. During the course of the interview, it transpires that the witness’ evidence works against the defendant’s case.

Which of the following best describes how the solicitor’s duties apply in this situation?

A) The solicitor’s duty to act in the client’s best interests requires that the solicitor try to persuade the witness to change their evidence.
B) The solicitor is not obliged to call the witness, but the solicitor must be careful to adhere to the solicitor’s duty not to mislead the court.
C) The solicitor’s duty to uphold the administration of justice requires the solicitor to call the witness regardless of the evidence the witness will give.
D) The solicitor is under a duty to draw the court’s attention to the witness’ evidence because it is likely to have a material effect on the outcome of the case.
E) The solicitor’s duty to act with integrity requires the solicitor to tell the prosecution about the witness’ evidence.

Answer 11

CORRECT ANSWER B - There is no obligation to call the witness (option C therefore is wrong), but Paragraph 1.4 requires that a solicitor does not mislead the court. Option D is wrong as there is no duty to inform the court of evidence which prejudices the solicitor’s client (cf. cases, statutes and procedural irregularities in Paragraph 2.7). Option A is wrong as trying to persuade the witness to change their evidence would breach Paragraph 2.2. There is no duty to inform the prosecution of a potential witness’ evidence and therefore option E is also wrong.

Question 12

A solicitor is acting for the claimant in a litigation matter. The defendant is unrepresented. On the journey to court for the final hearing the solicitor is reading a legal journal
and discovers that the solicitor has overlooked a case which completely destroys the client’s case.

What should the solicitor do on arrival at court?

A) Cease to act.
B) Provide the defendant with the name of the case and its citation.
C) Draw the court’s attention to the case.
D) Ask for the client’s consent to the solicitor drawing the case to the court’s attention.
E) Tell the client that the case cannot proceed because of a procedural irregularity.

Answer 12

CORRECT ANSWER C - Under Paragraph 2.7 a solicitor is under a duty to draw the court’s attention to cases which are likely to have a material effect on the case. Compliance with the duty is not dependent on the client’s consent (option D is wrong). Immediately ceasing to act would not assist the client, and would not comply with Paragraph 2.7; option A is therefore not the best answer. Option B is not the best answer, as providing details of the case would not assist an unrepresented party and may be considered to be taking unfair advantage of a third party. Option E is wrong – the solicitor must draw the court’s attention to the case. What that means for the ongoing conduct of the final hearing will ultimately be a matter for the court (unless the claimant decides to discontinue its claim).

Question 13

A solicitor attends a private party at a friend’s house. A good deal of alcohol is consumed. Tempers flare and the solicitor is caught up in a fight outside the house. The neighbours call the police. The solicitor is arrested for assault. The police decide to issue the solicitor with a caution rather than proceed with a prosecution.

Which of the following best describes how the solicitor’s duties operate in this situation?

A) The solicitor is not obliged to do anything as they have not been convicted of a criminal offence.
B) The solicitor will meet all their duties by informing their manager about the caution.
C) The solicitor is not obliged to do anything as the SRA will not consider this to be a serious matter.
D) The solicitor is under a duty to notify the SRA about the caution.
E) The solicitor is not obliged to do anything as the incident occurred outside the solicitor’s practice.

Answer 13

CORRECT ANSWER D - Paragraph 7.6 requires the solicitor to notify the SRA if they are subject to a criminal caution – a conviction is not required (option A is wrong). The requirement to notify the SRA in these circumstances is a strict one; the seriousness or otherwise of the matter is not relevant (option C is wrong). The duty applies irrespective of whether the offence occurs outside practice (option E is wrong). The solicitor could satisfy their duty by notifying the firm’s compliance officers, not the solicitor’s manager (which means that option B is wrong).

Question 14

A solicitor is acting for a defendant in a personal injury matter. The case is settled on the basis that the defendant will pay damages of £10,000. The solicitor undertakes that the £10,000 will be paid within seven days. The firm’s policy is that when an undertaking is given, a written note must be placed on the client’s file. The solicitor puts a written note on the file and then goes on two weeks’ holiday. No one from the firm looks at the file in the solicitor’s absence and consequently the £10,000 is not paid on the due date.

Which of the following best describes who has breached the SRA Codes of Conduct?

A) As the person who gave the undertaking, the solicitor alone has breached the Codes of Conduct.
B) The firm’s managers bear ultimate responsibility and so they alone have breached the Codes of Conduct.
C) The firm’s COLP bears ultimate responsibility and so they alone have breached the Codes of Conduct.
D) The solicitor is not in breach of the Codes of Conduct because they have complied with the firm’s policy.
E) The solicitor, the firm and the COLP are all in breach of the Codes of Conduct.

Answer 14

CORRECT ANSWER E - The solicitor is in breach of their duty to comply with the undertaking. The firm’s policy is clearly inadequate. Whilst the managers bear ultimate responsibility for the firm’s compliance with the Codes, such an inadequate policy places the COLP in breach of their obligations under Paragraph 9.1 of the SRA Code of Conduct for Firms.

Question 15

One evening a solicitor goes to a restaurant for a meal with various colleagues from the solicitor’s firm. At the end of the meal, a colleague says that they have left their wallet at home, but the colleague is still able to pay their £100 contribution to the bill in cash. The following day the colleague tells the solicitor that a client had given the colleague £500 in cash as costs on account for the work that the firm would be doing on the client’s case. As it was too late to give the money to the finance department, the colleague had kept the cash with them on their evening out for safekeeping. The solicitor queries the colleague using the cash, but the colleague insists that they were only borrowing the money.

What should the solicitor do?

A) The solicitor is not obliged to do anything as the colleague was only borrowing the money.
B) Report the matter to the SRA.
C) The solicitor is not obliged to do anything because £100 is only a small amount of money.
D) Tell the colleague to repay the money immediately.
E) Report the matter to the firm’s compliance officers.

Answer 15

CORRECT ANSWER E - This is a misuse of client money and as such is likely to be viewed as a serious breach of the regulatory requirements, irrespective of the amount involved or the colleague’s intent. This is therefore a matter which the solicitor must report under Paragraph 7.7. The solicitor could report the matter to the SRA direct, however, the solicitor will discharge their duty if they report the matter to the compliance officers (Paragraph 7.12). This would
be a better option as it would enable the compliance officers to review all the circumstances before, if necessary, formally involving the SRA.

Question 16

TRUE OR FALSE
Where you are acting for a client on a matter, you must always make that client aware of all information material to the matter of which you have personal knowledge.

Answer 16

FALSE - There are exceptions to the duty to disclose. These are set out at (a) to (d) of para 6.4 of the Code of Conduct.

Question 17

You have received instructions to act for Meghan Harrison in connection with a litigation matter against Britannia Homes Ltd. Chloe, another solicitor in your firm’s litigation department, already acts for Britannia Homes Ltd in the same matter.

Which one of the following statements is correct?

A) You can accept the instructions from Meghan Harrison as the parties have a substantially common interest.
B) You can accept the instructions from Meghan Harrison provided both parties give informed written consent to you acting.
C) You firm cannot act for both Meghan Harrison and Britannia Homes Ltd in this matter.
D) You can accept the instructions from Meghan Harrison provided you and Chloe have different supervisors.
E) You can accept the instructions from Meghan Harrison provided you are satisfied that it is reasonable for the firm to act for both parties.

Answer 17

CORRECT ANSWER C - You cannot act for both parties. Para 6.2 of the Code of Conduct states that you must not act in relation to a matter or a particular aspect of it if there is a conflict of interest (as defined in the SRA Glossary), unless either of the exceptions (found at paras 6.2(a) and (b) of the Code of Conduct) applies. Neither exception applies here (and so A is wrong) because the parties are on opposite sides of a litigation matter and there is a clear conflict of interest: they do not have a ‘substantially common interest’, nor are they ‘competing for the same objective’ (SRA Glossary). It does not make a difference whether the parties are represented in the firm by different lawyers with different supervisors and so D is wrong. Whilst ensuring that the parties give informed consent in writing and being satisfied that it is reasonable to act for both will be relevant if acting under either of the exceptions in para 6.2, neither exception applies here and so B and E are wrong.

Question 18

You have received some instructions from Port Components Ltd (‘Ports’) who want to sue Gentrix plc for breach of a contract to supply air conditioning units.

Gentrix plc has recently instructed your firm’s property department in relation to ongoing lease negotiations for a new manufacturing site. These are the first and only instructions that your firm has received from Gentrix plc.

Which one of the following statements is correct?

A) Para 6.2 of the Code of Conduct prevents you from acting for Ports against Gentrix plc, as there is a conflict of interest between them.
B) Although there is a conflict of interest between Ports and Gentrix plc, you can still act for Ports under para 6.2(b) of the Code of Conduct.
C) Although there is a conflict of interest between Ports and Gentrix plc, you can still act for Ports under para 6.2(a) of the Code of Conduct.
D) Para 6.2 of the Code of Conduct does not prevent you from acting for Ports against Gentrix plc, as you are not acting for Gentrix plc on the same matter or aspect of it.
E) You must obtain the informed consent of Gentrix plc before acting for Ports. If it gives consent, you can act, but otherwise you must tell Ports to go elsewhere.

Answer 18

CORRECT ANSWER D - Para 6.2 of the Code of Conduct prevents you from acting in relation to a matter or an aspect of it where there is a conflict of interest (as defined in the SRA Glossary). Here you do not act for Gentrix plc in relation to the breach of contract matter and so there is no conflict of interest on these facts between Ports and Gentrix plc. You are therefore able to act for both, acting for each in their respective separate matters. As there is no conflict of interest, A, B and C are wrong. E is wrong because informed consent is only required in the context of complying with the conditions which apply if you are acting under either of the exceptions in para 6.2(a) or (b) of the Code of Conduct.

Question 19

You have just taken over the caseload of a colleague (a solicitor) in the property department. On reviewing the files, you discover that on sale transactions, a proportion of the net proceeds of sale has not been returned to the clients as it should have been done. Upon further investigation, it transpires that the money has instead been transferred into the personal bank account of the solicitor in question. The matter is reported to the SRA.

Which of the following statements is correct?

A) Only the solicitor can be liable for professional misconduct.
B) Only the solicitor and the firm’s compliance officer can be liable for professional misconduct.
C) The firm’s managers, the compliance officer and the solicitor can all be liable for professional misconduct.
D) Only the firm’s managers and the solicitor can be liable for professional misconduct.
E) Only the compliance officer can be liable for professional misconduct.

Answer 19

CORRECT ANSWER C - The solicitor appears to have breached a number of the SRA Principles and other SRA regulatory requirements (including para 4.2 of the Code of Conduct – the duty to safeguard money entrusted to the solicitor by clients) and so can be liable for professional misconduct. The firm’s managers have ultimate responsibility for compliance with the Code of Conduct for Firms (para 8.1 of the Code of Conduct for Firms) and so could also be liable for the conduct of the solicitor. The firm’s compliance officers have responsibility under the Code of Conduct for Firms to ensure compliance by the firm, its managers and employees with the SRA’s regulatory arrangements. The unauthorised transfers of money may indicate inadequate supervision or ineffective systems in place which could result in the compliance officers being liable as well. This is most likely to be the COFA (compliance officer for finance and administration) under para 9.2 of the Code of Conduct for Firms in light of the apparent breaches of the SRA Accounts Rules. As all are potentially liable, A, B, D and E are wrong.

Question 20

You are acting for the defendant in a criminal matter. You interview a potential witness. During the course of the interview, it transpires that the witness’ evidence works against your client’s case.

Which one of the following statements is correct?

A) Your duty to the court requires you to call the witness regardless of the evidence they will give.
B) Your duty to act in the client’s best interests requires you to try to persuade the witness to change their evidence.
C) You are not obliged to call the witness, but you must be careful not to mislead the court.
D) Your duty to act in client’s best interests enables you to offer the witness money in return for them modifying their evidence.
E) You are not obliged to call the witness, but you must draw the court’s attention to the evidence because it is likely to have a material effect on the outcome of the case.

Answer 20

CORRECT ANSWER C - There is no obligation to call the witness (and so A is wrong), but para 1.4 of the Code of Conduct requires that a solicitor does not mislead, or attempt to mislead, the court. Trying to persuade the witness to change their evidence would be in breach of para 2.2 of the Code of Conduct and so B is wrong. Offering to provide a benefit to a witness dependent upon the nature of evidence would also breach para 2.3 of the Code of Conduct and so D is wrong. There is no duty to inform the court of evidence which prejudices the client and so E is wrong (contrast the duty on a solicitor in para 2.7 of the Code of Conduct to draw the court’s attention to relevant cases and statutory provisions etc. of which the solicitor is aware and which are likely to have a material effect on the outcome of proceedings).

Question 21

You are conducting a litigation matter for your client, Hassan. You have decided that it would be appropriate to instruct counsel to represent Hassan as his advocate at the forthcoming final hearing. Hassan asks you to instruct a particular counsel who is unknown to you, but who has attracted some media attention in recent months due to her involvement in a number of high profile cases.

Which one of the following statements is correct?

A) You must instruct the particular counsel requested by Hassan.
B) If you instruct the particular counsel requested by Hassan, this will have the effect of relieving you of the duties you owe as a solicitor.
C) You can only instruct the particular counsel requested by Hassan if you first arrange a conference with counsel.
D) Even if you instruct the particular counsel requested by Hassan, you will still be liable for counsel’s fees in the event that Hassan fails to pay.
E) If you instruct the particular counsel requested by Hassan, counsel’s advice must be followed, irrespective of your views.

Answer 21

CORRECT ANSWER D - A solicitor is personally responsible for paying counsel’s fees (subject to limited exceptions) and this is regardless of whether the client has provided the requisite money. See 9.4.4. of the Ethics and Professional Conduct Manual.

A is wrong because there is no compulsion for a solicitor to instruct a particular counsel. The solicitor may have to cease to act, for example, if compliance with the client’s request would amount to unlawful discrimination. B is wrong because instructing counsel does not relieve a solicitor of the duties owed to the client, particularly the duty to act in the best interests of the client (SRA Principle 7). C is wrong because whilst a conference with counsel may be appropriate and in the client’s best interests, it is not compulsory – it is for the solicitor to make a judgement on this. The solicitor must ensure that they are happy with the quality of the advice given by counsel and to ensure that there are no obvious errors or inconsistencies (and to seek clarification or a second opinion where appropriate) and so E is wrong.

Question 22

You are acting for the executors in the administration of an estate. Included in the estate is a house which you would like to buy.

Which one of the following statements is correct?

A) There is a conflict of interest, but you can buy the house and act for the executors provided it is reasonable to do so and the executors give informed consent.
B) This is an own interest conflict and you cannot buy the house and act for the executors in any circumstances.
C) This is an own interest conflict, but you may be able to buy the house and act for the executors, provided that the executors take independent legal advice on the sale of the house.
D) There is a conflict of interest, but you can buy the house provided that either the substantially common interest or the competing for the same objective exception applies and the conditions complied with.
E) There is neither a conflict of interest nor an own interest conflict.

Answer 22

CORRECT ANSWER B - There is a conflict between the solicitor and the executors - an own interest conflict, and so under para 6.1 of the Code of Conduct you cannot act in any circumstances. There are no exceptions and so C is wrong. A conflict of interest is one which arises between two or more clients (see the definition in the SRA Glossary) and so A and D are wrong. There is an own interest conflict here and so E is wrong.

Question 23

You have been approached by Ayo, Earl and Zane who are in a business partnership together. Earl has decided to retire and Ayo and Zane have agreed to buy Earl’s interest in the partnership.

Which one of the following statements is correct?

A) You cannot act for all three partners because there is a conflict of interest.
B) Although there is a conflict of interest, you can act for all three partners because they are competing for the same objective.
C) There is no conflict interest here.
D) You can act for all three partners provided they all consent to you doing so.
E) Although there is a conflict of interest, you can act for all three partners because they have a substantially common interest here.

Answer 23

CORRECT ANSWER A - There is a conflict of interest as the solicitor owes separate duties to two or more clients in relation to the same matter, so the solicitor cannot act for all three of the partners (para 6.2 of the Code of Conduct). For this reason C is wrong. They are not all ‘competing for the same objective’ (SRA Glossary) as that exception is, broadly speaking, aimed at processes that are genuine competitions between parties for an external asset or object and so B is wrong. Nor is there a ‘substantially common interest’ (SRA Glossary) as one is selling but two are buying and there will be negotiations to take place (so there is not a ‘clear common purpose’), and so E is wrong. Para 6.2 of the Code of Conduct cannot be overridden by the clients’ consent alone and so D is wrong.

Question 24

TRUE OR FALSE

A solicitor’s duty to disclose material information of which he has knowledge only applies to current clients.

Answer 24

TRUE - The wording of para 6.4 of the Code of Conduct makes it clear that the duty applies where a solicitor ‘is acting for a client on a matter’ and so applies to current clients only.

Question 25

Which one or more of the following situations would be an exception to the duty of confidentiality towards a client?

A) The client provides his consent to the disclosure.
B) The disclosure would prevent harm to a child.
C) If disclosure was ordered by the court.
D) In a genuine emergency to prevent self-harm by the client.
E) If the disclosure was pursuant to a duty contained in the Proceeds of Crime Act 2002.

Answer 25

CORRECT ANSWERS A, C, E - A, C and E would amount to exceptions under para 6.3 of the Code of Conduct i.e. ‘You keep the affairs of current and former clients confidential unless disclosure is required or permitted by law or the client consents.’ Disclosure pursuant to a statutory duty (e.g. in the Proceeds of Crime Act 2002) or pursuant to a court order are examples of where disclosure is required or permitted by law. B and D would still amount to a breach of the duty of confidentiality, but may be taken into account as mitigation by the SRA in the context of disciplinary action.

Question 26

For a number of years, a solicitor acted for a client who is a well-known rock musician. The client recently died and the solicitor is now acting for the executors, the musician’s son and daughter, in the administration of the estate.

The solicitor is contacted by a writer who is carrying out research for a biography of the musician. The writer requests a meeting with the solicitor to talk about the musician’s will. The writer assures the solicitor that there will be no problem in speaking to her (the writer) because she has permission from the musician’s wife to contact the solicitor.

Can the solicitor speak to the writer about the will?

A. Yes, because his duty of confidentiality ceased on the death of his client.

B. Yes, because, although his duty of confidentiality survives the death of his client, the surviving spouse has given the writer her consent.

C. Yes, because his duty of confidentiality automatically transfers to the surviving spouse on the death of his client and she has given her consent to the solicitor being contacted.

D. No, because his duty of confidentiality survives the death of the client and the surviving spouse has not given her express consent to the solicitor.

E. No, because his duty of confidentiality survives the death of the client and he does not have the consent from the son and daughter.

Answer 26

CORRECT ANSWER E - The duty of confidentiality in para 6.3 of the Code of Conduct extends to both current and former clients and survives the death of a client, whereupon the right to enforce or waive the duty of confidentiality passes to the client’s personal representatives (here, the son and daughter).

The duty of confidentiality does not automatically pass to the surviving spouse and so Option C is wrong. As the surviving spouse here is not a personal representative, she cannot waive the duty of confidentiality, therefore both Options B and D are wrong. The duty of confidentiality does not cease on the death of a client and so Option A is wrong.

[Note: once the will is proved it will become a public document, but in the interim the contents remain confidential.]

Question 27

A company has agreed the sale of its business to another company. It is important to both of the parties that the sale is completed on Tuesday this week and that there is the minimum of delay. The purchase will be wholly funded by a bank loan. At 8.30am on the Tuesday, before the loan money is received by them, the buyer’s solicitors are asked by the seller’s solicitor to provide an undertaking to transfer the completion money to his firm’s client’s account ‘by 12 noon today’ to enable completion to take place.

Which of the following statements represents the best practice for the buyer’s solicitors?

A. A trainee from the buyer’s solicitors and who has been working on the file types up and signs an undertaking in the terms requested and immediately forwards it to the seller’s solicitor.

B. One of the partners from the buyer’s solicitors immediately telephones the seller’s solicitor and tells him that she would “ensure that funds are paid across to your firm’s client account by 12 noon today, or as soon as possible thereafter”.

C. Having waited until the funds had been received from the bank into the firm’s client account later that morning, one of the partners from the buyer’s solicitors provides a signed undertaking to the seller’s solicitor that ‘the funds will be paid across to your firm’s bank account forthwith’.

D. Having first checked with the bank that the funds would be transferred to the firm’s client account later that morning, one of the partners from the buyer’s solicitors then provides an undertaking signed by her to the seller’s solicitor in the terms requested.

E. One of the partners from the buyer’s solicitors immediately confirms in writing that she will use her ‘reasonable endeavours’ to arrange payment of the funds to the seller’s solicitor ‘by 12 noon today’.

Answer 27

CORRECT ANSWER C - This represents the best practice because the undertaking is given by a partner, it is in writing and is only given after it is known that the firm has the funds available to transfer to the seller’s solicitor’s client account i.e. once it is clear that the terms of the undertaking are within the control of the solicitor giving the undertaking.

Option A is wrong because the undertaking is being given before the buyer’s solicitors know that the funds will have been transferred to them by the bank and so before they know that they will able to comply with the undertaking. Also, although para 1.3 of the Code of Conduct covers undertakings given by anyone held out by the firm as representing it, including a trainee, it may not be reasonable for the seller’s solicitor to rely on a promise by a trainee (and most firms have procedures dealing with who within the firm is authorised to give undertakings, usually a partner or equivalent).

Option B is wrong because, again, the undertaking is being given before the buyer’s solicitors know for certain that the funds are available, and the undertaking obliges the partner to make the payment by 12 noon or as soon as possible thereafter, whether or not the solicitors have been put into funds by the bank. Also, whilst an undertaking can be given orally, it is good practice, wherever possible, to provide or record an undertaking in writing for the avoidance of doubt as to its terms. Note that it will still amount to an undertaking even though the word ‘undertake’ or ‘undertaking’ is not used.

Option D is wrong because, although confirmation has been received from the bank that the funds would be transferred later that morning, the partner is still undertaking to do something which she may not be able to perform by the time stated (or at all) if, for example, there were to be a last minute problem or delay with the funds being transferred by the bank.

Option E is wrong because, although not as risky because it imposes a lesser obligation on the partner who gives it, a ‘reasonable endeavours’ undertaking does not give the recipient the same comfort as an absolute undertaking and so it may not be accepted (see 8.5.1 of the Ethics and Professional Conduct Manual) and so does not represent best practice here.

Question 28

A solicitor is advising a client on an employment contract in respect of a position that the client has been offered in a newly established company. The client is currently employed by an established company where he has been in a full-time position for the past 15\ years.

On the day after she has taken the instructions, the solicitor sits next to a new acquaintance at a charity auction. The new acquaintance tells the solicitor that he is concerned that he may be out of a job soon, because the company he works for has just lost two of its key customers without whom the company will be in severe financial difficulties. The new acquaintance then mentions the name of the company he works for and it turns out that this is the company the solicitor’s client is intending to join.

Is the solicitor obliged to inform the client of the reported concerns about the financial prospects of the newly established company?

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

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

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

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 28

CORRECT ANSWER D - Under para 6.4 of the Code of Conduct, where acting for a client on a matter, a solicitor must make the client aware of all information material to that matter of which the solicitor has knowledge. There are exceptions to this duty, but none relate to the knowledge having been obtained outside of practice and so Option C is wrong. The duty of confidentiality in para 6.3 of the Code of Conduct is owed to current and former clients and so does not apply to the new acquaintance and therefore Options A, B and E are irrelevant and so wrong.

Question 29

A solicitor owns a number of flats which she lets out to students. The solicitor decides to sell one of the flats to raise capital for another property investment she wishes to make. One of the solicitor’s clients offers the full asking price for the flat and the solicitor accepts the client’s offer.

The client instructs the same solicitor to act for him in the conveyancing transaction, in the full knowledge that the solicitor is the seller. The solicitor accepts the instructions and prepares all of the necessary documents. The transfer of the property is completed without any complications.

Which statement best describes the solicitor’s actions?

A. The solicitor was able to act in the transaction because she had received the written consent of the client.

B. The solicitor should not have acted because it was an own interest conflict.

C. The solicitor was able to act in the transaction because she and the client can be said to have had a substantially common interest.

D. The solicitor should not have acted in the transaction because the client was unable to give informed consent.

E. The solicitor was able to act in the transaction because it was in the client’s best interests to do so.

Answer 29

CORRECT ANSWER B - In this situation, there was an own interest conflict (as defined in the SRA Glossary) or a significant risk of such a conflict (para 6.1 of the Code of Conduct). There are no exceptions to this and so it is irrelevant as to whether the client gives consent and so Options A and D are wrong. Where there is an own interest conflict, or a significant risk of one, it cannot be in the client’s best interests to act and so Option E is wrong. The ‘substantially common interest’ exception only applies to conflicts of interest under para 6.2 of the Code of Conduct i.e. a conflict arising between two or more current clients and so Option C is wrong.