Week 22 April 2024- stopped question 5 Flashcards
A solicitor at a large firm represented a UK-based client accused of manslaughter. After thoroughly investigating the matter, the solicitor managed to clear the client. The client paid the solicitor’s substantial bill by transferring money to the solicitor’s firm from a bank account in Yemen.
As this country has been listed as a high-risk jurisdiction, the solicitor worried that the client might be laundering money and reported the matter to the firm’s nominated officer. The nominated officer investigated the matter and decided the client’s source of funds was legitimate.
For how long must the firm keep records of the nominated officer’s investigation?
The firm must keep records of the nominated officer’s investigation for five years. Firms must keep comprehensive records of suspicions and disclosures including discussions with the nominated officer regarding concerns, advice sought and received regarding concerns, and reasons why concerns did not amount to a suspicion and a disclosure was not made. Broadly, records of customer due diligence and business relationships should be kept for five years after the end of the relationship. (A), (B), (D), and (E) are incorrect because they do not describe the correct period for which the records must be kept.
A firm of solicitors is not authorised by the Financial Conduct Authority to carry on a ‘regulated activity’ as defined in the Financial Services and Markets Act 2000 (‘FSMA’) and related secondary legislation.
Which of the following activities would the firm be able to conduct in its business if no FSMA exclusion or exemption applies?
Under the general prohibition of FSMA, a firm of solicitors may not carry on regulated activity in the UK unless they are authorised or exempt from authorisation. A regulated activity is defined as an activity specified in the Regulated Activities Order relating to an investment specified in the Order, which is carried out in the course of business, and to which no exclusions apply. The specified activities and investments might be remembered with the mnemonic device ‘ADAMS F.M.DIPS’. Activities = Advising, Dealing as an agent, Arranging, Managing, and Safeguarding. The specified investments most relevant to a solicitor = Funeral plans, Mortgage contracts, Debentures, Insurance contracts, Pension schemes, and Shares in a company. The firm would be able to contract for a client to enter into a settlement in an employment dispute because, while contracting on someone’s behalf is dealing as an agent (a specified activity), a settlement agreement is not a specified investment. (A), (B), (C), and (D) each clearly involve specified activities (arranging, safeguarding, managing and advising, respectively) and specified investments (mortgage contract, debenture, shares in a company, and funeral plans, respectively.)
A man has been charged with theft and asks a solicitor to represent him in his case. The man does not have the funds to pay for the legal fees as he is in receipt of Universal Credit and has no savings. He asks the solicitor whether he will be able to get Legal Aid to pay for his defence.
Which of the following best describes the advice the solicitor should give?
ResponsesPress Enter or Space to submit the answer
The man will automatically qualify under the means test but will have to establish that it is in the interests of justice for him to receive Legal Aid. Defendants in criminal cases must satisfy both the means and the merits tests to be eligible for Legal Aid. For the means test, the client’s finances are considered, including their household income, outgoings, and savings. However, if they receive certain welfare benefits like Universal Credit, no means test is needed. Therefore, the man will automatically satisfy the means test as he in receipt of Universal Credit but he must still satisfy the merits test, which considers whether it is in the interests of justice for him to receive funding. (A) and (B) are incorrect because the man must satisfy both the means and the merits tests to be eligible for Legal Aid. As explained above, the man already satisfies the means test, but the merits will still need to be considered. (D) is incorrect because Legal Aid is available in civil and criminal cases. (E) is incorrect because Legal Aid is available for cases in the Magistrates and Crown Courts
An advisor works for a consumer helpline. The helpline business is not regulated by the Solicitors Regulation Authority nor any other Legal Services Board regulator. The advisor is asked by a caller to draft a claim form and file it at court on the client’s behalf.
Which of the following best explains whether the advisor can carry out the caller’s instructions?
Issuing proceedings and defending proceedings comprise the conduct of litigation. Conduct of litigation is a reserved legal activity so must be conducted by a person authorized by a regulator under the Legal Services Board. (A) is incorrect because the status of the claimant has no bearing on whether the advisor is conducting a regulated activity. (B) is incorrect as the relevant regulated activity is not exercising a right of audience. (C) is incorrect because, as explained above, the advisor is conducting a regulated activity regardless of whether these are only the preliminary steps in the claim. (E) is incorrect because there is no obligation on a consumer to act as a litigant in person, although they may choose to do so.
