1 Flashcards
(261 cards)
1
Q
What/who is FCA responsible for regulating?
A
Regulate conduct of all firms, inc dual-regulated firms and the prudent regulation of those not regulated by Prudent Regulation Authority (i.e. FCA-authorised or FCA-only firms)
And for consumer credit / second charge mortgages
2
Q
3 objectives of FCA
A
- Protect consumers
- Enhance integrity UK financial system
- Promote effective market competition in interests of consumers
3
Q
What and who is PRA responsible for?
A
Authorising, prudent regulation and general supervision of firms which manage significant financial risks
inc. banks, building societies, insurers, credit unions, certain investment firms
aka PRA-authorised or dual-regulated firms
4
Q
What activities are included under PRA-regulated activities and effect?
A
Accepting deposits, insurers and investments as principal (using own assets to buy)
Any company carrying out becomes PRA-authorised
5
Q
Do firms need to obtain authority for authority from FCA for engaging in regulated financial activity (e.g. corporate)?
A
Not if supervised by a DPB
SRA is a DPB
And can meet certain conditions
6
Q
Two main restrictions under FSMA 2000 on solicitors carrying out financial services?
A
- Can’t carry out regulated activity unless authorised or exempt (General prohibition)
- Making a financial promotion
7
Q
Implications of breaching FSMA restrictions (solicitors)
A
- criminal offence up to 2 years imprisonment
- unlimited fine
- relevant agreement unenforceable
- breach contract (the contract between sol and client)
8
Q
Test to determine a regulated activity? (i.e. by FCA)
A
- Are you in business?
- Specified investment?
(or does the specified activity relate to info about a persons financial standing or administering a benchmark?) - Is there a specified activity?
- Is there an exclusion?
(active re-call to expand and see OneNote )
9
Q
What constitutes ‘information about a person’s financial standing or administering a benchmark’ for purpose of regulated activity?
A
Financial standing:
Providing or advising on credit reference and credit information services
Benchmark:
Used in markets to set prices/measure performance/value amount payable under contracts
10
Q
What counts as specified investment activity??
A
Dealing as agent
○ (buying/selling/subscribing/underwriting clients investments for client and commits them to it)
○ Eg selling shares on divorce order
- Arranging
○ Involved in contract between client and investment company - re investments
○ Eg contract between client and life company or client and stockbroker
- Managing
○ About exercising discretion
○ Mainly if trustee or PR
** - Safeguarding**
○ Safeguarding/administering investments
○ Mainly trustee PR
** - Advising**
○ Specific advice
○ Eg in buying in tesco
But not regulated if give generic advice (eg respective merits of diff types of mortgage)
AAMSA
Ah Alice May Soon Appear
11
Q
What exclusions may apply to authorise solicitor in a transaction for an otherwise specified regulated activity?
A
- Introducing
- Using an authorised ATP
- Acting for an execution-only client
- Acting as a trustee or PR
- Professional/necessary
- Body corporate takeover
(see OneNote)
12
Q
What exclusions apply to allow solicitor to deal as agent?
A
- ATP (authorised TP)
- Execution-only
- Professional/necessary
- Corporate body takeover
13
Q
What exclusions allow solicitors to arrange?
(i.e. involved in contract between client and the other person in an investment)
A
- Introducing
- ATP
- Execution-only
- Professional/necessary
- Acting as trustee/PR
- Takeover
14
Q
What exclusions allow solicitors to advise?
(on merits of specific thing)
A
- Professional/necessary
- Acting as trustee/PR
- Takeover
15
Q
What exemption(s) apply re managing as a specified activity?
(discretionary active participation)
A
Acting as trustee/PR
16
Q
What exemptions apply re safeguarding as specified activity?
A
Prof/necessary
Acting trustee/PR
17
Q
What are the requirements for body corporate exclusion?
A
Acquiring/disposing shares in company and:
- Shares 50% or more of the voting shares; AND
- between parties each of whom a body corp, partnership, single individual or group of connected individuals
(if haven’t reached 50%, can add together those acquiring to those already owned by group of connected individuals - directors/managers and their families)
18
Q
When will professional/necessary exclusion apply? Examples.
A
Can’t provide other services properly unless perform that regulated activity
e.g. IHT / acquisition of company
19
Q
when can rely on s 327 exclusion?
A
All below:
- No pecuniary / other other than from client unless give to client
(same as code of conduct) - Incidental to services
- specific to that client; and
(complementary professional service - incidental or subordinate - would have to be the client, not say a beneficiary)
- general
i.e. not signif part of firm’s services / advertised specially / 50% or more of income - comply SRA COB/Scope rules
- not prohibited by FSMA - eg disposing of rights under pension scheme / creating or underwriting insurance
- notify if intend undertake insurance distribution activities - not prohibited by Treasury order or FCA direction
- not already FCA regulated
(see OneNote)
20
Q
What are the two tests for whether a financial regulated service is incidental to its SRA-regulated services?
A
- Specific
- Arise out of or be complementary to other professional service to same person - General
- can’t be major part of activities, consider if:
half income
high percentage of offered activities
held out as separate activities
impression firm gives of how those activities provided
(e.g. if advertised as incidental or not)
21
Q
Under SRA Scope Rules, examples of what activities are permitted by SRA?
(part of s327 exemption)
A
- Can’t carry out activity specified in** Treasury order**
e.g. recommended to dispose of rights under pension scheme or creating insurance contract - If wish undertake insurance distribution, notify SRA, register with Financial Services Register and appoint insurance distribution officer
22
Q
What is the purpose of COB rules?
i.e. SRA Financial Services (Conduct of Business) Rules
A
Regulate way firm undertakes financial services under professional exemption
(i.e. where regulated by SRA instead of FCA and carrying out exempt regulated activity)
23
Q
What are the main COB rules?
A
way can carry out under s 327 exemption
○ Status disclosure (ie that not authorised by SRA) ○ Best execution (ie interests) - don’t carry out if not in best interests ○ Transactions (keep records) ○ Commissions (keep records) ○ Execution-only and investment is a retail investment product, letter confirming client not relying ○ Insurance distribution activitires § Clear, fair, not misleading Nature renumeration re contract provided before conclusion
24
Q
Under COB rules, what must firm do if acting for execution-only client?
A
Execution-only client and investment is a retail investment product
(e.g. life policies/stakeholders/pension schemes/unit trusts)
Letter to client confirming not relying on solicitor’s advice
(eg retail investment product is insurance contract - execution only would not apply so would have to rely on exemption - and therefore comply COB rules)
25
When do COB rules apply?
Carrying out an exempt regulated activity
(i.e. s 327 exemption)
(not where they are EXCLUDED - e.g. bod corporate)
26
What section exempts professional firms from general prohibition?
s327
27
Under COB rules, what info must be provided re insurance distribution activities?
Clear, not misleading, fair way
Info re nature of remuneration received re the contract of insurance
28
What are insurance distribution activities?
**preparing or administering insurance contracts **
Activities of advising on, proposing or carrying out other work preparatory to the conclusion of contracts of insurance, or of concluding such contracts, or assisting in administering and performance of such contracts
(btw insurance contract is like between me and travel insurers about where said stuff like can't claim not public healthcare)
29
What's a body corporate?
another name for a company
30
What is considered 'insurance distribution' for purposes of regulated activity?
Advising on, proposing or carrying out work
relating to preparing, concluding or assisting in
administering or performing contracts of insurance
**(baso just working on insurance contracts - and insurance contracts are anything involving insurance)**
the exclusions dont apply, so ***have to rely on s 327*** or seek fca authorisation
31
Do EXCLUSIONS apply to insurance work?
No, even if just introduce to insurer or insurance claim against insurers
So need to rely on s327 exemption (or seek FCA authorisation)
32
What is the execution-only exclusion?
Can act as agent (on behalf) or arrange (middle man) as long as not asked to or decline to advise on merits of entering transaction
But not apply for insurance or if get commission from a TP which don't give to client
33
What's a financial promotion?
Invite or induce to engage in INVESTMENT ACTIVITY
34
When can a solicitor offer financial promotion?
Contents approved by authorised person
35
What is the test for if something is a financial promotion?
(and therefore not FCA authorised)
1. Made in business
2. Making invite or inducement
3. Is there a specified investment?
4. Is there a specified investment activity?
NB no exclusion test applies
36
What are 2 types of financial promotions for SRA firms?
1. Real-time promotions
- in course of personal visit, phone call etc
2. Non real-time promotions
- letters, emails etc
- includes comms with other side
(so they could also be construed as financial promotion)
37
What main exemptions apply re financial promotions?
one-off promotions
introducer
trustees, PRs
body corporate takeover
38
When can a solicitor rely on real-time promotions exemption to make a financial promotion?
1. Before the communication, client instructed solicitor to act for them;
2. Carrying out exempt activity (s 327) OR necessary exclusion applies; AND
3. For purpose of or incidental to the services supplying to client
(so if excluded other than cos necessary, can't financially promote)
39
When can financial promotion be made non-real time?
(letters etc)
ONLY if carries out exempt regulated activities and promotion contains certain statements
40
When can a one-off promotion be made?
(exclusion which allows financial promotions to be made)
one-off non-real-time or **REAL-TIME SOLICITED** if PERSONAL to client
(think real-estate solicitor)
- remember for non-real time: certain statement
- real-time: must be necessary and incidental
OR
One-off unsolicited **real-time** - believe on reas grounds:
a) client **understands** risks; and
b) would **expect** solicitor to be contacting at that time about that activity
41
Can you introduce a client to an ATP for **specified investment activities**?
No - can do so if
1. Real-time communication:
1. Not connected (e.g. close relative);
2. Not receive from anyone other than client for it; and
3. Client not requested (or declined to give) advice on merits of investment
42
What is not a specified investment? Impact of this if give advice on?
Interest in land
(e.g. residential property)
Most National Savings products
(inc all National Savings Certificates)
Disciplinary proceedings as breach SRA C of C (but not criminal offence etc)
43
What counts as specified investment?
* shares
(unless in the share capital of an open-ended investment company or building society incorporated in the UK);
* debentures, loan stock and bonds;
* gilts
* unit trusts and OEICs;
* contract of insurance;
* regulated mortgages (most resi);
* home reversion/home purchase plans (where can sell part/whole home to raise money then become tenant);
* deposits.
* credit arrangements
(except some between solicitor and client)
44
What is a unit trust?
pools investors' money into a single fund, which is managed by a fund manager
(nb OEICs are v similar)
45
What is an exempt agreement between solicitor and client under FSMA 2000 in terms of solicitor/client fee arrangement?
What type of regulated activity is it?
Where solicitor allows client to pay their fees in instalments if
1. Max 12 repayments;
2. Over max 12 months; and
3. No interest or other charges
Consumer credit activity.
46
What are the six types of reserved legal services?
(those seen as riskiest)
1. Exercise of right to audience
2. Conduct of litigation
3. Reserved instrument activities
4. Preparing probate papers
(ie docs needed to obtain or oppose grant)
5. Notarial activities
(certify docs)
6. Admin of oaths
(eg affidavit)
47
What is dealing as agent exclusion and when does it apply?
Buying, selling, subscribing for or underwriting investments on behalf of client
e.g. selling client's shares after divorce
48
Body corporate takeover - which specified activities does it apply to?
3 As
Arranging, advising, agent
49
What are national savings certificates and are they specified form investment?
Government issues
Safe form investment
Not a specified investment bcos not risky
So CAN advise on
50
What is consumer credit activity and when can you act for client in related matters?
e.g. debt management/debt collection under consumer credit agreement or hire agreement/debt advice/debt administration
Litigation proceedings arising out of consumer credit / hire agreement not count so can do that
otherwise only if authorised by FCA or s 327
51
All exclusions to allow solicitors to make financial promotions?
None !
But can use exemptions:
- Trustees and PRs
- Body corporate
- One-off promotions
(unsolicited NRT/solicited RT - personal, and unsolicited RT in certain situs)
- Introducers
52
Explain when trustee/PR exemption applies
Only if acting AS trustee or PR not FOR
- or if one solicitor in firm acting as, and activity by another
Applies to arranging, managing, safeguarding and advising fellow trustees/beneficiaries; AND
Lending money on or administering regulated mortgage contract
53
Limitations to relying on trustee/PR exclusion
Being remunerated extra
Only available for managing and safeguarding if not hold selves out as providing service which comprises of that
And doesn't apply for insurance obvs
54
What is money laundering?
Process whereby proceeds of crime are changed so that they appear to come from a legitimate source.
55
What three distinct stages are there in money laundering?
1. Placement (proceeds of criminal activity introduced into financial system)
2. Layering (proceeds distances from the criminal activity by passing through other parties or transactions)
3. Integration (integrated back into the financial system and return to criminal's possession)
56
Key risk areas for money laundering for solicitors
1. Company work and trust work
- money can be hidden within their structures / layers of ownership
- want solicitors involved in management so looks respectable
2. Use of client account
- swap illicit money for clean
e.g. says going away and transfers just in case it completes, later changes mind so not proceed purchase, says transfer to a diff account
3. Real estate
- money has to pass through client account to proceed
- criminal can then sell asset to produce legitimate proceeds
- seller sometimes complicit
(e.g. no mortgage, transfers 500k, seller randomly reduces to 400k, instructs surplus paid to someone else)
4. Sham litigation
(e.g. judgment in default against overseas company, overseas company pays firm, who pays client)
57
UK money laundering legislation also covers
terrorist financing
58
money laundering regulations apply to
all persons acting in course of business carried out in UK
includes independent legal professionals
- obvs most solicitors firms but also trust or company service providers, tax advisers and insolvency practitioners
59
Effect of failure to comply money laundering regulations?
Criminal offence
60
Who supervises anti-money laundering regulations for solicitors?
(inc monitoring compliance / approval etc)
SRA
61
What must firms and sole practitioners do to be approved under money laundering regulations?
Beneficial owners, officers or managers of firm and sole practitioners
Must apply to SRA for approval under the Regulations
SRA must grant unless applicant convicted of a 'relevant offence' (e.g. under previous money laundering legislation, terrorism or any offence involving dishonesty/deception)
62
Effect for acting without approval under money laundering obligations?
Criminal offence which may result in imprisonment, fine or both
63
As per professional conduct requirements for law firms, what must ensure re money laundering?
(aside from SRA approval etc - just arising from code of conduct)
Need structures, arrangements etc to ensure compliance
Must identify, monitor and manage material risks
Take action to prevent money laundering
64
What should a firm's risk assessment for money laundering entail?
Implications of it?
Firm-wide risk assessment
Considering services offered, how delivered, type of clients and industries
Must address risks with trusts and company, real estate and client account use
Take into account SRA's risk assessment (broad / is for whole of profession)
SRA may ask to see the firm's risk assessment and take action if inadequate
Must maintain record of steps taken as a result of risk assessment
65
What policies must firm establish and maintain re money laundering?
Establish and maintain written anti-money laundering policies, controls and procedures
Proportionate to size / nature of firm
Approved by senior management
Related to risks identified in risk assessment
66
Under money laundering obligations, what roles must firms appoint?
1. money laundering compliance officer (MLCO)
- only need if appropriate considering size/nature firm
- SRA point of contact
2. nominated officer (MLRO)
- receive internal reports re suspected money laundering and consider whether to report to NCA
(can have same individual doing both)
67
Aside from appointing MLRO and MCLO, what internal controls must firms implement?
how many yrs able to answer to sra for?
1. Screen employees whose work is relevant complying with Regulations or who help identify/prevent/detect money laundering prior to and during employment
2. establish independent audit function to examine firm's policies re regulations
3. ensure able to respond to law enforcement enquiries re business relationships with any person over last 5 years
68
wbhen must do customer due diligence requirements under money laundering regs?
verify client's ID if:
- agree to form business relationship
- transferring over 1k euros not as part of business relationship
- carrying out occasional transaction over 14k euros
- suspects money laundering / terrorist financing
- doubts docs supplied re their identity
69
When must ID verification take place if required under money laundering regs?
General rule = first contact
So before business reli established or carrying out transaction.
However can do DURING business reli if:
- little risk of money laundering;
- not necessary interrupt normal course business; and
- verified as soon as practicable
70
If solicitor cannot complete client due diligence on time, they must:
MUST NOT:
- carry out transaction with or for client through a bank account
(eg buying house)
- establish a business relationship or carry out transaction other than via a bank account
MUST:
- consider NCA disclosure
- terminate any existing business relationship
71
What are the diff types of client due diligence?
1. Standard DD
2. Simplified DD
3. Enhanced DD
72
How to verify ID under standard DD?
(i.e. for most clients)
Documents or info obtained from a reliable source, independent of person being verified
(e.g. driving licence - even if copy provided by individual it is issued by DVLA)
(not letter from a friend)
Take reasonable measures to understand ownership / structure of companies and trusts
73
Good practice on proving identity?
A) gov't doc which verifies name and address or DoB; or
B) gov't doc which verifies name and a separate doc verifying name and address or DoB
Ideally sight of originals. Copies if justifiable on risks.
74
Non-limited liability partnerships (inc general partnerships) - standard DD - what is required?
Info on the individuals
If well-established/reputable - enough just to get name, registered or trading address and nature of business
75
Companies - standard DD ID requirements?
Standard DD:
- name
- company number or other registration
- registered address and principal place of business (if diff)
unless public - reas measures to check which law subject to/incorp docs/names of directors etc
- proof of registration
(companies required to provide if requested)
good practice = if person instructed is authorised to
Unless simplified DD applies:
- consider identify beneficial owners
76
When must solicitor consider beneficial owners under client DD?
Beneficial owner is not the client
Simplified DD not apply
77
Who will be a beneficial owner in LLP or private company for purposes money laundering regs?
private companies and LLPs:
- individual exercises ultimate control over management of company;
- owns or controls over 25% shares or voting rights
(via shares or other means)
- controls body corporate
78
Do you need to do further client DD if the beneficial owner is a parent company?
Not compulsory - risk-based decision
Often seek identity of beneficial owners of parent company
79
Beneficial ownership in general partnership
- entitled to or controls over 25% share in capital or profits or voting rights
- otherwise control over management (eg authority to use funds outside of normal management)
80
Who is beneficial owner of trust for money launder regulations?
EACH of the following
- settlor
- trustees
- beneficiaries
- if beneficiaries not determined, class of persons who have main interest
- anyone with power over trust
81
Whose ID do you get for a trust client DD?
Identify beneficiual owner if beneficial owner is not the client
This means settlor, trustees, beneficiaries, potential beneficiaries and anyone with control over the trust (eg to add/remove beneficiaries)
- if company, do usual company diligence (ie name/address/registered office - unless regulated market, constitution/governing docs/names board directors) and proof of registration
NB: if simplified DD, no need consider beneficial owners
82
When is simplified DD permitted?
Firm determined through individual risk assessment that business reli or transaction low risk
Considering facts, inc:
- if listed on a regulated market
- where it is listed
- where client does business
(e.g. if UK stock exchange low risk)
NOT about type of work involved
83
What must solicitor do if considers simplified DD applies and what does simplified DD entail?
Must - obtain evidence that client/transaction eligible for simplified DD
Doesn't necessarily need to obtain info on beneficial owners
Amount of info need depends on client
e.g. PLC - just obtain confirmation of company's listing on stock exchange
84
When is enhanced due diligence required?
Something about arrangement gives high risk of money laundering
Circumstances include:
- situ identified in firm or SRA/Law Soc risk assessment
- high-risk third country
- false or stolen ID
- complex or unusually large
- unusual pattern/purpose
- PEP or known associate
- other (e.g. not met face to face or payments from unknown TPs)
**
85
What must you do if enhanced client DD applies?
Take reasonable measures to consider
- background and purpose transaction
- whether more ID or info on ownership required
Monitor throughout retainer
86
What is a PEP and related people?
- head of state/ministers
- MPs
- Judges of higher courts
- boards of banks / members court of auditors
- ambassadors/high ranking army officers
- members of admin/management/supervisory bodies of State-owned enterprises
And spouse, children, parents and children's spouses
And their close business relationships
87
Obligations if dealing with PEPs or their associates?
Approval of senior management to act
Taking adequate measures to establish source of wealth and funds used
Conduct ongoing enhanced monitoring
88
Are solicitors obliged to undertake ongoing monitoring of clients?
Yes - must ensure transactions consistent with knowledge of client
89
Training requirements under money laundering obligations?
Provide and maintain record of training to employees
Should be made aware of law and related data protection requirements
Should be trained on how to identify potential ML
Doesn't specify how training take place
Suggest staff manual
No training may give defence to employee
90
Firm's record keeping obligations under money laundering regs?
Copy of docs and info obtained to satisfy DD and any relevant supporting records re transaction
Keep for at least 5 years after the relationship or occasional transaction ends
91
Applicable offence to law firms under Criminal Finances Act 2017 and when would apply?
Corporate offence of failure to prevent criminal facilitation of tax evasion
(e.g. fraudulent evasion VAT/income tax/cheating public revenue)
Liable for employees and other associated persons
Strict liability - no knowledge or intention of managers etc required
92
Defence available to firms' liability under Criminal Finances Act 2017 (tax evasion)?
Had reasonable prevention procedures in place or was reasonable not to have them in place
Need firm-wide risk assessment, training, ongoing monitoring
Already have procedures in place for money laundering - make sure they also comply CFA 2017
e.g. due diligence policy considers risk tax evasion by firm's own partners/employees/other associated persons e.g. barristers used
93
Impact is the UK financial sanctions regime on law firms?
Serious restrictions on dealing with 'designated persons' on the sanctions list (sanctioned by UK, EU or UN)
Applies to ALL law firms
Must inform Office of Financial Sanctions if reasonably suspect someone to be a designated person
If wish to act for them, must obtain licence for a fee
94
Does discussing someone's sanctioned status amount to a tipping off offence?
No - it's public info
95
Under economic crime act 2022, what penalties against law firms re UK financial sanctions regime?
EVEN IF no knowledge or reasonable cause to suspect transaction to which they are a party is in breach of sanctions regime
Can still be liable for fines
96
Do you need to conduct due diligence on client if you have personal knowledge of them?
Yes you do
97
What are the key offences under Proceeds of Crime Act 2002 applicable to solicitors?
*star bcos imp*
- Entering or becoming concerned in an **arrangement** which know or suspect facilitates proceeds of crime
- Acquiring, using or possessing **proceeds** of crime
- **Concealing**, converting or transferring proceeds of crime
- **Removing** crime proceeds from Eng and Wales
- Failure to **disclose** money laundering info to authorities
- Firm's **nominated officer** failure to disclose money laundering info to authorities
- **Tipping off **individual that investigation into money laundering underway
- **Prejudicing** money laundering investigation
98
Most relevant offence under Proceeds of Crime Act 2002 for solicitors
Arranging
(ie entering or becoming concerned in arrangement which KNOW OR SUSPECT facilitates acquisition, retention, use or control of CRIMINAL PROPERTY)
99
Explain the breadth of the 'arranging' offence (under Proceeds Crime Act 2002) as applying to solicitors?
Wide - covers any act which assists another to launder money
Doesn't matter if didn't pass through solicitor's hands
e.g. client is buying a company and discover lots of their contracts were obtained by paying bribes
100
What constitutes 'know or suspect' for purposes of proceeds of crime offences?
Threshold is "suspicion"
Subjective test - bar is low:
D must think there is a possibility which is MORE THAN FANCIFUL that relevant facts exist
(ie that there is potential money laundering)
(nb more than vague feeling of unease)
101
What is criminal property for purposes of Proceeds of Crime Act?
Person's direct or indirect benefit from criminal conduct
e.g. profits from crime / stolen property
Must know or suspect property benefitted from criminal conduct
Must have been an initial criminal offence committed (in UK or abroad if it would have also been criminal in UK)
102
What is excluded from 'arranging' offence for solicitors under Proceeds of Crime Act?
Taking steps in litigation, provided not sham litigation
Dividing assets in accordance with court judgment (eg divorce)
But could not assist in reinvesting them
Consider whether client would be committing offence by receiving the property
103
Defences to s 328 (arranging) Proceeds of Crime Act?
Authorised disclosure
Reasonable excuse for not making authorised disclosure
- intended to
- rare - e.g. info already in domain
- must record reasons
Overseas defence
- knew or believed occurred abroad and lawful in that country
- S of S can override
104
When will authorised disclosure defence apply for individual solicitors?
(proceeds crime act/arranging)
Include diff stages of when AD made
Make authorised disclosure to constable, HMRC or firm's nominated officer (MLRO)
(ideally to MLRO)
AND got consent of nominated officer or NCA
If proceed without consent, no defence
A) Soon as practical prior to transaction
B) If prohibited act is ongoing:
- made whilst ongoing
- when began to act, did not know or suspect
- soon as practicable after first suspect
- make on own initiative
C) AFTER profited act if:
- good reason
- soon as practicable
- own initiative
(nb just bcos consent to money laundering ops, prof conduct etc still relevant)
105
Responsibilities of nominated officer (MLRO) for defence to arranging to apply under Proceeds of Crime Act?
- responsible reporting ML concerns to NCA
AKA suspicious activity report (SAR)
- online ideally or by post
- not obliged raise SAR whenever internal concern raised - discretion
- criminal offence if fail to report when reasonable grounds to suspect ML
- must not give consent to solicitor who has raised AD and once MLRO made SAR until either:
1. received NCA consent; or
2. heard nothing for 7 working days after sending SAR; or
3. refused by NCA
- don't consent unless granted within 31 days from refusal (can be extended in certian situations)
(31 days starts day of approval)
106
Penalties for arranging OR acquisition, use or possession under Proceeds Crime Act?
(ie involved arrangement know or suspect facilitates ML)
Max 14 years imprisonment
107
Explain s 329 - acquisition, use or possession offence - under Proceeds Crime Act / how applies to solicitors?
Acquire, use or possess criminal property
Usually where no involvement in original crime but benefitted
e.g. paid extortionate legal fees and possibly criminal property
108
Defences to s 329 acquisition, use or possession offence under Proceeds Crime Act?
Overseas defence
Authorised disclosure defence
Adequate consideration defence (main one)
- receive money for legal fees, inc disbursements
- as long as fees reasonable considering value of work
- and provided did suspect goods or services provided would help carry out illegal activity
109
Explain concealing offence and defences under Proceeds of Crime Act?
Offence conceal, disguise, transfer or remove outside of UK (inc Scotland etc)
E.g. resi - converting proceeds into property
Transfer - from client account etc
Authorised disclosure and overseas defences
Main one for solicitors
110
Explain the failure to disclose offence under Proceeds Crime Act?
Commit offence if:
- knew/suspected OR reas grounds to that ML
(reas = what should have known)
- receive in course of business/regulated sector
- info will or may assist identifying launderer/property
(considering if was reas to think may assist)
- does not make disclosure soon as practicable
Not necessary for ML to have even occurred
111
When can you committed of offence under PCA even if did not KNOW or SUSPECT that ML?
Failure to disclose
(nominated officers or normal individuals)
Objective as well as subjective test
Reasonable grounds to know or suspect
NB training defence applies if there were reasonable grounds to suspect but had no proper training
112
Defences to failure to disclose offence under Proceeds Crime Act?
Authorised disclosure / intended disclosure
Training defence
- if reasonable grounds to suspect but not received proper training
Legal professional privilege
- advice and litigation privilege applies
- EXCEPT cannot rely if purpose of advice is carrying out criminal offence
Overseas defence
113
Penalties for failure to disclosure under Proceeds of Crime Act?
Max 5 years imprisonment
114
How does failure to disclose offence apply differently to nominated officers?
(Proceeds of Crime Act)
If know/suspect or reas grounds to know or suspect money laundering DUE TO INTERNAL REPORTS
And fail to make disclosure to NCA as soon as practicable
Defence if reasonable excuse for not disclosing
115
What is the tipping off offence? (Proceeds Crime Act)?
2 offences.
1. Disclosing a disclosure
- usually to NCA or MLRO
- to anyone if likely prejudice
(eg house delay because investigating)
2. Disclosing an investigation
- investigation carried out or contemplated
- and that is likely prejudice
Irrelevant whether intended to alert ML or prejudice investigation
Both - must have received info course business regulated sector
116
Defences to tipping off?
(Proceeds Crime Act)
Did not know or suspect disclosure would prejudice investigation
(eg maybe if informs client believing they will fully cooperate with authorities)
Or if purpose is to dissuade client from engaging in alleged money laundering - but treat with caution
117
Penalties for tipping off
Unlimited fine and / or max 2 years prison sentence
118
When will someone prejudice investigation (and commit offence under PCA)?
(baso same as tipping off but applies non-regulated)
Suspect ML investigation about to commence
And make material disclosure to another
Which is likely prejudice or interferes with relevant material
119
Will communicating confidential information about clients under Proceeds Crime Act conflict with Code of Conduct SRA?
No
Client confidentiality is unless required or permitted by law
Legislation expressly states disclosure won't breach this
Still seek advice if unsure
120
Role of SRA under Proceeds Crime Act?
If direct involvement in money laundering, breach:
- Principle 4 act with honesty and
- Principle 1 duty uphold RoL/admin justice
So likely disciplinary proceedings and significant sanctions
121
Warning signs of money laundering?
1. The client
(e.g. secretive, evasive, avoids personal contact, refuses provide docs, criminal associations)
2. Funding
(large cash payments, unexplained from TPs, foreign accounts etc)
3. Transaction
(unusual features eg loss making, unexplained urgency, litigation settled too easily)
4. Geographical concerns
(eg from far away, unexpected movement between jursdictions, connected with suspect jurisdictions)
122
What is authorised disclosure a defence to?
328, 329 and 327
i.e.
Arranging
Acquisition, use or possession
Concealing etc
(so NOT to failure to disclose, tipping off or prejudicing an investigation)
123
If you do not offer legal aid work but think client may be eligible, what must you do?
Advise client that may be eligible
If necessary, tell them to seek other advice
124
SRA code of conduct requires solicitors to consider clients needs, ____ and ___
attributes and circumstances
nb relevant in considering appropriate funding option
125
What are the main funding options for legal fees?
1. Conditional fee arrangement -
if win, enhanced fee.
if lose, lower or no fee.
2. private funding
- client pays at hourly rate
3. fixed fee
4. damages-based agreement
- if win damages, gets a proportion.
- if don't, get nothing.
5. third-party funding
6. before-the-event insurance
existing insurance policy covers
7. after-the-event insurance
taken out to cover own dibs AND liability for o/s costs if lose
126
explain private funding (of legal fees)?
standard
pay fees based on hourly rate / time spent
dibs and expenses charged seperately
told changeout rates at srart
ultimate cost open-ended as depends how long it takes
client personally responsible regardless outcome
127
good funding option where client carrying out claim themselves but just need solicitors help on one thing eg attending hearing
fixed fee
128
Can a fixed fee be changed at a later date?
Not unless client agrees
129
Difference between contentious and non contentious businesss
Contentious:
- work done in relation to proceedings
- only starts once proceedings been issued
Non-contentious:
- anything not the above ^
130
Difference between contentious and non-contentious business agreements?
Contentious business arrangement must state its a contentious business arrangement
If contentious business arrangement allows solicitor to be paid via hourly rate, can apply to court for assessment of costs
Contentious - limits to fees which can be charged in certain circumstances, does not apply non-contentious
Can't receive contingency fee under contentious business arrangement
(nb wouldn't be relevant anyway to non-contentious)
131
Options for funding civil litigation?
1. Hourly rate
2. Variable fees
i.e. solicitor's fee varies upon outcome
A) Conditional fee arrangements
B) Damages based agreements
132
Max success fee under a CFA?
(clue: percentage)
100% of solicitor's usual hourly rate
Additional cap on PI cases - can't recover more than 25% of damages received
133
If entered CFA and client wins, can other side be ordered to pay the client's success fee?
No, client must pay it.
134
Can disbursements be included as part of a CVA?
Is this usual in practice?
Yes permitted to include
Firms usually exclude cos don't want to be out of pocket
- so if don't include dibs under CFA and client loses, probs won't need to pay solicitor's fees but will have to pay dibs
(eg counsel's fees)
135
Can a defendant enter a DBA?
Only if counter-claiming
136
If client wins under DBA, costs payable to opponent will be paid from ___
The damages recovered
(so the damages will be used to cover any of opponent's costs and their own legal fees)
(if there is a shortfall, personally liable to pay balance)
137
May be good idea to combine CFA/DBA with .... ?
ATE
(after the event insurance)
(bcos if client loses, will not be responsible for own solicitor's fees but may be liable for their dibs and usually to pay opponent's costs)
138
DBA formalities?
Impact if not followed?
1. In writing
2. State what proceedings relates to
3. State circumstances in which fee payable
4. State reason for fee being the figure it is
Agreement unenforceable and client not need to pay any fees.
139
If a client terminates retainer early when there is a DBA, can firm still recover fees for work done until this point?
Yes
In textbook example, the DBA stated they would be paid if terminated before conclusion of case.
140
Diffs and similarities between CFAs and DBAs?
- CFA success fee limited to 100% usual hourly rate / DFA: 50% damages
- both must be in writing
- neither cover client's own dibs or opponent's costs
141
Is client allowed to choose own solicitor if using before-the-event insurance proceedings?
from point of starting proceedings, client is entitled to instruct solicitor of their choosing
(but do prefer to use panel of solicitors)
142
Is ATE insurance available for all types of civil litigation?
Not for family law
143
What does after the event insurance usually cover liability for?
Dibs and opponent's costs
Is possible to obtain for own legal fees (not as usual)
144
Will ATE (after the event insurance) be recoverable from opponent if win?
No.
145
Is third party funding available to defendants? Why/why not?
Not usually
Because get their fees from what is recoverable at end of case
But sometimes do if Ds have substantial counterclaim
146
Usual chance of success required for after-the-event insurance and TP funding?
at least 60%
(nb usually over 50% for before-the-event)
for tp funding will also want sizeable sum likely recoverable
147
SRA code of conduct risks where TP funding?
breaching client confidentiality
conflict of interest if TP have excessive influence over the case
148
Requirements for law firm to carry out legal aid work?
Contract with Legal Aid Agency relevant to type of work they are offering
eg criminal
Subject to annual audit from Legal Aid Agency
149
If there is third party funding over a case and client loses, who pays opponent's costs?
Discretion of court
If TP had lots of control over the case, they could be liable for all of it
150
Can law firms (who are registered for legal aid) decline instructions in legal aid cases?
Yes
Except duty solicitor scheme
151
Duties of law firms authorised for legal aid to Legal Aid Agency?
Does this override any duties to clients?
Tell them if client acts unreasonably
(eg refuse settlement offer)
Or if client gave Legacy Aid Agency misleading info
Overrides duty confidentiality to client
152
Who do legal aid solicitors get their fees from?
Legal Aid Agency at end of case
(usually get less than would if private client)
153
Additional duties of solicitor acting for a legal aid client?
Inform the court and other parties that legal aid client
Seperate duties to Legal Aid Agency (sep queue card)
154
2 categories of CIVIL Legal Aid work, what falls into those categories and explain the difference?
1. Controlled work
(legal help and help at court)
- solicitor decides if client eligible for controlled work
2. Licensed work
(legal representation)
- legal aid agency decide if client is eligible on case-by-case basis
(licensed begins with L, as does Legal Aid)
(makes sense - legal representation is more signif so right that LAA make decision)
155
3 types of legal aid available in civil law and whether it is controlled or licensed work?
Brief explanation of each.
1. Legal help
CONTROLLED
- basic advice and limited next steps
e.g. drafting a letter
(maybe ACAS?)
2. Help at court
CONTROLLED
- advice and assistance, inc advocacy
- must relate to specific hearing instead of case generally
e.g. possession proceedings, assist client in putting argument to court re postponing eviction
3. Legal representation
LICENCED
- either party to proceedings or considering commencing proceedings
- can cover up to and including representation at court
156
nb family law and immigration not subject to standard civil legal aid rules but don't need to know the subject-specific rules
157
Difference between help at court and legal representation (civil legal aid)?
help at court is limited to advice in relation to particular proceedings (does inc advocacy)
e.g. in putting arguments to court to delay eviction
legal representation can cover conduct of client's case, up to and including representation at court
help at court is controlled = up to solicitor to decide if eligible
legal rep is licensed = Legal Aid Agency must decide if eligible
158
Legal representation can be granted on ___ or ____ basis.
Explain the difference.
(civil law)
(clue: varies how much aid will receive)
Full or investigative.
Investigative
- covers solicitor's work in assessing strength of case
Full
- covers issuing and conduct of proceedings, inc advocacy
159
What do legal aid agency grant if they approve application for civil legal aid?
can this be limited?
Legal aid certificate
yes:
- cert usually restricts extent of representation which solicitor can given
and/or sets max amount can pay
If solicitor thinks will require more work, must apply for amendment to certificate and/or costs inc
160
What CIVIL cases will legal aid be / not be available for?
Is there an exception......
Yes, inter alia:
- homelessness
- family domestic abuse
- discrimination
- immigration
- care proceedings
NOT for:
- business-related matters
- family disputes re children
- personal injury
- divorce
- cases financed by CFA
HOWEVER (!!!!!)
- even if falls outside scope, may obtain if "**exceptional**" circumstances; or
- LAA think refusal breach **human rights**
(if exceptional - still need to satisfy means and merits tests)
161
If case falls within scope of legal aid/permitted anyway due to exceptional circumstances, what next hurdles must it overcome?
MERITS and MEANS tests
(i.e. merits of case and financial circumstances)
162
Explain the merits test for legal help and help at court?
(civil legal aid)
'Sufficient benefit test'
- sufficient benefit to client considering circumstances (personal circum and case itself)
163
Explain merits test for legal representation?
(civil - legal aid)
1. Decent prospect of success; and
- Usually at least 50%; and
2. General merits test or specific merits test; and
(depending on nature of case)
- monetary claim:
amount likely to recover vs spend
- non-monetary:
if benefits justify likely cost a client would likely spend (i.e. 'reasonably paying private client test')
3. Not other forms of aid available
e.g. insurance or CFA
164
What are the means test for civil cases?
(always combine with their partners)
Must not exceed:
1. Capital:
- £8000
- or £3000 for immigration
(if capital over £8k, no need to consider income)
2. Income:
- welfare benefits: automatically qualify income
(still need to show capital ^)
- monthly GROSS income: £2,657 or less
(less if 5 or more kids)
- if £2,657 or less - deduct living costs etc
( to arrive at monthly DISPOSABLE income)
- must be less than £733
165
When will a client who satisfies means test for civil legal aid still have to pay a CONTRIBUTION towards legal fees?
- If is licensed work (ie legal representation); and
- means test revealed can afford to pay contribution (even though below limits); and
- monthly disposable income is over £315 or capital above £3k.
166
What is the statutory charge in civil legal aid?
If client benefits financially by partially/fully winning case or settlement
any money or property received can be used in payment of solicitor's fees.
Usually must have received legal representation.
167
In what order will Legal Aid Agency try to recover fees it has paid solicitor?
1. Any costs paid by other side
2. If shortfall, any contribution paid by client under legal aid offer
3. If still shortfall, money recovered or preserved in proceedings
(eg client's winnings)
168
What must solicitor do to facilitate legal aid agency in collecting the statutory charge?
(i.e. any financial benefit client received can be used to pay fees of case)
(civil legal aid)
pass any money held for and payable to client under a court or order to settlement to Legal Aid Agency
(eg receive settlement fees from other side - instead of transferring to client, send to legal aid agency)
169
Once received (usually by solicitor), when must property or assets be paid to legal aid agency for statutory charge purposes ?
immediately
unless property recovered is client's home - LAA may agree to postpone enforcement of statutory charge
if do that ^, will register against title to property so fees recouped when property sold
170
When can legal aid be offered on emergency basis?
for legal representation (re-cap: form of licensed work)
e.g. domestic violence threat or homelessness
urgent need advice and assistance
if application successful, LAA issue legal aid certificate
171
what are rights of audience?
examine witnesses and appear before court
172
when is litigation covered as a reserved legal activity?
issuing proceedings and commencing, prosecuting and defending them
e.g. laying info before court
173
What are included and excluded as reserved instrument activities?
- Preparing and lodging a formal legal document dealing with transfer or charge of land relating to real or personal estate; or
- Instrument relating to court proceedings
Wills and powers of attorney excluded
174
What counts as 'conduct of litigation', for activity to be classed as reserved?
1. Issuing proceedings any court
2. Commencing, prosecuting and defending proceedings
3. Performing ancillary function to proceedings
e.g. entering appearances to actions
- e.g. laying info before mags = commencing
e.g. online divorce facilitator (assists drafting docs to obtain divorce)
- was not litigation where parties lodged docs at court themselves
- narrowly construed because potential criminal offence if not authorised/exempt
- any legal advice in connection with court proceedings / correspondence with opposing party not count
175
What are 'reserved instrument activities' for purposes of being reserved legal activity?
preparing / lodging formal legal doc
dealing with transfer or charge of land relating to real or personal estate
or relating to court proceedings
some docs excluded
eg wills / powers of attorney
176
requirements before can carry out reserved legal activities ?
authorised by approved regulator; or
exempt
177
Approved regulator for solicitors and who carries out regulatory function?
Law Society approved regulator
Regulatory function carried out by SRA
178
Who authorises solicitors to carry out reserved legal activities?
SRA for all except notarial activities
179
Main examples when someone WILL be able to carry out reserved legal activities due to exemption?
Rights of audience if granted by court for particular case
(e.g. MacKenzie friend)
Probate - if employee acting under supervision of authorised person
Some exemptions for charities and trade unions
180
Penalties if carry out a reserved legal activity if not authorised or exempt?
criminal offence up to 2 yrs imprisonment
Rights of audience/litigation - also contempt of court
181
Who oversees regulation of lawyers?
Legal Services Board (LSB)
i.e. a regulator can only regulate lawyers if it is LSB approved / regulated
(e.g. SRA is regulated and approved by LSB)
LSB responsible for oversight of regulation but does not authorise firms !
182
Legal Services Board have duty to promote what objectives?
- Public interest
- Rule of law
- Improve access to justice
- Consumers
- Competition in legal sector
- Effective legal profession
- Public understanding of citizen's rights and interests
- Adherence professional standards
(those regulated by LSB subject to same objectives/comply with - inc SRA)
183
Can individuals instruct a barrister or must a solicitor do it for them?
Yes in some civil cases
184
Authorisation/regulation for CILEX?
Can't work independently and must be supervised by solicitor
Can be involved in ownership of firm
Regulator is CILEx Regulation
- who can authorise to provide all types reserved legal activities except notarial
185
Who regulates barristers and can they be authorised to do all types of reserved legal activities?
BSB
All except notarial
186
Who is approved regulator for licensed conveyancers and what reserved legal activities can they authorise?
Council for Licences Conveyancers
Conduct reserved instrument activities, probate activities and administer oaths
187
Trade marks and patent attorneys - approved regulator and what reserved legal activities can they be authorised to do?
Intellectual Property Regulation Board
All except probate and notorial
188
Costs Lawyers - who regulated by and what reserved legal activities?
Costs Lawyers Standard Board
Rights of audience, conduct litigation and administer oaths
189
Which body can authorise notaries ?
Master of Faculties
190
Who regulates claims management companies?
FCA
191
Main examples of legal services which aren't reserved and therefore not regulated?
○ Will writing (WH Smith), family law advice (J my gyal) and employment law advice (peninsula/ACAS)
Some voluntarily self-regulate (e.g. code of conduct)
192
Who are the approved regulators for reserved legal activities?
∘ Solicitors Regulation Authority
∘ Bar Standards Board
∘ CILEx Regulation
∘ Council for Licensed Conveyancers
∘ Intellectual Property Regulation Board
∘ Costs Lawyers Standards Board
∘ Master of Faculties
NB: if firm offering conveyancing services, firm must be authorised
(not just the individual)
193
If authorised by SRA, will firm be subject to SRA-regulation in respect of ALL legal services it carries out or just reserved legal activities?
All
194
SRA takes _____ approach to regulation?
Risk-based
i.e. misconduct most likely harm public interest
e.g. huge firm or lots of complaints
195
What does SRA see 2 main purposes of its regulation to be?
protect consumers of legal services
support RoL/admin justice
196
What does SRA Code of Conduct require firms to do in terms of own risk management?
Identify, manage and monitor all material risks to business
197
What 3 types of businesses can seek authorisation from SRA?
1. Recognised sole practices
(e.g. Kelcks - often employ ppl but responsible for whole firm)
(rare cos annoying eg if wanna go on holiday/tech)
2. Recognised bodies
3. Licensed bodies
- ASBs
198
What is a 'legal services body'?
(NB: this is one of the businesses which can be authorised by SRA)
Most law firms
All managers and interest holders legally qualified
At least 75% managers legally qualified and those who aren't are approved by SRA.
And 75% shares held by legally qualified people.
(badly worded in textbook with legally qualified thing but that's what it says ^ doubt need to know numbers)
Usually partnerships, LLPs or companies
199
What will be licensed body, for purposes of being eligible for SRA authorisation?
(Nathans)
ASBs
Can be owned/managed by people who aren't legally qualified
Must be at least one manager authorised by SRA or another approved regulator
And, to count as licensable body, one of following must apply:
- Non-authorised person is a manager or shareholder; and/or
- Another company manages/holds interest in it and 10% voting rights within that other company are held by non-authorised people
200
What is the effect of SRA authorisation?
(clue: there are things you are now authorised to do but also things which you have to do)
Can carry out reserved legal activities EXCEPT notarial
Must always have COLP and COFA (SRA approved)
If a licensed body, they are termed HOFA and HOLP
(bit confusing and doubt need to know but also business is limited to professional services provided by individuals practising as lawyers of other jurisdictions - doesn't make sense to me so ignore I think)
201
How to apply for SRA authorisation?
What responses can SRA make to application?
- Apply SRA if want carry out reserved legal activities or immigration work
- SRA investigate
(risk-based approach to investigation)
- may grant blanket authorisation, authorise provision of SELECTED services or refuse
- SRA goal of enhancing public confidence etc
FYI some firms don’t need to be authorised because legal services and not restricted legal services but do anyway to reassure clients
202
Penalty for practising without practising certificate?
Criminal offence
203
Requirements to be AUTHORISED as solicitor and be able to act as solicitor?
(those 2 things mean same - clue: focus on word AUTHORISED)
○ Admitted
○ Name on roll; and
○ Has a certificate
(NB: This is different to admission requirements)
204
When will someone be ADMITTED as a solicitor?
- relevant qualifications
- training
- character and suitability requirements
205
other than solicitors, who else needs to meet SRA character and suitability requirements?
anyone applying to become authorised role holder in a firm
e.g. COFA
former solicitors seeking restoration to role
206
Part 1 of what SRA will consider re character and suitability?
(clue: broad principles)
the need to protect public
consider on case-by-case basis to individual circumstances
207
SRA character and suitability assessment:
What criminal behaviour will be relevant?
1. most serious = likely refuse
- dishonestly, perjury, fraud, bribery, violent/sexual, obstructing course justice, discrimination
- or caution for dishonesty, violence, sexual or discrimination
2. Serious = may refuse
- ^ caution or custodial sentence for any offences not above
- or if received conditional discharge/bind over
208
SRA Character and Suitability Assessment
What non-criminal conduct may be taken into account?
□ Dishonest, violent, threatening, harassing, discrimination
□ Deliberate assessment offence e.g. plagiarism
□ Avoiding responsibility for debts, dishonesty, managing finances, declared bankrupt/can't manage finances
Serious disciplinary or regulatory findings or sanctions
209
Disclosure requirements of individual Character and Suitability Assessment?
disclose all matters inc overseas which are relevant
provide any further info requested by SRA
failing disclose taken into account by SRA during determination
ongoing obligation to report new matter or any changes
210
When can solicitor who has been admitted to role apply for practising certificate?
not suspended and sufficient written/spoken Welsh and English
211
What rights of audience does a solicitor with practising certificate have?
has rights of audience in all courts
but cannot EXERCISE in HIGHER courts (ie Crown upwards) until got specific qualification
212
Does solicitor need to perform reserved legal activities through an authorised body?
Yes
Imp e..g pro bono work if not done through firm
- would need to rely on an exemption
213
When to apply to SRA for renewal practising certificate?
Due for renewal 31 Oct Halloween each year
Pay fee
214
Solicitor must inform SRA ____ of any ___ changes about self or practice
Promptly
Material
215
When MUST SRA refuse application for practising certificate?
Public interest to do so
216
When could SRA impose conditions on practising certificate?
§ Unsuitable to undertake certain activities
§ Likely risk interests clients/TP/public
§ Probs wont comply with/needs monitoring re SRA regulation; or
§ Should take specified steps conducive to regulatory objectives
Must specify these requirements / restricted activities etc
217
When are freelance solicitors not required to be authorised by SRA?
What are they still required to do?
A) non-reserved activities (family, employment, personal injury);
B) Any reserved legal activities provided through an authorised BODY; OR
C) Meet certain requirements
e.g. practised for min three years, self-employed, practise in their own name, INDEMNITY insurance, not employ and only limited categories client money
Must still:
- notify SRA intend to practice
- SRA put their details on public register
218
If SRA refuse granting practising certificate or attach conditions, who can you apply to review?
SRA itself
or High Court
219
Do non-commercial organisations providing legal advice need to be authorised?
Can solicitors working for them provide reserved legal activities to public?
(eg charities, trade unions)
No
Solicitors can provide to public ONLY on behalf of employer
But must be covered by professional indemnity insurance
220
solicitors practising in which bodies aren't required to have adequate and appropriate insurance?
and which aren't required to meet SRA MINIMUM standards of insurance?
Do need:
- sra authorised
- freelance or non-comm org if reserved
(non-comm org - duty to check if organised)
Don't need adequate and appropriate (ie the minimum) if:
- in-house
- freelance or non-commercial orgs and providing NON-reserved
(ie employment, family, PI)
221
Who is liable to pay remainder if professional indemnity insurance doesn't cover costs?
The solicitor
(not the firm)
222
What must firm do if can't get insurance cover once one cover ends?
- minimum Ts and Cs of qualifying insurers will mean extends for 90 days
- inform SRA
- if can't find another after 30 days, notify SRA and can't take any new work
- If can't find another after 90, cease practising
223
Can in-house solicitor provide reserved legal services to public?
No
To their employer only
224
SRA MINIMUM requirements for professional indemnity insurance?
(inc how much must take out cover for)
- list of participating insurers
- recognised and licensed bodies: cover at least £3m exc defence costs for one claim
- £2m all other cases
(e.g. sole traders or not claims)
(can't attempt to exclude liability below this)
- Everyone employed covered
- Must be continuous
225
Can solicitor provide regulated legal services to public if working for commercial unregulated org?
No
But can provide legal services
(just not reserved)
226
ADDITIONAL SRA insurance requirement
Must be ____ and ____
What constitutes ^ ___ and ___ insurance ?
adequate and appropriate
- for firm/solicitor to decide on individual circumstances
eg type of clients, claims could be made
- keep under review
- may require top-up from minimum Ts & Cs
227
Duty of solicitor in non-commercial organisation re insurance?
Duty on them to check that the body has arranged insurance for them
228
Can solicitors ever exclude or limit liability below the minimum SRA insurance requirements
only freelance or or solicitors working for non-commercial bodies re unreserved activities
pi family emp
229
What information must solicitors provide to clients re professional indemnity insurance?
Must make available:
- info re firm's compulsory level of indemnity insurance
, inc name of insurer and territorial coverage
AND
Freelancers providing RESERVED legal activities to public must inform clients that they are not required to meet the minimum Ts and Cs
AND
MUST tell if insurance cover may influence client's decision to instruct
- e.g. probs unwilling instruct over £10m claim if indemnity cover is £5m
230
Can SRA authorised firms limit their liability?
Yes but not beyond minimum level under SRA minimum Ts and Cs
But must have regard to professional conduct limits etc
231
Can solicitor be admitted onto roll without practising certificate?
Yes
(but cannot be solicitor w/o practising certificate)
232
which courts enforce Equality Act?
Civil courts
nb employment claims dealt with in employment tribunal
Otherwise brought in County Court
233
What are protected characteristics under the Equality Act?
- race
(inc gypsies)
- religion and belief
(relate to substantial part of human life, worthy of respect and cogency)
- sex
- sexual orientation
(covers heterosexual, bi and gay)
- gender reassignment
(includes if propose to undergo treatment - no requirement for medical supervision)
- maternity/pregnancy
- age
- disability
- marriage/civil partnership
234
Which protected characteristic requires positive steps to be taken?
Disability
235
What constitutes disability under Equality Act?
Physical or mental impairment
substantial or long-term effect on ability to carry out everyday activities
Includes HIV
High threshold
236
What are the three elements of direct discrimination under equality act?
Explain each limb.
(overt and obvious)
Treat someone less favourably than would others due to their protected characteristic.
1. Comparator
- real person or if not available, hypothetical
- circumstances materially the same
2. Less favourable
- any disadvantage will suffice / doesn't have to be tangible
- intention irrelevant
(although may be relevant when comes to remedies)
3. Because of their protected characteristic
- does not need to be main reason, just an influence
* doesn't matter if don't actually have that characteristic * !!!!
e.g. thought Muslim but weren't
237
When will there be a defence to direct discrimination?
Defence of justification
Only if relates to age
NO discrimination if proportionate way of achieving legitimate aim
238
What protected characteristic does indirect discrimination not apply to?
Maternity and pregnancy
So ^ can only claim for direct discrimination
239
When will there be a claim for indirect discrimination?
Provision, criterion or practice is of universal application
but has adverse impact on those sharing a protected characteristic
and is not proportionate means of achieving a legitimate aim
e.g. requires employee to work full time, could disadvantage women as a group because childcare responsibilities
- employer may justify as needing a full-time worker
240
Additional option for disability discrimination under Equality Act?
Is there a defence?
Treats unfavourably due to something arising in consequence of disability
No need to compare behaviour to others
Must have known or reasonably ought to have known about their disability
May justify if can show proportionate means of achieving legitimate aim
(can still use direct or indirect, but may be easier to use this since no comparator required)
241
What is victimisation under Equality Act?
Do you need protected characteristic?
No need PC
Subject to detriment because done or believe has/may do a 'protected act'
Protected Act means:
- bringing proceedings under EA
- giving evidence/info in EA proceedings
- alleging another breached EA
- doing anything related to provisions of act
Detriment means putting at disadvantage or making position worse
e.g. witness in proceedings and singled out at next pay review
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What is harassment under Equality Act?
Conditions? Must it relate to a PC?
1. unwanted conduct which relates to a PC and:
- violates dignity; or
- creates intimidating, hostile or offensive environment
^ applies to all except pregnancy/maternity, marriage and civil partnership
2. OR
- unwanted conduct of sexual nature; and
- same effect as above ^
DOES NOT NEED TO RELATE TO A PC
3. OR
- unwanted sexual conduct or relates to gender reassignment; and
- treat less favourable due to rejection of or submission to the conduct
- DOES NOT NEED TO RELATE TO A PC
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Three requirements to DUTY to make reasonable adjustments?
(duty means take positive steps...clue)
Only relates disability
Disabled person must be at a SUBSTANTIAL disadvantage
(ie more than minor)
1. Provision, criterion or practice
- reas steps to avoid the sub disadv
2. Physical features
- reas steps to avoid the sub disadv
3. Provide auxiliary aid
- reas steps to provide the aid
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Why are solicitors subject to anti-discrimination provisions of Equality Act?
Will they always be?
Because they are a service provider
Service provider can be individual or business
So solicitors providing legal services, even if unregulated or not receiving payment
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What is it unlawful for service providers under Equality Act?
Can't harass (due to PC)
Can't discriminate (due to PC) or victimise by:
- refusing to act
- providing services on less advantageous terms
- terminating retainer
- subjecting to any detriment
^ applies to all PCs except marriage/civil partnership or age if under 18
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Does vicarious liability apply to acts of discrimination? Is there a defence?
Yes
But defence if took steps as were reasonable to prevent the specific act of discrimination or acts of that description
Must have taken those steps BEFORE the action occurred
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What adjustments must law firms make as SERVICE PROVIDER?
When can claim be brought for failure to do so?
(nb - this goes beyond the basic duty to make adjustments)
Reasonable adjustments for disabled people:
- Physical features
○ Discriminated if no reasonable steps to avoid disadvantage / adopt alternative way provide service
○ Can't pass on costs for adjustments
- applies even if don't currently act for disabled or anticipate that will in future
○ E.g. make building wheelchair accessible
- Must be affected by adjustments to claim
To determine whether "reasonable"
- Consider cost, nature service and size firm
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Burden of proof equality act claims?
Initially on claimant to show prima facie case
Burden then shift to D
if prima facie case, court must find breach of legislation unless D can prove otherwise
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Remedies available for Equality Act?
Is there a limit on award?
Any remedy which High Court could make in tort or judicial review
(regardless of court deciding)
Or if in ET, unlimited compensation
(intend to put as if wrong occurred - eg loss of bonus, injury to feelings also possible - and can make declaration or recommendations)
Usually damages
(can also be injunctions/declarations)
No limit on damages
Sometimes damages for injury to feelings
Can be aggravated
Can be punitive
If firm and employee both liable, don't get double compensation unfortunately - will be jointly liable
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Under Equality Act, what protections are available to a prospective employee?
Must not discriminate or victimise in:
- arrangements for deciding who to offer job to; or
- terms of employment; or
- by not offering employment
Must not harass
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Protections available under EA for current employees?
Can't discriminate or victimise re:
- terms of employment; or
- way provides opportunities for promotion, transfer, training, or receiving any other benefit/service; or
- by dismissing; or
- subjecting to any detriment.
(detriment = reas employee view been disadvantaged - no need physical/financial consequence)
Can't harass
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Where may discrimination against employees be lawful?
- Can demonstrate nature of job only those with a particular PC able to do it (this benefits person with the PC) and proportionate means legit aim
- E.g. RC for head teacher to be RC
Usually irrelevant solicitors
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What adjustments must employers take for disabled employees or prospective employees?
- Reas adjustments for disabled employees/prospective
- unlike for service providers, only if do or should reasonably know disabled
E.g. GLD failed to give Asperger's MCQs
(if fail to, will be discrimination)
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Who can an employee or prospective employee CONSIDERING brining Equality Act claim do to assist them?
Submit Qs to employer to determine whether have a claim
Will then have to do ACAS early conciliation before ET will accept claim
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What protections do barristers receive under EA?
From who?
- Protected from discrimination by fellow tenants/pupils/clerks
- Prospective tenants and pupils are too
- Protected from DHV (disc har vict) by solicitors
(discrimination only if subject to detriment)
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What is positive action under equality act?
can take SOME steps to redress disadvantages suffered by people with protected characteristics and will not be considered unlawful to do so
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What requirement must a firm satisfy to be able to lawfully take positive action under equality act?
(applies if using in capacity as employer or service provider)
1. Firm REAS thinks:
- PC suffer disadvantage; or
- Have needs diff to others without the PC; or
- Participation in activity by PCs is disproportionately low.
(e.g. not going to football on Weds)
Show through something like a survey of clients or workforce
2. Action taken must be proportionate means of achieving one of following legitimate aims:
- Enabling to overcome / reduce that disadvantage; or
- Meeting those needs; or
- Enabling participate that activity
e.g.
specific training for some employees
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What positive action can a firm take in relation to promotion and recruitment?
- Where thinks disadvantaged or disprop underrepresented
- CAN (!!!!!) treat more favourably in recruitment process
- ONLY if they are as qualified as other
- Qualified not just exams etc but overall suitability - like a TIE-BREAKER where two just as good but one has a PC
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How does SRA Code of Conduct link to Equality Act?
Sometimes discriminatory behaviour which is permitted by act will not be permitted by SRA Code of Conduct
Because have broader duty not do discriminate
Also Principle requires EDI so positive duty not to discriminate
Applies to conduct outside of practice
Discrimination is higher end of seriousness in SRA Enforcement Strategy
Also treating people with respect etc includes not just just clients but counsel/witnesses/judiciary etc
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What circumstances does Equality Act make discrimination unlawful in?
not super imp but
workplace / education etc
service providers
anyone who sells goods or provides facilities.
applies to all your services, whether or not a charge is made for them
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