Legal services Flashcards
(163 cards)
1
Q
What is the primary body governing the conduct of legal professionals in England and Wales?
A
The Law Society of England and Wales
The Law Society can create rules for the management and control of legal services bodies.
2
Q
What is the SRA and what does it regulate?
A
The SRA (Solicitors Regulation Authority) regulates solicitors and legal practices in England and Wales
It was established in 2007 and governs over 200,000 solicitors and 10,000 legal practices.
3
Q
What are the two primary aims of the SRA?
A
- Ensure solicitors and legal practices meet SRA standards
- Take disciplinary action where standards are not met
4
Q
What disciplinary actions can the SRA take against solicitors and legal practices?
A
- Action through the Solicitors Disciplinary Tribunal
- Prohibiting legal practices from carrying on their work
5
Q
What is the purpose of the SRA register?
A
- Promote trust in the legal profession
- Confirm if someone is a solicitor
- Identify regulated legal practices
- Inform about closed legal practices
- List prohibited individuals from practicing as solicitors
6
Q
What does the SRA uphold through its standards and regulations?
A
- The rule of law
- The administration of justice
7
Q
What document outlines the standards of behaviour for the legal profession?
A
SRA Standards and Regulations (StaRs)
StaRs replaced the previous standards in the SRA Handbook (2011).
8
Q
What are the seven fundamental ethical principles outlined in StaRs?
A
- Uphold the rule of law
- Uphold public trust and confidence
- Act with independence
- Act with honesty
- Act with integrity
- Encourage equality, diversity, and inclusion
- Act in the best interests of each client
9
Q
True or False: Legal advice is considered a reserved legal activity under the LSA.
A
False
Legal advice is not classified as a reserved legal activity.
10
Q
What is the formula for determining risk in risk-based regulation?
A
risk = impact × probability
11
Q
What must individuals and businesses do to exercise reserved legal activities?
A
They must be authorized by an approved regulator, such as the SRA.
12
Q
List three examples of reserved legal activities under the LSA.
A
- Exercise of a right of audience
- Conduct of litigation
- Reserved instrument activities
13
Q
What is the role of the Solicitors Disciplinary Tribunal?
A
To take action against solicitors who breach the code of conduct, including fines, suspension, or being struck off the register.
14
Q
What is risk-based regulation?
A
A regulatory approach where bodies like the SRA prioritize their mechanisms and allocate resources proportionately based on risk.
15
Q
What is the significance of the simplification of the SRA Principles?
A
It represents an increased level of trust in lawyers.
16
Q
Fill in the blank: The SRA regulates over _______ solicitors and _______ legal practices.
A
200,000; 10,000
17
Q
What are probate activities?
A
Preparation of any probate papers in relation to any proceedings in England and Wales.
18
Q
What do notarial activities include?
A
Activities that were customarily carried on by notaries under the Public Notaries Act 1801 prior to the enactment of the LSA.
19
Q
What powers are conferred on a commissioner for oaths?
A
Exercising powers under the Commissioners for Oaths Act 1889, Commissioners for Oaths Act 1891, and Stamp Duties Management Act 1891 s 24.
20
Q
Who are LSA regulated providers?
A
Professionals who may carry out reserved legal activities under the LSA include:
* solicitors – regulated by the SRA
* barristers – regulated by the Bar Standards Board
* legal executives – regulated by CILEx Regulation
* licensed conveyancers – regulated by the Council for Licensed Conveyancers
* patent attorneys – regulated by the Intellectual Property Regulation Board
* trade mark attorneys – regulated by the Intellectual Property Regulation Board
* costs lawyers – regulated by the Costs Lawyer Standards Board
* notaries – regulated by the Master of the Faculties
* chartered accountants – regulated by the Institute of Chartered Accountants in England and Wales.
21
Q
What is the role of regulators for legal professionals?
A
Each regulator specifies the reserved legal activities which its members are permitted to exercise.
22
Q
What are unregulated providers?
A
Providers that are not regulated under any legal sector or other specific legislation can still provide legal services as a significant focus of their work.
23
Q
What activities are excluded from the definition of ‘legal activity’ for unregulated providers?
A
Any activity of a judicial or quasi-judicial nature.
24
Q
Who can practise reserved legal activities without being authorized persons?
A
Certain persons can practise reserved legal activities even if they are not authorized persons under LSA Sch 3.
25
What is a right of audience in legal proceedings?
A right of audience has been granted by a specific court in relation to specific proceedings or because of a particular legislative provision.
26
What exemptions exist for conducting litigation?
A person is exempt if:
* a right to conduct litigation has been granted by a specific court in relation to specific proceedings.
* they are a party to those proceedings.
27
What does legal advice or assistance include?
Providing legal advice or assistance in connection with the application of the law or with any form of resolution of legal disputes.
28
What is the obligation of solicitors regarding indemnity insurance?
All solicitors have an obligation to have a valid Professional Indemnity Insurance (PII).
29
When must new legal practices have PII in place?
Before they start practising.
30
What does PII cover for solicitors?
Claims made against them by clients or a third party arising from the legal services they have provided.
31
What is the minimum PII coverage required for a law firm?
At least £3m, referred to as SRA Minimum Terms and Conditions of Professional Indemnity Insurance cover.
32
What must a solicitor do upon becoming aware of a claim?
Notify the insurer as soon as they become aware of a claim or circumstances that could lead to such a claim.
33
What areas are not covered by PII?
PII does not cover:
* dishonesty or fraudulent behaviours commissioned or condoned by the insured practice
* fines or penalties
* liability for bodily injury or property damage
* internal disputes involving partners, shareholders or employees
* personal debts or trading liabilities.
34
When is PII not needed for in-house solicitors?
Because liability is covered by the solicitor’s employment contract.
35
For which specific clients is PII usually not needed?
PII is not needed if acting for:
* work colleagues
* related bodies
* members of an association
* insurers
* local government
* the Crown
* regulatory bodies.
36
What must employers provide for solicitors operating wholly overseas?
An appropriate cover that is reasonably equivalent to that required under the Indemnity Insurance Rules.
37
Summary of key principles
The SRA regulates the code of conduct of solicitors and solicitors’ legal practices in
England and Wales. StaRs contain strict principles and guidelines and a breach of StaRs
can result in serious consequences. The seven key principles of ethics outlined in StaRs
apply to all areas of practice. The SRA operates a risk-based regulation.
* A reserved legal activity is a type of activity that only certain types of qualified legal
professionals are permitted to do: LSA Pt 3. There are six reserved legal activities
prescribed by the LSA. Individuals granted the right to exercise the reserved legal activity
are usually those who are authorised and regulated by an authorised regulator.
* Under the Indemnity Insurance Rules, all solicitors working in private practice and (in
certain circumstances) in-house must have valid PII. PII is also needed when a solicitor
provides any of the reserved legal activities pro bono or when they work for a charitable
organisation or a law centre. There are some types of work where PII is not required.
38
What is the primary aim of the Equality Act 2010?
To simplify and strengthen existing laws providing protection against discrimination
## Footnote
The Equality Act applies to both England and Wales, and Scotland.
39
What are the twin strands of legal provisions in the Equality Act?
1. Protections for individuals
2. Creation of a public sector duty
40
What are some examples of 'protected characteristics' under the Equality Act?
* Race
* Sex
* Disability
* Sexual orientation
* Religion or belief
41
What types of conduct are considered 'prohibited' under the Equality Act?
* Direct discrimination
* Indirect discrimination
* Harassment
* Victimisation
42
What is the public sector duty outlined in the Equality Act?
Public bodies must have due regard to:
* Eliminate discrimination, harassment, and victimisation
* Advance equality of opportunity
* Foster good relations
43
What does 'direct discrimination' mean as defined in the Equality Act?
A person discriminates if, because of a protected characteristic, they treat another less favourably than others
44
True or False: There is a defense to direct discrimination in all cases.
False
45
What is 'indirect discrimination' as per the Equality Act?
Applying a provision, criterion, or practice that disadvantages those with a protected characteristic without good reason
46
Define 'harassment' under the Equality Act.
Engaging in unwanted conduct related to a protected characteristic that violates dignity or creates an offensive environment
47
What is 'victimisation' in the context of the Equality Act?
Subjecting someone to a detriment for doing a protected act or being believed to have done a protected act
48
List some of the protected characteristics as defined in section 4 of the Equality Act.
* Age
* Disability
* Gender reassignment
* Marriage and civil partnership
* Pregnancy and maternity
* Race
* Religion or belief
* Sex
* Sexual orientation
49
Fill in the blank: The Equality Act aims to eliminate discrimination, harassment, and victimisation because of a _______.
[protected characteristic]
50
What is the definition of 'disability' under the Equality Act?
A physical or mental impairment with a substantial and long-term adverse effect on day-to-day activities
51
True or False: The Equality Act protects individuals from discrimination based on their association with someone with a protected characteristic.
True
52
What is required for an organization to justify direct discrimination?
The organization must prove that the discrimination is objectively justified and proportionate to achieving a legitimate aim
53
What does the term 'reasonable adjustments' refer to in the context of disability?
Changes made to reduce the effect of discrimination against individuals with disabilities
54
Under the Equality Act, how is 'gender reassignment' defined?
It includes someone proposing to undergo, undergoing, or having undergone a process for reassigning their sex
55
What type of discrimination occurs when an employer applies a policy that adversely affects those with childcare responsibilities?
Indirect sex discrimination
56
What is the significance of section 149 in the Equality Act?
It outlines the public sector duty to promote equality and eliminate discrimination
57
Fill in the blank: A racial group may comprise individuals sharing more than one categorization, such as _______.
[Black Britons]
58
What is the definition of 'sexual orientation' under the Equality Act?
Sexual orientation towards persons of the same sex, opposite sex, or either sex
59
What is money laundering?
Methods of disguising the source of funds derived from criminal conduct or activities.
60
What are the main duties of law firms regarding money laundering?
Implementing policies, procedures, and reporting mechanisms to prevent money laundering.
61
Which regulatory body requires legal professionals to keep up to date with laws and regulations?
Solicitors Regulation Authority (SRA).
62
What are the key offences related to money laundering under the Proceeds of Crime Act 2002?
* Concealing proceeds of crime
* Arranging the acquisition of criminal property
* Acquiring or possessing criminal property
63
What is a red flag for money laundering activity?
Improper use of a client account for deposits by third parties.
64
What is the maximum penalty for direct money laundering offences under POCA?
14 years’ imprisonment and/or a fine.
65
What constitutes 'criminal property' under POCA?
Property that constitutes a person’s benefit from criminal conduct.
66
Fill in the blank: A solicitor must take care not to become involved with _______.
property that is suspicious.
67
What is the offence under s 330 of POCA?
Failure to disclose knowledge or suspicion of money laundering.
68
Who is usually the relevant officer for disclosures under s 330?
The firm’s Money Laundering Reporting Officer (MLRO).
69
True or False: Tipping off is a criminal offence under s 333A of POCA.
True.
70
What is the offence under s 15 of the Terrorism Act 2000?
Inviting, receiving, or providing money intending it may be used for terrorism.
71
What must firms do under the Money Laundering Regulations?
Conduct a written risk assessment regarding money laundering activities.
72
What are 'relevant persons' under the Money Laundering Regulations?
* Independent legal professionals
* Trust and company service providers
* Tax advisers
73
What is a Suspicious Activity Report?
Disclosure made to the National Crime Agency regarding suspected money laundering.
74
What is the purpose of the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017?
To compel regulated firms to implement anti-money laundering policies and procedures.
75
Fill in the blank: The maximum penalty for failure to report offences under POCA is _______.
5 years’ imprisonment and/or a fine.
76
What is required from firms in their risk assessment?
Assess the risk of being used for money laundering activities.
77
What is the penalty for prejudicing an investigation under s 342?
It can be committed by anyone, not just regulated persons.
78
What does s 327 of POCA define as a basic money-laundering offence?
Concealing, disguising, converting, or transferring the proceeds of crime.
79
Fill in the blank: The Money Laundering Regulations require a _______ approach.
risk-based.
80
What is the purpose of a risk-based approach in firms?
To allow resources to be focused on the areas of greatest need.
## Footnote
This approach helps in managing risks effectively.
81
List some questions firms can ask during their risk assessment.
* Is the client base stable or fluctuating?
* Does the firm have clients in high-risk geographical areas?
* What sectors do they operate in?
* Are client meetings face to face or online?
* Are there risks associated with new products?
82
What must firms establish to manage identified risks?
Written policies, controls, and procedures.
## Footnote
These must be proportionate to the firm's size and nature.
83
Who must approve the firm's documentary framework?
Senior management.
84
What matters should be included in the firm's documentation?
* How risks are managed
* Due diligence processes
* Communication of policies
* Reporting and record keeping
* Compliance monitoring
* Scrutiny of large or unusual transactions
* Management of risks related to new products and technology
85
What is the role of the MLCO?
To be the officer responsible for compliance at the board level.
86
What does MLRO stand for?
Money Laundering Reporting Officer.
87
What training must firms provide to their staff?
Training on money laundering, terrorist financing, proliferation financing, and data protection.
88
What is due diligence in the context of anti-money laundering?
Systems to safeguard against being used for money laundering, including client identity verification.
89
What triggers standard customer due diligence?
* Establishing a long-term business relationship
* Carrying out an occasional transaction over €1,000
* Suspecting money laundering or terrorist financing
* Doubting the adequacy of previously obtained information
90
What must be completed before establishing a business relationship?
* Identify and verify the client
* Assess the purpose and nature of the business relation
* If a company, obtain its number and registered address
* Identify the beneficial owner
91
What is simplified customer due diligence?
Lower level of due diligence applied due to lower risk as determined by the firm's risk assessment.
92
What factors might allow for simplified due diligence?
* Nature of the customer
* Nature of the transaction
* Lack of geographical risk
93
What is enhanced customer due diligence?
A higher standard of due diligence required in higher-risk situations.
94
List some situations that would require enhanced due diligence.
* Large or unusual transactions
* Unusual transaction patterns
* Transactions with no apparent purpose
* Clients providing false documentation
* Politically exposed persons
* Clients from higher risk third countries
95
What additional information must be obtained during enhanced due diligence?
* Customer and beneficial owner's information
* Intended nature of the business relationship
* Source of funds and wealth
* Reasons for the transactions
96
What should firms do if required checks cannot be completed?
Refuse to act or cease acting.
97
What must firms do when conducting simplified due diligence?
Ongoing monitoring for events that may trigger further due diligence.
98
What does 'established' mean in the context of due diligence?
'Established' means they are resident there or, for a business entity, incorporated or have their principal place of business there.
## Footnote
This definition is crucial for understanding where due diligence obligations apply.
99
What regulation sets out the risk factors to be considered in due diligence?
Regulation 33(6) sets out the risk factors to be taken into account.
## Footnote
These factors include those relating to the customer, the product or service, and geographical factors.
100
What are the two further steps required during enhanced due diligence?
* Satisfied that the transaction is consistent with the purpose and intended nature of the business relationship
* Greater monitoring of the business relationship.
## Footnote
These steps are essential for managing high-risk transactions.
101
When enhanced due diligence is required due to a high-risk country, what additional information must be obtained?
* Additional information on the client and beneficial owner (if relevant)
* Additional information on the nature of the business relationship
* Information regarding the client’s source of funds or wealth
* Approval of senior management for establishing or continuing the relationship
* Enhanced monitoring of the business relationship.
## Footnote
These measures are critical for mitigating risks associated with high-risk jurisdictions.
102
As of May 2024, which country is listed as high risk under the Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) Regulations 2024?
* Bulgaria
* Burkina Faso
* Cameroon
* Croatia
* Democratic Republic of Korea
* Democratic Republic of the Congo
* Haiti
* Iran
* Jamaica
* Kenya
* Mali
* Mozambique
* Myanmar
* Namibia
* Nigeria
* Philippines
* Senegal
* South Africa
* South Sudan
* Syria
* Tanzania
* Türkiye
* Vietnam
* Yemen.
## Footnote
This list is subject to further revisions and reflects the current high-risk countries.
103
What is the first step in the checklist for determining due diligence?
Is the MLR applicable?
## Footnote
This initial question sets the stage for applying specific regulations.
104
What regulations should be applied to determine if due diligence is required?
Apply regs 8(1) and 12.
## Footnote
These regulations provide the framework for assessing due diligence requirements.
105
What must be determined regarding the level of risk in due diligence?
Determine whether to carry out standard, simplified, or enhanced due diligence according to the level of risk.
## Footnote
This assessment is crucial for tailoring the due diligence process to the risk involved.
106
What should be done if appropriate steps to mitigate risk cannot be taken?
Refuse to act or cease acting.
## Footnote
This is a critical decision to avoid potential legal and financial repercussions.
107
What is the primary regulating legislation for the financial services industry?
The Financial Services and Markets Act 2000 (FSMA)
## Footnote
FSMA establishes a regulatory regime, including the Financial Conduct Authority (FCA) and the Prudential Regulation Authority.
108
What are the two key provisions of FSMA concerning financial services?
* Section 19(1) - general prohibition on regulated activities by unauthorized persons
* Section 21 - prohibits financial promotions without authorization
109
What does Section 19(1) of FSMA state?
A person cannot carry out a regulated activity unless they are an authorized or exempt person.
110
Define 'regulated activity' according to FSMA.
An activity of a specified kind carried on by way of business relating to:
* investment of a specified kind
* information about a person’s financial standing
* administering a benchmark
* claims-management services
## Footnote
See FSMA s 22(1) for details.
111
What does 'specified' mean in the context of FSMA?
Specified means specified in an order made by the Treasury.
112
What is the definition of 'investment' under FSMA?
Any asset, right or interest.
113
List examples of specified investments under FSMARAO.
* deposits
* electronic money
* rights under a contract of insurance
* shares
* instruments creating or acknowledging indebtedness
* alternative finance investment bonds
* units in a collective investment scheme
* rights under pension schemes
* options
* futures
* contracts for differences
* rights under regulated mortgage contracts
114
What are 'specified activities' according to FSMARAO?
Activities such as:
* accepting deposits
* issuing electronic money
* effecting and carrying out contracts of insurance
* dealing in investments
* advising on investments
## Footnote
See FSMARAO for the complete list.
115
What is the general prohibition under FSMA?
Prohibits carrying out regulated activities without authorization or exemption.
116
What are the two types of authorized persons under FSMA s 31?
* A person with a Part 4A permission
* A person authorized by FSMA
117
What is the exemption from the general prohibition under FSMA for solicitors?
Certain professionals can be exempt when complying with their professional body's regulatory framework.
118
What must be true for a solicitor to qualify for exemption under FSMA s 327?
* They must be a member of a profession
* They must not receive rewards from third parties
* The provision must be incidental to professional services
119
What is the consequence of breaching the general prohibition under FSMA?
Committing a criminal offence, punishable by a maximum of 2 years’ imprisonment.
120
What does Section 21 of FSMA address?
Prohibition on financial promotions unless made by an authorized person.
121
What does 'communicate' mean under FSMA?
Includes causing a communication to be made.
122
Fill in the blank: A 'regulated activity' includes activities carried on by way of _______.
[business]
123
True or False: Activities falling under the general prohibition can be carried out by anyone without authorization.
False
124
What is a checklist step to review compliance with the general prohibition?
Determine if the activity relates to a specified investment.
125
What is the purpose of the Scope Rules for solicitors?
To outline what solicitors can do regarding non-excluded activity under FSMA.
126
What is the definition of 'financial promotion' under FSMA?
Communication of an invitation or inducement to engage in investment or claims-management activity.
127
List the exclusions that apply to specified kinds of activity under FSMARAO.
* Acting as a trustee
* Activities in the course of a profession
* Regulated activities in connection with the sale of a body corporate
128
What is defined as a communication in FSMAFPO art 6?
A reference to the communication, in the course of business, of an invitation or inducement to engage in investment activity
## Footnote
This includes various forms of communication, such as oral or written formats.
129
How is a communication made to another person defined in FSMAFPO art 6?
A communication being addressed, whether orally or in legible form, to a particular person or persons
## Footnote
Examples include telephone calls or letters.
130
What does 'communicate' include according to FSMAFPO art 6?
'Communicate' includes causing a communication to be made or directed
## Footnote
This broadens the definition beyond direct communication.
131
Who is considered a recipient of a communication according to FSMAFPO art 6?
The person to whom the communication is made or, in the case of a non-real time communication directed at persons generally, any person who reads or hears the communication
132
What is the definition of 'electronic commerce communication' in FSMAFPO art 6?
A communication, the making of which constitutes the provision of an information society service
133
What does 'engaging in investment activity' mean according to FSMA s 21(8)?
Entering or offering to enter into an agreement or exercising any rights conferred by a controlled investment to acquire, dispose of, underwrite or convert a controlled investment
134
What characterizes a 'controlled activity' as per FSMA s 21(9)?
It is an activity of a specified kind or one which falls within a specified class of activity, relating to an investment of a specified kind or class
## Footnote
A full list of controlled activities is found in FSMAFPO Sch 1 Pt I.
135
List some examples of controlled activities from FSMAFPO Sch 1 Pt I.
* Accepting deposits
* Affecting or carrying out contracts of insurance
* Dealing in securities and contractually based investments
* Arranging deals in investments
* Managing investments
* Debt adjusting
* Debt counselling
* Safeguarding and administering investments
* Advising on investments
* Agreeing to carry on specified kinds of activity
136
What does 'specified' mean in the context of FSMA s 21(15)?
Specified in an order made by the Treasury
## Footnote
The relevant order is the FSMAFPO.
137
What constitutes an investment as per FSMA s 21(14)?
Any asset, right or interest
138
What defines a controlled investment according to FSMA s 21(10)?
An investment of a specified kind or one which falls within a specified class of investment
## Footnote
The specific kinds are detailed in FSMAFPO Sch 1 Pt II.
139
List some examples of controlled investments from FSMAFPO Sch 1 Pt II.
* Deposits
* Rights under a contract of insurance
* Shares or stock
* Instruments creating or acknowledging indebtedness
* Alternative finance investment bonds
* Government and public securities
* Instruments giving entitlements to investments
* Certificates representing certain securities
* Units in a collective investments scheme
* Rights under a pension scheme
* Options
* Futures
* Contracts for differences
* Agreements for qualifying credit
* Relevant credit agreements
* Rights to or interests in investments
140
What provisions for exceptions does FSMA s 21 include?
The Treasury may specify circumstances in which a person is regarded as acting or not acting in the course of business, and can create further exceptions
## Footnote
This includes exemptions for certain types of communication.
141
What is the nature of the criminal offence for contravening FSMA s 21?
It is a criminal offence punishable by a maximum of 2 years’ imprisonment if convicted on indictment
## Footnote
There is a defense if there were reasonable grounds to believe that the communication was approved by an authorized person.
142
What is the first step in the compliance review checklist for FSMA s 21?
Determine if there is a communication made in the course of business originating from the UK or capable of having an effect in the UK
143
What does the compliance review checklist require to be checked in step two?
Whether the communication relates to a controlled investment
144
What is the focus of step three in the compliance review checklist?
To check if the communication invites someone to engage in investment activity
145
What is considered in step four of the compliance review checklist?
Whether the communication is exempt according to FSMAFPO arts 16–73
146
What does step five of the compliance review checklist inquire about non-real time communications?
If an authorized person has drafted or approved the content of the communication
147
True or False: FSMA s 21 applies to any communication that is exempt.
False
148
What are the most common types of fees available to solicitors?
* private retainers
* conditional fees
* damages-based arrangements
* hourly rate and fixed fees
* third-party funding
## Footnote
These fee structures offer varying levels of risk and payment arrangements for clients and solicitors.
149
What is a private retainer?
An agreement where clients make regular payments to secure the availability of legal services.
## Footnote
Retainer agreements outline the relationship and actions if funds are depleted.
150
What is a conditional fee agreement?
An agreement where fees are paid only if the client wins the case.
## Footnote
This arrangement minimizes risk for clients seeking legal representation.
151
What are damages-based arrangements?
Agreements where legal teams are paid a percentage of the damages recovered if a claim is successful.
## Footnote
These are also known as contingency fees.
152
What caps apply to damages-based agreements?
* 50% cap for most claims
* 35% cap for employment tribunal cases
* 25% cap for personal injury and clinical negligence claims
## Footnote
Caps are inclusive of VAT and specific conditions apply regarding other disbursements.
153
What is hourly billing?
A fee structure where solicitors charge a rate per hour worked.
## Footnote
This method can be less client-friendly due to unpredictability in final costs.
154
What is a fixed fee?
A predetermined total cost for legal services agreed upon at the start of proceedings.
## Footnote
Fixed fees are often used for straightforward legal matters with no surprises.
155
What is third-party funding?
Financing provided by a third party to cover legal costs in exchange for a percentage of the damages obtained.
## Footnote
This option can help clients who cannot afford upfront legal costs.
156
What is legal aid?
Financial help with legal costs administered through the Legal Aid Agency.
## Footnote
Legal aid was first introduced in 1949 and has become more restrictive over time.
157
What are the eligibility criteria for legal aid?
* Type of case
* Financial circumstances
## Footnote
Eligibility is determined by means, merits, and interest of justice tests.
158
What does the means test assess for legal aid eligibility?
It calculates if the applicant is financially eligible for legal aid based on their income and financial situation.
## Footnote
All types of income are considered, including benefits and contributions from relatives.
159
What types of cases automatically qualify for legal aid?
* Mental health tribunals
* Children in care
* Child abduction
## Footnote
Legal aid is generally granted without the need for additional tests in these cases.
160
What tests are applied to determine legal aid eligibility in criminal cases?
* Means test
* Merits test
* Interest of justice test
## Footnote
The interest of justice test applies in significant legal questions or complex cross-examinations.
161
What is legal expenses insurance?
Insurance that covers legal costs for disputes related to personal injury, contracts, property, and employment.
## Footnote
It can be purchased as standalone or as part of other insurance policies.
162
What does legal expenses insurance not cover?
* Pre-existing issues
* Legal costs before claim acceptance
* Claims with less than 51% likelihood of success
* Specific exclusions in the policy
## Footnote
Insurers can withdraw claims if success seems unlikely.
163
What are the two types of legal expenses insurance?
* Before the event
* After the event
## Footnote
These types differ based on timing related to the legal action.
