CILEx L3 Professional Ethics for Legal Professionals 3 — Questions and Answers
Question 1: What is the significance of the 'Legal Services Act 2007' for the regulation of legal professionals?
- It created a new regulatory framework with the Legal Services Board as oversight regulator, introduced alternative business structures, and codified regulatory objectives (Correct answer)
- It abolished the distinction between solicitors and barristers
- It required all legal professionals to be regulated by the SRA
- It created the Supreme Court and reformed the judiciary
Correct answer: It created a new regulatory framework with the Legal Services Board as oversight regulator, introduced alternative business structures, and codified regulatory objectives
The Legal Services Act 2007 reformed legal services regulation by creating the Legal Services Board (oversight regulator), introducing alternative business structures (ABS) allowing non-lawyers to own law firms, and establishing eight regulatory objectives.
Question 2: What is 'continuing competence' as a professional obligation?
- The ongoing duty of a legal professional to keep their knowledge and skills up to date throughout their career (Correct answer)
- The duty to pass additional examinations each year
- The duty to specialise in a defined area of law
- The duty to supervise junior staff in the workplace
Correct answer: The ongoing duty of a legal professional to keep their knowledge and skills up to date throughout their career
Continuing competence requires legal professionals to maintain and develop their knowledge and skills throughout their career, ensuring they remain capable of advising clients competently. It is monitored through CPD requirements imposed by regulators.
Question 3: What is 'anti-money laundering due diligence' (AML/KYC)?
- The obligation to verify the identity of clients and understand the source of funds before and during a retainer, to prevent facilitating money laundering (Correct answer)
- The duty to report all cash transactions to the regulator
- The obligation to obtain a credit check on all clients
- The requirement to carry out background checks on all opposing parties
Correct answer: The obligation to verify the identity of clients and understand the source of funds before and during a retainer, to prevent facilitating money laundering
Anti-money laundering due diligence (also called 'know your client' or KYC) requires legal professionals to verify clients' identities, understand their business and the source of funds, and apply enhanced due diligence in higher-risk situations, under the Money Laundering Regulations 2017.
Question 4: What is a 'tipping off' offence under money laundering legislation?
- Disclosing to a client or third party that a Suspicious Activity Report has been filed or is being considered, which could prejudice an investigation (Correct answer)
- Providing advice to a client on how to avoid money laundering regulations
- Failing to file a Suspicious Activity Report when required
- Receiving instructions from a client suspected of money laundering
Correct answer: Disclosing to a client or third party that a Suspicious Activity Report has been filed or is being considered, which could prejudice an investigation
Under s.333A Proceeds of Crime Act 2002, tipping off is a criminal offence. A legal professional who knows or suspects a SAR has been made must not disclose this to the client or any other person in a way likely to prejudice any investigation.
Question 5: What is the 'Solicitors Regulation Authority' (SRA) Code of Conduct and its relevance to CILEX members?
- The SRA Code governs solicitors; CILEX members are governed by the CILEx Regulation Code, which shares similar core values but is distinct (Correct answer)
- The SRA Code governs all regulated legal professionals in England and Wales
- CILEX members must comply with both the SRA Code and CILEx Regulation rules
- The SRA Code is a model that CILEX adopts in its entirety
Correct answer: The SRA Code governs solicitors; CILEX members are governed by the CILEx Regulation Code, which shares similar core values but is distinct
The SRA Code of Conduct governs solicitors and SRA-regulated firms. CILEX members are governed by separate CILEx Regulation rules, although both share common core values (honesty, integrity, independence, and client service) derived from the Legal Services Act 2007 objectives.
Question 6: What is 'integrity' as a professional value for legal professionals?
- Acting with honesty and consistent moral principles in all professional dealings, not just when being observed (Correct answer)
- Passing all required professional examinations
- Maintaining a high standard of legal knowledge
- Following the instructions of a supervising partner in all cases
Correct answer: Acting with honesty and consistent moral principles in all professional dealings, not just when being observed
Integrity means behaving with consistent honesty and strong moral principles in all professional conduct — not deceiving clients, colleagues, courts, or regulators, and acting with propriety even when not being observed or monitored.
CILEx L3 Professional Ethics for Legal Professionals 3
What is the significance of the 'Legal Services Act 2007' for the regulation of legal professionals?