SQE1 Legal Services 2 — Questions and Answers
Question 1: Under the SRA Code of Conduct, what must a solicitor do if they identify a conflict of interest between two clients?
- Continue to act for both clients with their consent
- Act for the client who is paying higher fees
- Not act for both clients unless a specific exception applies and both clients give informed consent (Correct answer)
- Refer both clients to the court for a decision
Correct answer: Not act for both clients unless a specific exception applies and both clients give informed consent
The SRA Code of Conduct requires solicitors not to act where there is a conflict of interest between clients, unless a specific exception applies (such as the substantially common interest exception or competing for the same objective) and both clients give informed written consent.
Question 2: What is a conditional fee agreement (CFA) commonly known as, and how does it work?
- A fixed fee arrangement where the solicitor charges a set amount regardless of outcome
- A 'no win, no fee' arrangement where the solicitor charges a success fee if the case is won (Correct answer)
- A legal aid arrangement funded by the government
- An hourly rate arrangement with a cap on total fees
Correct answer: A 'no win, no fee' arrangement where the solicitor charges a success fee if the case is won
A conditional fee agreement (CFA) is commonly known as a 'no win, no fee' agreement. Under a CFA, the solicitor agrees not to charge fees if the case is lost, but may charge a success fee (capped at 100% of the base costs) if the case is won.
Question 3: What is the role of the Legal Ombudsman in the UK legal services framework?
- To prosecute solicitors for criminal conduct
- To investigate and resolve complaints about the service provided by lawyers (Correct answer)
- To set the training requirements for solicitors
- To approve new law firms for practice
Correct answer: To investigate and resolve complaints about the service provided by lawyers
The Legal Ombudsman investigates and resolves complaints from consumers about the service they have received from regulated legal service providers. It focuses on service complaints rather than conduct issues, which are handled by the relevant regulator.
Question 4: Under anti-money laundering regulations, what are the three key obligations on solicitors?
- Client identification, record keeping, and fee disclosure
- Customer due diligence, suspicious activity reporting, and maintaining appropriate policies and controls (Correct answer)
- Legal advice privilege, confidentiality, and conflict checks
- Registration with HMRC, annual audits, and staff training only
Correct answer: Customer due diligence, suspicious activity reporting, and maintaining appropriate policies and controls
Under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, solicitors must conduct customer due diligence (CDD), report suspicious activity to the NCA, and maintain appropriate internal policies, controls, and procedures.
Question 5: What is the SRA's power to intervene in a law firm?
- The SRA can only issue fines up to £500
- The SRA can intervene to close a firm, take control of client files, and redirect client money to protect the public (Correct answer)
- The SRA can only issue written warnings
- The SRA can only refer matters to the police
Correct answer: The SRA can intervene to close a firm, take control of client files, and redirect client money to protect the public
The SRA has extensive intervention powers including the ability to close a firm, freeze client accounts, take possession of documents and files, and redirect clients' matters to other firms. These powers are used to protect clients and the public interest.
Question 6: A solicitor acting as an advocate in court has a duty to:
- Win the case at all costs for their client
- Not mislead the court and disclose adverse authorities of which they are aware (Correct answer)
- Only present evidence favourable to their client
- Object to all prosecution evidence regardless of its validity
Correct answer: Not mislead the court and disclose adverse authorities of which they are aware
A solicitor-advocate owes a paramount duty not to mislead the court. This includes an obligation to draw the court's attention to relevant legal authorities, even if they are adverse to their client's case. The duty to the court overrides the duty to the client.
SQE1 Legal Services 2
Under the SRA Code of Conduct, what must a solicitor do if they identify a conflict of interest between two clients?