SQE1 - Solicitors Qualifying Examination Part 1 Ethics and Professional Conduct Questions and Answers — Questions and Answers
Question 1: A solicitor is acting for a client in a high-value commercial litigation case. During a meeting, the client discloses that they intend to use the proceeds from the litigation, if successful, to fund a criminal enterprise. The solicitor is concerned about their professional obligations. Which of the following statements most accurately describes the solicitor's duty of confidentiality in this situation?
- The solicitor must immediately report their client's intention to the police, as the 'iniquity' principle overrides the duty of confidentiality.
- The solicitor must not disclose the information as the duty of confidentiality to their client is absolute and paramount in all circumstances.
- The solicitor should cease to act for the client due to the conflict but must maintain confidentiality regarding the client's stated intention.
- The solicitor is permitted, but not required, to disclose the information to the relevant authorities to prevent a future criminal act. (Correct answer)
Correct answer: The solicitor is permitted, but not required, to disclose the information to the relevant authorities to prevent a future criminal act.
A solicitor's duty of confidentiality, under paragraph 6.3 of the SRA Code of Conduct, is a fundamental professional obligation. However, it is not absolute. While information furthering a criminal purpose is not privileged, the SRA guidance indicates that disclosure to prevent a future criminal act is permitted, particularly where it may prevent serious bodily harm, but it is not a mandatory requirement in every case. Ceasing to act is also appropriate, but the key ethical issue tested is the scope of the duty of confidentiality. Making an immediate report is not necessarily the correct step without careful consideration, and the duty is certainly not absolute.
Question 2: A junior solicitor in a firm becomes aware that a partner is systematically and deliberately overcharging a major client by falsifying time-recording entries. The junior solicitor is concerned about their duty to report the matter. According to the SRA Code of Conduct, to whom should the junior solicitor report the serious breach?
- Directly to the client who is being overcharged.
- To the firm's Compliance Officer for Legal Practice (COLP). (Correct answer)
- To the Law Society for guidance on how to proceed.
- Only to the Solicitors Disciplinary Tribunal (SDT) once they have gathered irrefutable evidence.
Correct answer: To the firm's Compliance Officer for Legal Practice (COLP).
The SRA Code of Conduct for Solicitors (paragraph 7.7) requires solicitors to report promptly to the SRA or another approved regulator any facts or matters that they reasonably believe constitute a serious breach of regulatory arrangements by any person. Paragraph 7.8 clarifies that this obligation is satisfied if the report is made to the firm's COLP. The COLP then has responsibility for reporting to the SRA. Reporting directly to the client could breach other duties, the Law Society is a representative body not the regulator, and the SDT is a tribunal, not the initial reporting body.
Question 3: A solicitor gives a personal, oral undertaking to another solicitor over the telephone to 'pay their client's costs of £5,000 within 14 days'. The solicitor made the undertaking without first securing the funds from their own client. The 14 days have now passed, and the client has not provided the funds. What is the legal and professional status of the undertaking?
- The undertaking is unenforceable because it was not given in writing.
- The undertaking is not binding on the solicitor personally, only on their firm.
- The undertaking is personally binding on the solicitor, who must perform it from their own funds if necessary. (Correct answer)
- The undertaking is conditional on the solicitor receiving the funds from their client and is therefore currently suspended.
Correct answer: The undertaking is personally binding on the solicitor, who must perform it from their own funds if necessary.
Under paragraph 1.3 of the SRA Code of Conduct, solicitors must perform all undertakings given by them. An undertaking can be given orally or in writing and is personally binding on the solicitor who gives it. It is not conditional on receiving funds from a client unless explicitly stated as such. Therefore, the solicitor is personally liable to pay the £5,000, even if it has to come from their own resources. Failure to do so is professional misconduct.
Question 4: A solicitor is instructed by a new client to handle the purchase of a residential property. The client is providing the funds from a recent inheritance. The solicitor has concerns that the client appears frail and does not fully understand the transaction, and the client's adult child is present at all meetings and answers most questions on their behalf. Which SRA Principle is most directly engaged by the solicitor's need to ensure they are acting on valid instructions?
- Principle 2: Act in a way that upholds public trust and confidence.
- Principle 4: Act with honesty.
- Principle 5: Act with integrity.
- Principle 7: Act in the best interests of each client. (Correct answer)
Correct answer: Principle 7: Act in the best interests of each client.
Principle 7 requires a solicitor to act in the best interests of each client. This includes satisfying themselves that the client has the capacity to give instructions and that the instructions are their own, free from undue influence. While the other principles are important, the immediate ethical challenge is ensuring the actions taken are genuinely for the client's benefit and reflect their true wishes, which is the core of acting in their best interests. The SRA has issued specific guidance on accepting instructions from vulnerable clients which relates directly to this principle.
Question 5: The Solicitors Disciplinary Tribunal (SDT) is hearing a case brought by the SRA against a solicitor accused of professional misconduct. What is the standard of proof that the SRA must meet for the SDT to find the allegations proven?
- Beyond all reasonable doubt.
- On the balance of probabilities. (Correct answer)
- Clear and convincing evidence.
- Sufficient to satisfy a reasonably prudent solicitor.
Correct answer: On the balance of probabilities.
Following the implementation of the Solicitors (Disciplinary Proceedings) Rules 2019, the standard of proof applied in the SDT is the civil standard, which is 'on the balance of probabilities'. This means the tribunal must be satisfied that it is more likely than not that the alleged misconduct occurred. This replaced the previous criminal standard of 'beyond all reasonable doubt'.
Question 6: A law firm is instructed by both the buyer and the lender in a standard residential mortgage transaction. The lender's instructions state that the property must have been built at least 10 years ago. The solicitor discovers from the property searches that the house was completed only 8 years ago. Which of the following statements best describes the solicitor's position?
- The solicitor must inform the buyer but maintain confidentiality towards the lender.
- The solicitor must inform the lender but maintain confidentiality towards the buyer.
- The solicitor must cease to act for both the buyer and the lender due to a conflict of interest. (Correct answer)
- The solicitor can continue to act for both parties after obtaining written consent from each of them.
Correct answer: The solicitor must cease to act for both the buyer and the lender due to a conflict of interest.
A conflict of interest has arisen because the solicitor has a duty to disclose the property's age to the lender (as it is material to their instructions) and also a duty of confidentiality to the buyer regarding their transaction. These duties are in direct conflict. Under paragraph 6.2 of the SRA Code of Conduct, a solicitor cannot act where there is a client conflict, or a significant risk of one. The limited exceptions where a solicitor can act for two or more clients are not applicable here because the clients' interests on this material point are not aligned. Therefore, the solicitor must cease acting for both parties to avoid breaching their duties.
