LPC NOTES
[BUSINESS LAW AND PRACTICE COMPANY FLOW CHART]
(2019-2020)
, BUSINESS LAW AND PRACTICE COMPANY FLOW CHART
BLP COMPANY FLOW CHART
a. Professional conduct – can we act for client?
i. Principles
1. uphold the rule of law and the proper administration of justice;
2. act with integrity;
3. not allow your independence to be compromised;
4. act in the best interests of each client;
5. provide a proper standard of service to your clients
6. behave in a way that maintains the trust the public places in you and in the provision of legal
services;
7. comply with your legal and regulatory obligations and deal with your regulators and ombudsmen
in an open, timely and co-operative manner;
8. run your business or carry out your role in the business effectively and in accordance with proper
governance and sound financial and risk management principles;
9. run your business or carry out your role in the business in a way that encourages equality of
opportunity and respect for diversity; and
10. protect client money and assets.
ii. If solicitor conducts proceedings without authority, he will be personally liable for the costs
incurred – Warner v Masefield 2008
iii. if a solicitor receives instructions from someone other than the client, or by only one client on
behalf of others in a joint matter, the solicitor should not proceed without checking that all
clients agree with the instructions given.
iv. Conflict of interest
Support principle 4 - O 3.5 – You do not act if there is a client conflict or a significant risk of a
client conflict unless the circumstances set out in O3.6 and 3.7 apply.
Define conflict of interest – any situation where:
you owe separate duties to act in the best interests of two or more clients in relation to the same
or related matters, and those duties conflict, or there is a significant risk that those duties may
conflict (a "client conflict"); or
your duty to act in the best interests of any client in relation to a matter conflicts, or there is a
significant risk that it may conflict, with your own interests in relation to that or a related
matter (an "own interest conflict").
Define client conflict - any situation where you owe separate duties to act in the best interests of
two or more clients in relation to the same or related matters, and those duties conflict, or there is a
significant risk that those duties may conflict.
O3.6 - where there is a client conflict and the clients have a substantially common interest in relation
to a matter or a particular aspect of it, you only act if:
a. you have explained the relevant issues and risks to the clients and you have a reasonable
belief that they understand those issues and risks;
b. all the clients have given informed consent in writing to you acting;
c. you are satisfied that it is reasonable for you to act for all the clients and that it is in their best
interests; and
d. you are satisfied that the benefits to the clients of you doing so outweigh the risks.
, Define substantially common interest - a situation where there is a clear common purpose in
relation to any matter or a particular aspect of it between the clientsand a strong consensus on how it
is to be achieved and the client conflict is peripheral to this common purpose.
O3.7 - where there is a client conflict and the clients are competing for the same objective, you only
act if:
a. you have explained the relevant issues and risks to the clients and you have a reasonable
belief that they understand those issues and risks;
b. the clients have confirmed in writing that they want you to act, in the knowledge that you
act, or may act, for one or more other clients who are competing for the same objective;
c. there is no other client conflict in relation to that matter;
d. unless the clients specifically agree, no individual acts for, or is responsible for the
supervision of work done for, more than one of the clients in that matter; and
e. you are satisfied that it is reasonable for you to act for all the clients and that the benefits to
the clients of you doing so outweigh the risks.
Define competing for the same objective - any situation in which two or more clients are
competing for an "objective" which, if attained by one client, will make that "objective" unattainable
to the other client or clients, and "objective" means, for the purposes of Chapter 3, an asset, contract
or business opportunity which two or more clients are seeking to acquire or recover through a
liquidation (or some other form of insolvency process) or by means of an auction or tender process
or a bid or offer which is not public.
v. Duty of confidentiality
O4.1 - you keep the affairs of clients confidential unless disclosure is required or permitted by law
or the client consents;
Define client - means:
the person for whom you act and, where the context permits, includes prospective and former
clients;
in Parts 1-6 of the SRA Accounts Rules, the person for whom you act; and
in the SRA Financial Services (Scope) Rules, in relation to any regulated activitiescarried on by
a firm for a trust or the estate of a deceased person (including a controlled trust), the trustees or
personal representatives in their capacity as such and not any person who is a beneficiary under
the trust or interested in the estate.
O4.2 - any individual who is advising a client makes that client aware of all information material to
that retainer of which the individual has personal knowledge
O4.3 - you ensure that where your duty of confidentiality to one client comes into conflict with your
duty of disclosure to another client, your duty of confidentiality takes precedence;
O4.4 - you do not act for A in a matter where A has an interest adverse to B, and B is a client for
whom you hold confidential information which is material to A in that matter, unless the confidential
information can be protected by the use of safeguards, and:
a. you reasonably believe that A is aware of, and understands, the relevant issues and gives
informed consent;
b. either:
i. B gives informed consent and you agree with B the safeguards to protect B's information; or
ii. where this is not possible, you put in place effective safeguards including information
barriers which comply with the common law; and
c. it is reasonable in all the circumstances to act for A with such safeguards in place.
vi. Money laundering
The Money Laundering Regulations 2007 place obligations on ‘relevant persons’ – defined
in reg 3:
, A firm or sole practitioner who by way of business provides legal or notarial services to other
persons, when participating in financial or real property transactions.
Reg 20 - A firm must have internal procedures in place for the identification and reporting
of money laundering.
reg 20(2)(d)(i) - firms appoint person to act as a ‘nominated officer’- ‘Money Laundering
Reporting Officer’ (MLRO).
Reg 7 - firms obliged to obtain verification of the identity of each of their clients.
Reg 9 - The verification must take place before a business relationship is established and
before an occasional transaction can be carried out.
may verify the identity during the establishment of a business relationship if:
i. (a) there is little risk of any money laundering or terrorist financing occurring;
ii. (b) it is necessary not to interrupt the normal course of business; and
iii. (c) the identity is verified as soon as possible.
However, the solicitor cannot:
i. (a) carry out a transaction with or for the client through a bank account; or
ii. (b) allow funds or property to be transferred or final deals signed until verification
is complete.
Reg 13 – simplified due diligence - companies listed on a regulated EEA market subject to
specified disclosure obligations or a public authority within the United Kingdom.
Reg 5 – standard due diligence - obliged to verify client identity using ‘documentation,
data or information obtained from a reliable and independent source’.
Reg 14 – enhanced due diligence – applies where:
(a) the solicitor has not met the client face to face;
(b) higher risk factors in relation to money laundering or terrorist financing; or
(c) the client is a Politically Exposed Person (PEP).
Reg 21 – training
Reg 19 – record keeping
Proceeds of Crime Act 2002 - offence to become involved in money laundering.
S 328 – arranging – 14 yrs – requires knowledge
S 330 – failure to disclose – 5 years – objective test
S 33A – tipping off – 2 years
vii. Duty as an officer of the court
O5.1 - solicitor must never deceive, or knowingly or recklessly mislead, the court.
IB 5.7, this includes not drafting a statement of case that contains either:
(a) any contention which the solicitor does not consider to be properly arguable; or
(b) any allegation of fraud, unless the solicitor is instructed to do so and he has
material which he reasonably believes establishes, on the face of it, a case of fraud.
If client completes the statement of case with a material error the solicitor should advise
the client to amend the statement of case.
If the client refuses to do so, the solicitor should cease to act for the client.
Outcome 4 - the solicitor should not inform the court or any other party of the reasons for
ceasing to act.
viii. Can you give advice without authorisation of FMSA?
Talk about conduct points first
SRA principle 4 and 5 – best interest and proper standard of service
[BUSINESS LAW AND PRACTICE COMPANY FLOW CHART]
(2019-2020)
, BUSINESS LAW AND PRACTICE COMPANY FLOW CHART
BLP COMPANY FLOW CHART
a. Professional conduct – can we act for client?
i. Principles
1. uphold the rule of law and the proper administration of justice;
2. act with integrity;
3. not allow your independence to be compromised;
4. act in the best interests of each client;
5. provide a proper standard of service to your clients
6. behave in a way that maintains the trust the public places in you and in the provision of legal
services;
7. comply with your legal and regulatory obligations and deal with your regulators and ombudsmen
in an open, timely and co-operative manner;
8. run your business or carry out your role in the business effectively and in accordance with proper
governance and sound financial and risk management principles;
9. run your business or carry out your role in the business in a way that encourages equality of
opportunity and respect for diversity; and
10. protect client money and assets.
ii. If solicitor conducts proceedings without authority, he will be personally liable for the costs
incurred – Warner v Masefield 2008
iii. if a solicitor receives instructions from someone other than the client, or by only one client on
behalf of others in a joint matter, the solicitor should not proceed without checking that all
clients agree with the instructions given.
iv. Conflict of interest
Support principle 4 - O 3.5 – You do not act if there is a client conflict or a significant risk of a
client conflict unless the circumstances set out in O3.6 and 3.7 apply.
Define conflict of interest – any situation where:
you owe separate duties to act in the best interests of two or more clients in relation to the same
or related matters, and those duties conflict, or there is a significant risk that those duties may
conflict (a "client conflict"); or
your duty to act in the best interests of any client in relation to a matter conflicts, or there is a
significant risk that it may conflict, with your own interests in relation to that or a related
matter (an "own interest conflict").
Define client conflict - any situation where you owe separate duties to act in the best interests of
two or more clients in relation to the same or related matters, and those duties conflict, or there is a
significant risk that those duties may conflict.
O3.6 - where there is a client conflict and the clients have a substantially common interest in relation
to a matter or a particular aspect of it, you only act if:
a. you have explained the relevant issues and risks to the clients and you have a reasonable
belief that they understand those issues and risks;
b. all the clients have given informed consent in writing to you acting;
c. you are satisfied that it is reasonable for you to act for all the clients and that it is in their best
interests; and
d. you are satisfied that the benefits to the clients of you doing so outweigh the risks.
, Define substantially common interest - a situation where there is a clear common purpose in
relation to any matter or a particular aspect of it between the clientsand a strong consensus on how it
is to be achieved and the client conflict is peripheral to this common purpose.
O3.7 - where there is a client conflict and the clients are competing for the same objective, you only
act if:
a. you have explained the relevant issues and risks to the clients and you have a reasonable
belief that they understand those issues and risks;
b. the clients have confirmed in writing that they want you to act, in the knowledge that you
act, or may act, for one or more other clients who are competing for the same objective;
c. there is no other client conflict in relation to that matter;
d. unless the clients specifically agree, no individual acts for, or is responsible for the
supervision of work done for, more than one of the clients in that matter; and
e. you are satisfied that it is reasonable for you to act for all the clients and that the benefits to
the clients of you doing so outweigh the risks.
Define competing for the same objective - any situation in which two or more clients are
competing for an "objective" which, if attained by one client, will make that "objective" unattainable
to the other client or clients, and "objective" means, for the purposes of Chapter 3, an asset, contract
or business opportunity which two or more clients are seeking to acquire or recover through a
liquidation (or some other form of insolvency process) or by means of an auction or tender process
or a bid or offer which is not public.
v. Duty of confidentiality
O4.1 - you keep the affairs of clients confidential unless disclosure is required or permitted by law
or the client consents;
Define client - means:
the person for whom you act and, where the context permits, includes prospective and former
clients;
in Parts 1-6 of the SRA Accounts Rules, the person for whom you act; and
in the SRA Financial Services (Scope) Rules, in relation to any regulated activitiescarried on by
a firm for a trust or the estate of a deceased person (including a controlled trust), the trustees or
personal representatives in their capacity as such and not any person who is a beneficiary under
the trust or interested in the estate.
O4.2 - any individual who is advising a client makes that client aware of all information material to
that retainer of which the individual has personal knowledge
O4.3 - you ensure that where your duty of confidentiality to one client comes into conflict with your
duty of disclosure to another client, your duty of confidentiality takes precedence;
O4.4 - you do not act for A in a matter where A has an interest adverse to B, and B is a client for
whom you hold confidential information which is material to A in that matter, unless the confidential
information can be protected by the use of safeguards, and:
a. you reasonably believe that A is aware of, and understands, the relevant issues and gives
informed consent;
b. either:
i. B gives informed consent and you agree with B the safeguards to protect B's information; or
ii. where this is not possible, you put in place effective safeguards including information
barriers which comply with the common law; and
c. it is reasonable in all the circumstances to act for A with such safeguards in place.
vi. Money laundering
The Money Laundering Regulations 2007 place obligations on ‘relevant persons’ – defined
in reg 3:
, A firm or sole practitioner who by way of business provides legal or notarial services to other
persons, when participating in financial or real property transactions.
Reg 20 - A firm must have internal procedures in place for the identification and reporting
of money laundering.
reg 20(2)(d)(i) - firms appoint person to act as a ‘nominated officer’- ‘Money Laundering
Reporting Officer’ (MLRO).
Reg 7 - firms obliged to obtain verification of the identity of each of their clients.
Reg 9 - The verification must take place before a business relationship is established and
before an occasional transaction can be carried out.
may verify the identity during the establishment of a business relationship if:
i. (a) there is little risk of any money laundering or terrorist financing occurring;
ii. (b) it is necessary not to interrupt the normal course of business; and
iii. (c) the identity is verified as soon as possible.
However, the solicitor cannot:
i. (a) carry out a transaction with or for the client through a bank account; or
ii. (b) allow funds or property to be transferred or final deals signed until verification
is complete.
Reg 13 – simplified due diligence - companies listed on a regulated EEA market subject to
specified disclosure obligations or a public authority within the United Kingdom.
Reg 5 – standard due diligence - obliged to verify client identity using ‘documentation,
data or information obtained from a reliable and independent source’.
Reg 14 – enhanced due diligence – applies where:
(a) the solicitor has not met the client face to face;
(b) higher risk factors in relation to money laundering or terrorist financing; or
(c) the client is a Politically Exposed Person (PEP).
Reg 21 – training
Reg 19 – record keeping
Proceeds of Crime Act 2002 - offence to become involved in money laundering.
S 328 – arranging – 14 yrs – requires knowledge
S 330 – failure to disclose – 5 years – objective test
S 33A – tipping off – 2 years
vii. Duty as an officer of the court
O5.1 - solicitor must never deceive, or knowingly or recklessly mislead, the court.
IB 5.7, this includes not drafting a statement of case that contains either:
(a) any contention which the solicitor does not consider to be properly arguable; or
(b) any allegation of fraud, unless the solicitor is instructed to do so and he has
material which he reasonably believes establishes, on the face of it, a case of fraud.
If client completes the statement of case with a material error the solicitor should advise
the client to amend the statement of case.
If the client refuses to do so, the solicitor should cease to act for the client.
Outcome 4 - the solicitor should not inform the court or any other party of the reasons for
ceasing to act.
viii. Can you give advice without authorisation of FMSA?
Talk about conduct points first
SRA principle 4 and 5 – best interest and proper standard of service
