Diploma in Professional Legal Practice (DPLP) Professional Ethics, Conduct and Practice Management Flashcards

24 sample cards from the Professional Ethics, Conduct and Practice Management deck

Sampled from the end of the deck, so these are different cards from the ones shown on the syllabus page.

1. What three primary money-laundering offences are created by the Proceeds of Crime Act 2002?

   Section 327 (concealing/disguising/converting/transferring/removing criminal property); section 328 (arrangements facilitating the acquisition/retention/use/control of criminal property); and section 329 (acquisition, use or possession of criminal property).

2. What is a Suspicious Activity Report (SAR) and to whom is it made?

   A SAR is a disclosure of knowledge or suspicion of money laundering or terrorist financing, made to the National Crime Agency (NCA), usually via the firm's Money Laundering Reporting Officer (MLRO).

3. What is a 'required disclosure' and what protection does it give?

   A required disclosure under POCA is a report of suspicion that gives the discloser a defence to the principal money-laundering offences and protection from breach of confidentiality, provided it is made as soon as practicable.

4. What is an 'authorised disclosure' and the related 'appropriate consent'?

   An authorised disclosure (s338 POCA) is made before carrying out a prohibited act; obtaining 'appropriate consent' (a defence under s335) requires waiting through the 7-working-day notice period and, if refused, the 31-day moratorium period before proceeding.

5. What is the offence of 'tipping off' under POCA/Money Laundering Regulations?

   It is an offence (s333A POCA) for a person in the regulated sector to disclose to a third party that a SAR has been made, or that an investigation is contemplated or under way, where that disclosure is likely to prejudice the investigation.

6. What is the role of the Money Laundering Reporting Officer (MLRO)?

   The MLRO (nominated officer) receives internal disclosures from staff, evaluates them, and decides whether to submit a SAR to the NCA; they are the firm's central point for AML reporting.

7. What is the difference between the 'notice period' and the 'moratorium period' after an authorised disclosure?

   The notice period is 7 working days during which the NCA may refuse consent; if refused, the moratorium period of 31 calendar days follows during which the transaction must not proceed, allowing the authorities to investigate.

8. What is a financial sanctions regime and who administers it in the UK?

   Sanctions are restrictions (asset freezes, trade and travel bans) imposed for foreign-policy or security reasons; in the UK they are administered by the Office of Financial Sanctions Implementation (OFSI), part of HM Treasury.

9. What must a solicitor do before transacting where a sanctioned (designated) person may be involved?

   Screen the client and counterparties against the consolidated sanctions list; if a designated person is involved, freeze relevant assets, refrain from dealing with frozen funds, and obtain an OFSI licence before proceeding.

10. What is the consequence of breaching financial sanctions in the UK?

    Breach is a criminal offence and OFSI can also impose monetary penalties on a strict-liability basis (no need to prove knowledge), in addition to potential criminal prosecution.

11. When may a solicitor carry out 'incidental financial business' without FCA authorisation?

    Where the regulated activity arises out of, or is complementary to, the provision of professional legal services, the firm may rely on the Part 20 exemption supervised by the Law Society of Scotland under the Incidental Financial Business rules, rather than being directly FCA-authorised.

12. What is the purpose of the Solicitors (Scotland) Accounts Rules?

    They protect clients' money by requiring solicitors to keep client funds separate from the firm's own money, maintain accurate accounting records, and ensure client money is available to the client on demand.

13. What is the fundamental separation principle under the Accounts Rules?

    Client money must be held in a designated client bank account, kept entirely separate from the firm's own (office) money, and must never be used for the firm's purposes or to fund another client's matter.

14. What is the difference between 'client money' and 'office money'?

    Client money is money held or received on behalf of a client (or third party) in the course of practice; office money is the firm's own money, including fees properly billed and money to reimburse the firm for outlays already paid.

15. How quickly must client money received be paid into the client account?

    Client money must be paid into the client bank account without delay (promptly), and the accounting records must be updated to reflect the receipt.

16. What is a client account reconciliation and how often must it be carried out?

    A reconciliation compares the client ledger balances with the client bank account statement to ensure they agree; under the Accounts Rules it must be performed at least every month (and any differences investigated).

17. What is the cardinal rule about the balance on any individual client ledger?

    An individual client ledger must never show a debit balance, because that would mean the firm has used one client's money (or its own) to fund another client — a breach known as a 'shortfall' that must be made good immediately.

18. When may a firm transfer money from the client account to the office account?

    Only when the firm is properly entitled to it — i.e. to pay fees that have been billed to the client, or to reimburse outlays the firm has actually paid — and the transfer must be properly recorded.

19. What is the difference between a 'fee' and an 'outlay' (disbursement)?

    A fee is the charge for the solicitor's own professional services (profit costs); an outlay/disbursement is a payment made to a third party on the client's behalf, such as court dues, registration fees, counsel's fees or search fees.

20. What information must be given to a client about fees at the outset of a matter?

    The basis of charging must be communicated, normally in a letter of engagement / terms of business: the hourly rate or fixed fee, likely outlays, VAT, and how and when the client will be billed.

21. What are the main bases on which a solicitor's fee may be calculated?

    By time spent (hourly rate), a fixed/agreed fee, a fee based on a published table of fees (e.g. court tables), or a value-based fee taking account of factors such as complexity, urgency, skill and the amount involved.

22. What is the purpose of risk management and good file management in a legal practice?

    To prevent claims, complaints and missed deadlines by ensuring matters are properly recorded, conflicts and AML checks are done, key dates are diarised, supervision is in place, and files are clearly documented and retained.

23. What is the Master Policy and the Guarantee Fund in Scottish solicitors' practice?

    The Master Policy is the compulsory professional indemnity insurance covering claims for negligence against solicitors; the Scottish Solicitors' Guarantee Fund compensates clients who lose money through a solicitor's dishonesty.

24. What are the key duties under the equality and diversity rules and the wellbeing agenda?

    Solicitors must not unlawfully discriminate (in line with the Equality Act 2010 protected characteristics), must promote equality of opportunity and diversity within the profession, and are encouraged to maintain wellbeing and seek support, as poor mental health can impair competent, ethical practice.

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