Law Society of Scotland Professional Education and Training (PEAT) PEAT 1: Professionalism, Ethics and Professional Standards Flashcards

24 sample cards from the PEAT 1: Professionalism, Ethics and Professional Standards deck

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

1. Who is a 'vulnerable client' and what extra care is required?

   A client whose circumstances (age, illness, disability, distress) may affect their ability to make decisions; the solicitor must take extra care to ensure understanding, free choice, and appropriate support.

2. How should a solicitor assess a client's legal capacity to give instructions?

   By assessing whether the client can understand, retain, and weigh the relevant information and communicate a decision; if capacity is doubtful the solicitor may seek a medical/professional opinion or involve an attorney/guardian.

3. Whose instructions does a solicitor act on where a client lacks capacity but has a welfare/financial guardian or attorney?

   The solicitor takes instructions from the duly appointed attorney or guardian acting within their powers under the Adults with Incapacity (Scotland) Act 2000.

4. What must a firm have in place to deal with client complaints at firm level?

   A written complaints procedure, a designated client relations partner/manager, and a process to investigate and respond to complaints before they escalate to the SLCC.

5. What is the time limit for a client to bring a complaint to the SLCC after a firm has dealt with it?

   Generally the SLCC requires complaints to be made within a prescribed period (broadly 3 years from when the issue arose, with allowance for when the complainer became aware).

6. What is the legislative basis of the UK anti-money laundering (AML) regime applicable to Scottish solicitors?

   The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, alongside the Proceeds of Crime Act 2002 and the Terrorism Act 2000.

7. What are the three principal money laundering offences under the Proceeds of Crime Act 2002?

   Concealing/disguising/transferring criminal property (s.327), arrangements facilitating acquisition or use of criminal property (s.328), and acquisition/use/possession of criminal property (s.329).

8. What does 'Customer Due Diligence' (CDD) require?

   Identifying and verifying the client's identity from reliable independent sources, identifying any beneficial owner, and obtaining information on the purpose and intended nature of the business relationship.

9. When must 'Enhanced Due Diligence' (EDD) be applied?

   In higher-risk situations, e.g. dealing with a Politically Exposed Person (PEP), high-risk third countries, or where the transaction is complex, unusually large, or lacks an apparent economic purpose.

10. What is Simplified Due Diligence (SDD) and when is it permitted?

    A reduced level of CDD permitted where the risk of money laundering is assessed as low, such as certain regulated or listed entities; the firm must still monitor the relationship.

11. What is a firm-wide risk assessment under the 2017 Regulations?

    A documented assessment of the money laundering and terrorist financing risks the firm faces, considering clients, geography, products/services, transactions, and delivery channels, used to design proportionate controls.

12. Who is the MLRO and what is their role?

    The Money Laundering Reporting Officer is the nominated officer who receives internal suspicion reports, decides whether to make a Suspicious Activity Report to the NCA, and oversees AML compliance.

13. To whom is a Suspicious Activity Report (SAR) submitted in the UK?

    To the National Crime Agency (NCA).

14. What is a 'Defence Against Money Laundering' (DAML / consent SAR)?

    A SAR seeking the NCA's consent to proceed with a transaction that might otherwise be a prohibited act; proceeding without consent during the notice period can constitute an offence.

15. What is the 'tipping off' offence?

    Disclosing to the client or a third party that a SAR has been made or that a money laundering investigation is being or may be carried out, where this is likely to prejudice the investigation (POCA s.333A).

16. What are 'financial sanctions' and who maintains the UK regime?

    Restrictions (e.g. asset freezes, prohibitions on dealing with funds) imposed against designated persons/entities; the UK regime is administered by the Office of Financial Sanctions Implementation (OFSI).

17. What must a solicitor do before acting where a party may be a sanctioned (designated) person?

    Screen the client/parties against the consolidated sanctions list, refrain from dealing with frozen funds, and report to OFSI; a licence may be required to undertake otherwise prohibited dealings.

18. What is the purpose of the Accounts Rules framework for Scottish solicitors?

    To protect client money by requiring it to be kept separate from the firm's own money and properly accounted for; set out in the Accounts, Accounts Certificate, Professional Practice and Guarantee Fund Rules (Rule B6).

19. What is the fundamental rule about client money under the Accounts Rules?

    Client money must be held in a designated client account, kept separate from the firm's funds, and only used for the purpose for which it was provided.

20. What is the duty to reconcile client accounts and how often must it be done?

    The solicitor must regularly reconcile the client account balances with bank records and the client ledger; reconciliations are required at intervals not exceeding the period prescribed by the rules (no more than every 5 weeks).

21. What is an Accounts Certificate and how often must it be delivered to the Law Society?

    A periodic certificate confirming compliance with the Accounts Rules, signed off after checking the firm's books; it must be delivered to the Law Society at the intervals prescribed (typically every six months).

22. What powers does the Law Society have to inspect a firm's accounts?

    The Law Society may carry out inspections of a firm's books and records, with or without notice, through its inspectors to verify compliance with the Accounts Rules.

23. What is professional indemnity insurance and how do Scottish solicitors obtain it?

    Compulsory insurance covering claims for professional negligence; in Scotland it is provided collectively through the Law Society's Master Policy, which all practice units in private practice must hold.

24. Distinguish the Master Policy from the Guarantee Fund.

    The Master Policy is professional indemnity insurance covering negligence/civil claims against solicitors, while the Scottish Solicitors' Guarantee Fund compensates clients for losses caused by a solicitor's dishonesty.

What this deck covers

PEAT 1: Professionalism, Ethics and Professional Standards flashcards FAQ