SQE1 Legal Services

Legal Services · Reserved legal activities

Estate Easy Ltd is a business run by non-lawyers. It is not authorised or regulated by any legal services regulator. It offers the following services to the public for a fee. Which of these is a reserved legal activity under the Legal Services Act 2007, so that an unauthorised person who carries it on commits an offence?

1. Drafting a will for a client and advising on the formalities for signing it.
2. Preparing a lasting power of attorney for a client who wants to appoint their son.
3. Preparing the papers on which a grant of probate is sought for an executor.
4. Advising a client on how to reduce a future inheritance tax bill.
5. Drafting a 12-month assured shorthold tenancy agreement, signed by hand and not as a deed.

Show answer and explanation

Answer: C. Section 12(1) Legal Services Act 2007 lists the reserved legal activities: the exercise of a right of audience, the conduct of litigation, reserved instrument activities, probate activities, notarial activities, and the administration of oaths. Probate activities include preparing probate papers on which a grant of probate or letters of administration is sought (Sch 2, para 6). It is an offence for a person to carry on a reserved activity unless authorised or exempt (s 14). Will writing is not reserved, which is why unregulated will writers exist. The tempting answer is the will. Many candidates assume that any document with legal effect is reserved, but the Act limits the list.

Legal Services Act 2007, s 12; Legal Services Act 2007, Sch 2; Legal Services Act 2007, s 14

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Legal Services · Legal Ombudsman

Beatrice instructed a solicitors' firm to handle the sale of her late mother's house. She complained to the firm in writing about delay and the level of the bill. Nine weeks later, she has received no final response. She is unhappy and wants to know where she can go next. Which statement is correct?

1. She must first apply to the SRA, which will decide whether the Legal Ombudsman can accept the case.
2. She must wait at least six months from her complaint before she can approach the Legal Ombudsman.
3. She can refer the complaint, and the Legal Ombudsman can strike the solicitor off the roll.
4. She can only sue the firm in court, because the Legal Ombudsman handles complaints about barristers only.
5. She can refer the complaint to the Legal Ombudsman, which can order the firm to pay compensation of up to £50,000.

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Answer: E. The Legal Ombudsman (LeO) deals with complaints about service from clients of authorised legal providers, including solicitors. A client must normally complain to the firm first. If the firm has not given a final response within eight weeks, or the client is unhappy with the response, the client may refer the complaint to LeO, within its time limits. Under s 137 Legal Services Act 2007 and the scheme rules, LeO can order apologies, corrective work, a reduction of fees and compensation up to £50,000. LeO deals with service, while the SRA deals with misconduct. The tempting answer is to go to the SRA first. That is not required and the SRA cannot award compensation.

Legal Services Act 2007, Pt 6; Legal Services Act 2007, s 137

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Legal Services · SRA Principles: priority

You are an associate. Your client, a developer, asks you to withhold from the court a document in the client's possession that clearly weakens its case on a pending application. The client says that Principle 7, acting in the client's best interests, requires you to do what it wants. You think there may be a conflict between Principle 7 and the other Principles. How do the SRA Principles 2019 deal with a conflict of this kind?

1. Principle 7 takes precedence, because the client's instructions are paramount in all circumstances.
2. All the Principles carry equal weight, so you may choose whichever you prefer.
3. Principle 7 prevails unless the client has given informed consent in writing to the breach.
4. Principles that protect the wider public interest, such as upholding the rule of law, take precedence over an individual client's interests.
5. The Principles apply only to private conduct, and the Code of Conduct governs work for clients.

Show answer and explanation

Answer: D. The SRA Principles 2019 apply to all solicitors. Principle 1 requires you to act in a way that upholds the constitutional principle of the rule of law and the proper administration of justice. Principle 2 covers public trust, and Principle 7 covers each client's best interests. The introduction states that, if there is a conflict, the Principles that safeguard the wider public interest, such as the rule of law and public confidence in the profession, take precedence over an individual client's interests. Withholding a document that you know weakens the client's case in a way that misleads the court would also breach para 1.4 of the Code. The tempting answer is that the client always comes first. That rule is limited by the Principles.

SRA Principles 2019, Principle 1; SRA Principles 2019, Principle 7; SRA Code of Conduct for Solicitors, para 1.4

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Legal Services · SRA Principles: conduct outside practice

Dev is a solicitor in private practice. In his own time, he applies to rent a flat. He lies on the application form, stating a salary far higher than his real earnings and giving a false reference from a friend. The landlord discovers this, but does not report it. A colleague learns of it and tells the managing partner. Dev says that this is a private matter with no connection to his clients. Can the SRA take regulatory action against him?

1. No, because the Principles apply only to work done for clients and not to personal conduct.
2. Yes, because dishonest conduct in private life can breach Principles 2, 4 and 5 and harm public trust in the profession.
3. No, unless the landlord first makes a formal complaint to the SRA.
4. Yes, but only if Dev has first been convicted of fraud in a criminal court.
5. No, because only breaches of the Code of Conduct, not the Principles, can lead to action.

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Answer: B. The SRA Principles 2019 apply to a solicitor's conduct in connection with practice and can also be engaged by behaviour in private life that undermines public trust. Principle 2 requires you to act in a way that upholds public trust and confidence in the solicitors' profession, Principle 4 requires honesty and Principle 5 integrity. Lying on a rental application is dishonest. In SRA v Wingate, the Court of Appeal held that integrity involves moral soundness and adherence to ethical standards. The SRA does not need a client complaint or a conviction. The tempting answer is that private matters are outside regulation. Serious dishonesty is likely to matter whatever its context.

SRA Principles 2019, Principle 2; SRA Principles 2019, Principle 4; SRA Principles 2019, Principle 5; SRA v Wingate [2018] EWCA Civ 366

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Legal Services · Professional conduct: reporting serious misconduct

Kiran is an associate at a firm. She sees her supervising partner, Neil, transfer £15,000 from a client's account to the firm's office account without any bill or client authority. When she asks, Neil says he will sort it out next month. Kiran believes the transfer is improper. She has not discussed it with anyone else. What does the SRA Code of Conduct for Solicitors require of Kiran?

1. To report the facts promptly to the SRA, which she may do through the firm's COLP or COFA, as they may be a serious breach.
2. To wait until the end of the month to see whether Neil puts the money back.
3. To raise it only with Neil and take no further step, as he is her supervisor.
4. To report only if the client complains about the transfer.
5. To say nothing, because her duty of confidentiality to the firm prevents any report.

Show answer and explanation

Answer: A. Para 7.7 of the SRA Code of Conduct for Solicitors requires you to report promptly to the SRA any facts or matters you reasonably believe are capable of amounting to a serious breach of the regulatory arrangements by any person regulated by the SRA. An unauthorised transfer of client money to the office account is a likely serious breach of the SRA Accounts Rules. Under para 7.12, the duty is satisfied if Kiran gives the information to the firm's COLP or COFA on the understanding that they will report it. Para 7.9 protects her from detrimental treatment for reporting. The tempting answer is to speak to Neil and wait. Neil is the person involved, and waiting fails the "promptly" requirement.

SRA Code of Conduct for Solicitors, para 7.7; SRA Code of Conduct for Solicitors, para 7.12; SRA Accounts Rules, rule 5.1

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Legal Services · Professional conduct: errors and claims

You are a solicitor acting for Ola in a personal injury claim. You realise that you diarised the limitation date wrongly and the claim form was issued two days after limitation expired. The defendant has not yet raised the point. You think there may be grounds to ask the court to disapply the limitation period, but success is uncertain. You are worried about the firm's reputation. What should you do about telling Ola?

1. Wait until the defendant raises limitation, in case the problem never appears.
2. Tell Ola only if the court refuses to disapply the limitation period.
3. Tell Ola promptly that an error may give rise to a claim against the firm, and say she may wish to take independent advice.
4. Say nothing to Ola but report the error to the firm's insurers.
5. Offer Ola a discount on her fees and ask her to agree not to complain.

Show answer and explanation

Answer: C. Para 7.11 of the SRA Code of Conduct for Solicitors requires you to be honest and open with clients if things go wrong, and to explain fully and promptly what has happened and the likely impact. Issuing after the limitation date is such an error, and it could give rise to a claim by Ola against the firm. Principle 7 requires you to act in Ola's best interests, and para 1.4 prevents you from misleading her by silence. The firm now has an interest of its own in the outcome, so there is a potential own-interest conflict (para 6.1). Ola should be told that she may wish to take independent advice. You must also follow the firm's procedure, including telling the COLP and the insurers. The tempting answer is to wait for the defendant. The Code requires prompt openness.

SRA Code of Conduct for Solicitors, para 7.11; SRA Code of Conduct for Solicitors, para 6.1; SRA Principles 2019, Principle 7

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Legal Services · Client care: cost information

At the start of a commercial lease sale, your firm gave the client an estimate of £3,000 plus VAT. Three months later, the buyer's solicitors have raised complicated title issues, and you now expect the final bill to be about £5,500 plus VAT. The engagement letter says that estimates are not binding. The client has not been told about the likely increase. What does the SRA Code of Conduct for Solicitors require?

1. You must tell the client promptly of the likely revised cost and the reasons, so that the client can decide how to proceed.
2. You need take no action, because the engagement letter says estimates are not binding.
3. You may wait until the final bill, as the client has already agreed to pay reasonable fees.
4. You must absorb the extra cost, as the client cannot be asked to pay more than the estimate.
5. You must stop work until the client signs a new engagement letter.

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Answer: A. Para 8.7 of the SRA Code of Conduct for Solicitors says that clients must receive the best possible information about how their matter will be priced and, both at the time of engagement and when appropriate as their matter progresses, about the likely overall cost. Where the likely cost rises well above the estimate, the client should be told promptly, with reasons, so that the client can decide whether to continue or to change the scope. Para 8.6 also requires that clients can make informed decisions about their matter. A wording that estimates are not binding does not remove this duty. The tempting answer relies on the clause. A contract term does not cancel a regulatory obligation.

SRA Code of Conduct for Solicitors, para 8.7; SRA Code of Conduct for Solicitors, para 8.6

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Legal Services · Transparency Rules

Harcourt Law LLP is a firm of solicitors that offers residential conveyancing and probate to individuals, and commercial lease work and corporate transactions to businesses. It has a website. A new compliance officer asks what the SRA Transparency Rules require the firm to publish on the website about its services and complaints. Which answer is correct?

1. Price information for all four services, including the commercial and corporate work.
2. Price and service information for the residential conveyancing and probate services, and details of its complaints procedure and the Legal Ombudsman.
3. No price information, because prices only have to be provided on request.
4. Only the firm's hourly rates, which must be shown for all fee earners.
5. Price information for probate only, since conveyancing is regulated by the Conveyancing Ombudsman.

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Answer: B. The SRA Transparency Rules require firms to publish clear price and service information for certain services offered to the public, including residential conveyancing, uncontested probate, and some other listed areas such as employment tribunal claims, immigration (non-asylum) and some debt recovery. Commercial work for businesses falls outside the price requirement. All firms must also publish information on their complaints procedure, the right to complain to the Legal Ombudsman, and their regulatory status. The purpose is to help consumers compare firms. The tempting answer is to publish prices for every service, but the Rules apply only to the listed services.

SRA Transparency Rules

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Legal Services · Client money: banking facilities

A client of your firm, a property investor, asks you to receive £120,000 from an overseas company into your firm's client account. He wants you to hold it for two weeks and then pay it in three equal parts to three bank accounts that he will name. There is no purchase, loan or other legal work to support the payments, but he offers a generous fee. He says the money is clean. What should you do?

1. Accept, provided the funds have cleared and the client signs an indemnity.
2. Accept, but charge a fee at the firm's normal hourly rate to show a genuine service.
3. Accept if the overseas company's bank confirms that it is regulated.
4. Decline, because client account must not be used to provide banking facilities, and consider whether you have a suspicion to report.
5. Accept, because holding money for a client for a short time is always client money.

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Answer: D. Rule 3.3 of the SRA Accounts Rules says that you must not provide banking facilities through a client account. Payments into, and transfers or withdrawals from, a client account must be in respect of instructions relating to an underlying transaction, or to a service forming part of your normal regulated activities. Moving £120,000 through the account with no transaction is a classic money laundering pattern. You should also consider the red flags, speak to your MLRO or nominated officer, and consider whether a suspicion must be reported under the Proceeds of Crime Act 2002. The tempting answer is to accept with safeguards. No safeguard cures the absence of an underlying transaction.

SRA Accounts Rules, rule 3.3; Proceeds of Crime Act 2002, s 330

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Legal Services · Money laundering: principal offences

Your firm acts for Stuart on the sale of his house and the purchase of another. During a meeting, he admits that £60,000 of the money he will put towards the new purchase came from selling goods he had stolen. He says the sum is small compared with the price and asks you to proceed. The firm is in the regulated sector. What should you do?

1. Proceed with the purchase, since £60,000 is a small part of the total price.
2. Proceed with the purchase, but tell Stuart that you have reported him to the NCA.
3. Stop acting and say nothing, as it is the client's own problem.
4. Proceed because the information came from the client and is covered by legal professional privilege.
5. Not proceed with the purchase, and make an authorised disclosure through the firm's nominated officer, seeking consent before acting further.

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Answer: E. Section 328 Proceeds of Crime Act 2002 makes it an offence to enter into or become concerned in an arrangement that you know or suspect facilitates the acquisition, retention, use or control of criminal property by or on behalf of another person. Completing a purchase that includes funds from theft would risk this offence. The defence is to make an authorised disclosure to the NCA, usually through the firm's nominated officer, before doing the act, and to obtain consent (s 335). Also, s 330 requires the regulated sector to report a suspicion. The tempting answer is that a small sum is harmless. The Act has no minimum.

Proceeds of Crime Act 2002, s 328; Proceeds of Crime Act 2002, s 330; Proceeds of Crime Act 2002, s 335

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Legal Services · Money laundering: consent and moratorium

Your firm's nominated officer submits an authorised disclosure to the National Crime Agency, asking for a defence against money laundering (consent) to complete a transaction. The NCA does not reply for several days. Which statement correctly describes the process under the Proceeds of Crime Act 2002?

1. The firm may proceed immediately, because the NCA has no power to prevent a transaction.
2. If the NCA refuses consent, the firm must wait six months before it can proceed.
3. If the NCA refuses consent within the seven working day notice period, a 31-day moratorium begins, and the firm must not proceed during it.
4. The notice period is 31 days and the moratorium is seven working days.
5. The firm needs no consent if its disclosure is made after the transaction has been completed.

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Answer: C. A person who makes an authorised disclosure before doing an act that would otherwise be a money laundering offence may seek appropriate consent from the NCA. The notice period is seven working days starting with the first working day after the disclosure. If consent is refused during that period, the moratorium period of 31 days begins from the day of refusal, and the firm must not do the prohibited act. The Crown Court may extend the moratorium by up to 31 days at a time, with extensions totalling no more than 186 days (s 336A). If the NCA does not refuse within the notice period, the firm is treated as having consent. The tempting error is to swap the periods. Seven working days is the notice period, and 31 days is the moratorium.

Proceeds of Crime Act 2002, s 335; Proceeds of Crime Act 2002, s 336A

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Legal Services · Money laundering: tipping off

Your firm has made an authorised disclosure to the NCA about a client's source of funds and is waiting for a response. The client phones a trainee and presses for completion. The trainee replies, "We have sent a report about the origin of your money to the National Crime Agency, and we cannot go ahead until we hear back from them." The trainee then tells the nominated officer. Is the trainee's statement a problem under the Proceeds of Crime Act 2002?

1. No, because a client has an absolute right to know why a solicitor will not act.
2. No, because tipping off applies only to the nominated officer and not to trainees.
3. Yes, but only if the client actually moves the money after hearing the statement.
4. Yes, it may be the offence of tipping off, because it discloses a report in the regulated sector and is likely to prejudice an investigation.
5. No, because the statement was made by telephone and not in writing.

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Answer: D. Section 333A Proceeds of Crime Act 2002 creates the offence of tipping off in the regulated sector. A person commits an offence if they disclose that a report (or an internal report) has been made to the NCA or nominated officer, and the disclosure is likely to prejudice any investigation that might be conducted following it, where the information came to them in the course of business in the regulated sector. The statement told the client of the report and where it was sent. The trainee should have referred the call to the nominated officer and avoided any statement revealing the report. The tempting answer is that the client is entitled to an explanation. The offence carries a criminal penalty, so it takes priority.

Proceeds of Crime Act 2002, s 333A

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Legal Services · Money laundering: enhanced due diligence

Your firm is instructed by Mr Adeyemi, a government minister of an overseas state, to buy a London property for £2.4 million through a newly formed company that he controls. He says the funds will come from family businesses abroad. He has not met anyone at the firm in person. Under the Money Laundering Regulations 2017, what is the correct approach?

1. Carry out standard identity checks only, as a minister is a trustworthy public figure.
2. Refuse to act, because the Regulations prohibit acting for any politically exposed person.
3. Report him to the NCA at once, since PEP status is itself a ground for suspicion.
4. Complete the checks after the transaction has been completed, as the amount is paid by a company.
5. Treat him as a politically exposed person, obtain senior management approval, establish his source of wealth and funds, and monitor the matter more closely.

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Answer: E. Regulation 33 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 requires enhanced due diligence in higher-risk situations, and reg 35 deals specifically with politically exposed persons (PEPs). For a PEP, the firm must have senior management approval for establishing or continuing the relationship, take adequate steps to establish the source of wealth and the source of funds, and conduct enhanced ongoing monitoring. The use of a company, a large sum and non-face-to-face contact add to the risk. The tempting answer is to refuse. The Regulations require a risk-based approach and enhanced measures, not a ban.

Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, reg 33; Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, reg 35

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Legal Services · Financial services and solicitors

A firm of solicitors is not authorised by the FCA. It is regulated by the SRA, which is a designated professional body. Client A is an executor who needs advice on selling shares in the estate as part of the administration. Client B is a beneficiary who asks the firm which unit trusts to buy with £200,000 she has inherited, for a separate fee. Which statement is correct?

1. The firm may advise Client A as an incidental part of the estate work, but advising Client B on unit trusts would be a regulated activity it cannot carry on.
2. The firm may advise both clients, since solicitors are exempt from FSMA 2000 for all investment advice.
3. The firm may advise neither client, as no regulated activity is allowed without FCA authorisation.
4. The firm may advise Client B if it charges the separate fee at its normal hourly rate.
5. The firm may advise Client B, because she is a private client rather than a company.

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Answer: A. Section 19 Financial Services and Markets Act 2000 prohibits carrying on a regulated activity in the UK unless authorised or exempt. Under Part 20 (s 327), a firm regulated by a designated professional body may carry on certain regulated activities without FCA authorisation. The activity must arise out of, or be complementary to, a particular professional service, it must be incidental to that service, and the firm must account to the client for any commission. Advice about selling estate shares in the administration fits that rule. Recommending unit trusts for a beneficiary to invest in is a free-standing investment service, and the SRA Financial Services (Scope) Rules also forbid it. The tempting answer is that solicitors are exempt for all investment advice. The exemption is much narrower.

Financial Services and Markets Act 2000, s 19; Financial Services and Markets Act 2000, s 327; SRA Financial Services (Scope) Rules

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Legal Services · Consumer protection: remedies for services

Kamal, a consumer, paid a solicitor's firm a fixed fee of £800 to draft a will leaving his estate equally to his three children. The draft will, which he signed and which was witnessed, accidentally left out one child. Kamal discovers the error while still alive and before any loss has occurred. He asks the firm to put it right. Which statement best describes his rights under the Consumer Rights Act 2015?

1. He has no rights under the Act, which covers only goods and not legal services.
2. He may require the firm to repeat the service at no extra cost within a reasonable time, and, if it fails to do so, claim a price reduction.
3. He may demand a full refund immediately, with no chance for the firm to correct the error.
4. He may only sue for damages once a child has been disinherited.
5. His only remedy is a complaint to the SRA, as the Act does not provide remedies against solicitors.

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Answer: B. Section 49 Consumer Rights Act 2015 implies a term that a trader must perform a service with reasonable care and skill. Omitting a child from a will fails that standard. Under s 54, the consumer's remedies include the right to repeat performance (s 55) and the right to a price reduction (s 56). Repeat performance must be done within a reasonable time and without significant inconvenience to the consumer, and at no cost to him. If the firm does not do so, or repeat performance is impossible, Kamal can claim a price reduction of any amount up to the full price. The tempting answer is a full refund immediately. The statutory order of remedies requires repeat performance first.

Consumer Rights Act 2015, s 49; Consumer Rights Act 2015, s 54; Consumer Rights Act 2015, s 55; Consumer Rights Act 2015, s 56

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Legal Services · Consumer protection: right to cancel

Priyanka, a consumer, accepts a firm's terms of engagement by email and an online form for a divorce-related matter. The firm has not met her. In its terms, the firm properly explained her 14-day right to cancel and her duty to pay for work done if she asked for early performance. She asked in writing for work to start immediately, and the firm drafted documents on days 1 to 4. On day 5, she cancels. The work done is worth £400 at the firm's hourly rates, and is about one quarter of the whole service covered by the fixed fee of £1,500. What can the firm claim?

1. The full fee of £1,500, since work started at her request.
2. Nothing, because a consumer who cancels never has to pay for services already supplied.
3. £400, the value of the work at the firm's hourly rates, whatever the fixed fee.
4. £375, a proportion of the fixed fee matching the work supplied, because she asked for work to start early.
5. Nothing, because the Regulations do not apply to contracts for legal services made online.

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Answer: D. The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 give a consumer a 14-day right to cancel a distance service contract, starting when the contract is made (regs 29 and 30). If the consumer expressly requests that the service starts during the cancellation period, and the trader has given the required information, the consumer who cancels must pay an amount in proportion to what has been supplied, compared with the full coverage of the contract (reg 36(4)). That amount is calculated on the basis of the total price agreed (reg 36(5)). One quarter of £1,500 is £375. If the firm had not given the information, Priyanka would owe nothing. The tempting answers are the full fee or the hourly-rate value. The Regulations use a share of the agreed price.

Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, reg 29; Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, reg 36

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Legal Services · Consumer protection: unfair terms

A firm's standard terms for private clients say that the firm may increase its hourly rates at any time, by any amount, without notice to the client, and that the client has no right to end the retainer if rates change. A client, Mrs Pell, is a consumer. After her bill rises by 60%, she asks whether the term binds her. What is the test for whether the term is unfair under the Consumer Rights Act 2015?

1. Whether, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations to the consumer's detriment.
2. Whether the term was written in small print that Mrs Pell did not read.
3. Whether the term is illegal under the SRA Standards and Regulations.
4. Whether the total price is higher than the Legal Ombudsman's guideline rates.
5. Whether Mrs Pell signed the terms, as a signed term is always fair.

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Answer: A. Section 62 Consumer Rights Act 2015 provides that an unfair term in a consumer contract is not binding on the consumer. A term is unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations under the contract to the detriment of the consumer (s 62(4)). Fairness is assessed taking into account the nature of the services, all circumstances at the time of agreement, and the other terms (s 62(5)). A term that lets the trader raise the price without notice or any exit right is a likely candidate. Section 68 requires terms to be transparent and prominent. The tempting answer is that signing makes a term fair. The Act protects consumers even after they sign.

Consumer Rights Act 2015, s 62; Consumer Rights Act 2015, s 68; Consumer Rights Act 2015, Sch 2, Pt 1

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Legal Services · Funding: conditional fee agreements

Dami brings a personal injury claim under a conditional fee agreement. She wins and is awarded damages of: £40,000 for pain, suffering and loss of amenity; £20,000 for past loss of earnings; and £100,000 for future loss of earnings. Her solicitor's agreement provides for the maximum success fee allowed in a personal injury claim. Use the cap that limits the success fee to 25% of general damages and past pecuniary loss. What is the highest amount her solicitor can take from her damages as a success fee?

1. £40,000
2. £10,000
3. £15,000
4. £5,000
5. £25,000

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Answer: C. A conditional fee agreement lets a solicitor charge a success fee if the case is won (Courts and Legal Services Act 1990 s 58). Since the Legal Aid, Sentencing and Punishment of Offenders Act 2012, the success fee is not recoverable from the losing party and is paid by the client (s 44 LASPO). In personal injury claims, the Conditional Fee Agreements Order 2013 caps the success fee at 25% of the damages for pain, suffering and loss of amenity, and past pecuniary loss, excluding damages for future pecuniary loss. The relevant damages here are £40,000 plus £20,000, which is £60,000. The maximum success fee is £15,000. The tempting error is to apply 25% to the total award.

Courts and Legal Services Act 1990, s 58; Legal Aid, Sentencing and Punishment of Offenders Act 2012, s 44; Conditional Fee Agreements Order 2013 (SI 2013/689), art 5

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Legal Services · Funding: qualified one-way costs shifting

Tomas brought a personal injury claim against a builder, funded by a conditional fee agreement. The claim was properly pleaded and honest, but Tomas lost at trial. He recovered no damages. The court orders him to pay the builder's costs of £30,000. Tomas has modest savings and owns his home. Under the qualified one-way costs shifting rules in CPR Part 44, what is the position on enforcement of the costs order against Tomas?

1. The builder can enforce the full £30,000 against Tomas's savings and his home.
2. The builder cannot enforce the costs order, because enforcement is limited to the damages, interest and costs awarded to Tomas, which are nil.
3. The builder can enforce only up to £10,000, as one-third of the costs.
4. The builder can enforce the order in full if Tomas's solicitor took the case on a conditional fee.
5. The builder can enforce the costs order only after Tomas has sold his home.

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Answer: B. Qualified one-way costs shifting applies in personal injury claims (CPR 44.13). Costs orders against the claimant can be enforced without the court's permission only up to the total of any damages, interest and costs orders in the claimant's favour (CPR 44.14, as amended in April 2023). Tomas recovered nothing, so no enforcement is possible. The protection is lost or reduced in listed cases, such as where the claim is struck out as showing no reasonable grounds (CPR 44.15) or is found to be fundamentally dishonest (CPR 44.16). Nothing here suggests that. The tempting answer is that a losing claimant pays the winner's costs in full. QOCS is a clear exception for personal injury claims.

CPR 44.13; CPR 44.14; CPR 44.15; CPR 44.16

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Legal Services · Legal aid: scope in civil matters

Five clients visit a legal aid solicitor's firm. Each hopes for civil legal aid under the Legal Aid, Sentencing and Punishment of Offenders Act 2012. Subject to means and merits, which client's matter is within the scope of civil legal aid?

1. A customer suing a garage for £15,000 for breach of contract.
2. A man who wishes to sue a newspaper for defamation.
3. A woman with a whiplash claim from a road accident.
4. A company seeking advice about a commercial lease dispute.
5. A homeowner facing possession proceedings for mortgage arrears, where the home is at immediate risk.

Show answer and explanation

Answer: E. Section 9 and Sch 1 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 list the civil legal services in scope, and Sch 1 Pt 2 lists exclusions. Since 2013, scope has been limited to areas such as domestic abuse and family cases involving abuse or child protection, housing where the home is at immediate risk, debt where the home is at immediate risk, discrimination, community care, and some immigration and asylum matters. A client must then meet the means test and the merits test. Contract disputes, defamation and most personal injury claims are out of scope. The tempting answer is a general money claim. Only the home-at-risk matter is within scope.

Legal Aid, Sentencing and Punishment of Offenders Act 2012, s 9; Legal Aid, Sentencing and Punishment of Offenders Act 2012, Sch 1

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