Regulation of the legal services market — SQE1 Legal services question
A worked single-best-answer question on regulation of the legal services market, with why each wrong option is wrong — the way SQE1 traps candidates.
Priya is a solicitor with a current practising certificate. She has just taken a job with WorkRight Ltd, a company that gives employment law advice to members of the public. WorkRight Ltd is not authorised by the SRA or by any other approved regulator, and it does not carry on any reserved legal activities. Priya will advise WorkRight's customers on dismissal and redundancy questions. Her manager tells her that, because the company is unregulated, she can ignore the SRA's rules altogether.
Which of the following best describes Priya's obligations when advising WorkRight's customers?
- AShe may not provide any legal services to the public while she is employed by a business that is not authorised by the SRA.
- BShe must hold the customers' money personally, in her own name, so that it is kept separate from the company's money.
- CShe need not give customers any information about regulation, because the SRA Code of Conduct applies only to solicitors working in authorised firms.
- DShe must refer every customer to an SRA-authorised firm before giving any advice.
- EShe must ensure customers understand that WorkRight is not regulated by the SRA and which regulatory protections, such as the SRA Compensation Fund, are not available to them.
Show answer and reasoning
Rule: A solicitor providing services from a business not authorised by the SRA remains bound by the Code and must ensure clients understand how the services are regulated and what protections are available.
- A Since November 2019 solicitors may provide unreserved legal services to the public from businesses that are not authorised by the SRA. (wrong rule)
- B Paragraph 4.3 of the Code prohibits a solicitor from personally holding client money except in narrowly prescribed circumstances. (wrong rule)
- C The Code of Conduct for Solicitors binds Priya personally wherever she works, including the duties in paragraphs 8.10 and 8.11. (wrong rule)
- D There is no rule requiring a solicitor in an unregulated business to refer clients elsewhere before advising them on unreserved matters. (wrong rule)
Source: SRA Code of Conduct for Solicitors, RELs and RFLs, paras 4.3, 8.10 and 8.11