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Sarah White brokers a litigation settlement for the specific performance of a contract where her client agrees to purchase shares in the other party's company. She then presents a cheque on behalf of her client, draws up a stock transfer form, and submits it to the company secretary. Separately, Sarah negotiates a settlement in a personal injury case where her client receives a lump-sum payment and seeks advice on investing the money.
Which of the following best explains the legal position regarding the 'necessary' exclusion?
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In the share purchase case, all the arranging activities can be seen as a necessary part of the litigation services, allowing Sarah to rely on the 'necessary' exclusion. However, in the personal injury case, the investment advice provided after the client receives the lump-sum payment cannot be regarded as a necessary part of the litigation services. Sarah would need to rely on the Part XX 'incidental' exemption instead. Option D is incorrect because a solicitor can always obtain advice from an Authorised Third Person (ATP) on a fully disclosed basis.
Key Point: This question assesses the application of the 'necessary' exclusion and other relevant exemptions under the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 in different contexts of legal services.
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