PREPARING

FOR THE EXAMINATION

DUTY TO CLIENT

OVERVIEW

Your final examination includes questions that are based either on essay questions or factual
scenarios. We encourage you to read the following practice questions, write down your own
answers, and then compare your responses to each example provided.

Each of your responses should:

Articulate a clear and insightful position on the issue, in accordance with the assigned
task;

Develop the position fully with compelling reasons and / or persuasive examples, and
the relevant statutory provision, rules and rulings or judicial precedent;

Sustain a well-focused, well-organised analysis, connecting ideas logically;

Convey ideas fluently and precisely, using effective vocabulary and sentence variety;

Demonstrate facility with the conventions of standard written English (i.e., grammar,
usage, and mechanics) although the final grade will not take into account grammatical
errors or poor use of language unless the same makes the answer incomprehensible;

Remember, in answering scenario-based questions, application is the most important

section of your answer and should take up the bulk of your time. The actual conclusions
you reach are often superfluous. The marker will be most interested in how you arrived
at your conclusion.

HOW TO PRACTICE

Do the Practice Questions

o Doing practice questions will give you insight into your strengths and
weaknesses;

o Practice questions are a tool for diagnosing your strengths and weaknesses in
answering questions it is not how well you do that matters, but how you use
information gleaned from your performance, to guide your preparation;

o Follow the instructions that appear before the practice questions.

Check Your Answers

o Review each of your answers with the examples and rationale provided.

Reflect on the Practice Questions

o After you finish the practice questions, think about the following:

How much time did you spend on each practice question?

Do you feel you had the required knowledge to address the subject
matter of the questions?

Do you feel you wrote well-organised, thoughtful and relevant

responses?

Does your response meet the required amount of words which shall be
capped at 300 words per answer?

Self-Evaluation

o Re-visit and evaluate your responses to each question;

o Reflect on what areas you still need to work on, and revisit those sections in
order to address any gaps.

Keep Practicing

o Continuing to practice will ensure you are prepared for the examination.

INSTRUCTIONS

Your final examination requires answers to be submitted in essay form. Each response on the
final examination will be marked on its clarify and effectiveness in answering each question.
After completing each question, you should check your essay for accuracy of punctuation,
spelling, and dictation. Quality is far more important than quantity.

Preparation

o Take out a pen/pencil and a few pieces of paper

o Your response should not exceed 300-words

Drafting Each Response

o Read each practice question carefully

o Think about your response before you begin

o Start writing your response and ensure you are meeting the requirements of
each question

o It time permits, go back and evaluate your response

Evaluating Each Response

o Turn the page and compare your responses to the examples and rationale
provided

PRACTICE QUESTION #1

You are advising your client on a takeover of a company. You are aware that the takeover will
create a lot of media interest, and will probably result in the shares of the target company
becoming more valuable.

You decide that you will make an investment in the target company, to take advantage of the
likelihood that its share price will go up once news of the takeover gets out.

Is there anything wrong with what you plan to do?

What consequences could follow? (10 marks)

Turn the page and compare your response to the example provided when you are finished.
PRACTICE QUESTION #1

You are advising your client on a takeover of a company. You are aware that the takeover will
create a lot of media interest, and will probably result in the shares of the target company
becoming more valuable.

You decide that you will make an investment in the target company, to take advantage of the
likelihood that its share price will go up once news of the takeover gets out.

Is there anything wrong with what you plan to do?

What consequences could follow? (10 marks)

BACKGROUND

The following response is based on an actual script that was submitted by a previous learner
who successfully completed the Ethics training course. We have made minor corrections to the
original submission. This response was graded at 5 out of 10 marks.

SAMPLE RESPONSE

What I am proposing to do in these circumstances is wrong. It would not be acceptable for me

to make an investment in the target company, in order to take advantage of the likelihood that
its share prices will increase once news of the takeover gets out.

To do so would be contrary to the Rules under the Legal Profession (Practice and Etiquette)
Rules (LP(PE)R) 1978.

I am minded that, in addition to the contractual duty and common law duty of care that exists
between a solicitor and his client, a solicitor also owes his client a fiduciary duty under section
126 Evidence Act 1950. This fiduciary duty requires me, as a solicitor, neither to abuse the
confidence the client entrusts in me, not to take advantage of information obtained in the
course of the solicitor-client relationship.

This is with specific reference to Rule 35 LP(PE)R 1978 which stipulates that an advocate and
solicitor shall refrain from any action whereby for his personal benefit or gain, he abuses or
takes advantage of the confidence reposed in him by the client. Further, in Readings Petition of
Right [1949], Acquith LJ stated,

a consideration of the authorities suggests that for the present purpose, a fiduciary
relationship exists (a) whenever the plaintiff entrusts to the defendant property tangible or
intangible and relies on the defendant to deal with such property for the benefit of the plaintiff
for the purposes authorised by him and not otherwise; (b) whenever the plaintiff entrusts to the
defendant a job to be performed, for instance, the negotiation of a contract on his behalf or for
his benefit, and relies on the defendant to procure for the plaintiff the best terms possible.

Therefore, it is clear that a fiduciary is not allowed to make a profit from information that is
disclosed to me, which in these specific circumstances, refer to the takeover of the company,
and as such, I cannot use this information in any way. I cannot profit from the knowledge of my
clients business deals and intentions that come to me while I am a fiduciary. The further point
made in Rule 35(b) LP(PE)R 1978 is that an advocate and solicitor shall preserve his client's
confidence and this duty outlasts his employment. This means that even after he ceases to be
my client, I cannot profit from any information obtained while he was my client.

Any gain that I receive from any source as a result of using my clients information or property
held on trust for the benefit of the client will require me, as a fiduciary to account to the client
for any gain.

Where my personal interests conflict with that of my client, it is clear that as a fiduciary, I owe a
duty to prefer the interest of my client. This requirement is manifest by the provisions of section
42(1)(a) of the Legal Profession Act 1976 which requires me to uphold the cause of justice
without regard to my own interests uninfluenced by fear or favour. It would be wrong
therefore, for a lawyer to put his personal interest ahead of his clients.

Making an investment in the company would therefore be an abuse of the confidence vested in
me by the client and would amount to a breach of my professional duties, and professional
misconduct.

On a separate issue, I must ensure that the process of the takeover generates the minimum
media attention to the role that I will play in the transaction. According to the Legal Profession
(Publicity) Rules 2001, lawyers should not be permitted to advertise their services. The purpose
of these Rules is to ensure that lawyers avoid promoting their practice in such a way that it may
mislead the public and / or diminish the good standing of the legal profession. I will need to
ensure that any publicity generated will not amount to advertising on my part, and that only
approved information will be allowed in accordance Rule 15 of the 2001 Rules.

In conclusion, I must not abuse my role as a fiduciary to my client or I will risk not only
disciplinary proceedings under section 94 of the Legal Profession Act 1976, but also the
possibility of being sued by my client for negligence.

COMMENTARY

Generally, the approach taken is accurate with the correct emphasis on ensuring against breach
of the fiduciary duty that is owed by the solicitor to the client.

In order for the answer to have been better presented, it would have been useful to highlight
relevant case law in this area.
PRACTICE QUESTION #2

PART 1

Give an overview of the Bar Councils Professional Indemnity Insurance Scheme and why such a
scheme is necessary for the Bar? (3 marks)

PART 2

You are involved in a share sale agreement between a Director of a public listed company and a
Tan Sri who is well connected.

You learn from your client that once the Tan Sri becomes a major shareholder, all the business
from the Tan Sris various companies will be channeled to this public listed company. You know
for certain that when this news leaks out, the share price will substantially rise.

You purchase one million shares at RM1.00 each. After 1 month, the shares have gone up to
RM3.00 per share.

Discuss if you have done any wrongdoing and the consequences if this fact is discovered.
(7 marks)

Turn the page and compare your response to the example provided when you are finished.

PRACTICE QUESTION #2

PART 1

Give an overview of the Bar Councils Professional Indemnity Insurance Scheme and why such a
scheme is necessary for the Bar? (3 marks)

PART 2

You are involved in a share sale agreement between a Director of a public listed company and a
Tan Sri who is well connected.

You learn from your client that once the Tan Sri becomes a major shareholder, all the business
from the Tan Sris various companies will be channeled to this public listed company. You know
for certain that when this news leaks out, the share price will substantially rise.

You purchase one million shares at RM1.00 each. After 1 month, the shares have gone up to
RM3.00 per share.

Discuss if you have done any wrongdoing and the consequences if this fact is discovered.

(7 marks)

BACKGROUND

The following response is based on an actual script that was submitted by a previous learner
who successfully completed the Ethics training course. We have made minor corrections to the
original submission. Part 1 was graded as 2 out of 3 marks, and Part 2 was graded at 5 out of 10
marks.

SAMPLE RESPONSE

PART 1

The Legal Profession Act (LPA) 1976 was amended to introduce compulsory professional
indemnity insurance for all legal firms. It is suggested that this was done with the intention to
benefit all lawyers from the time it came into force on 1April1992.
The amendments empower the Bar Council to make rules of professional indemnity insurance.
Bar Council will take out a master policy (the Scheme) to provide indemnity against professional
liability for all advocates and solicitors with effect from 1 July 1992.

Under the Scheme, insurance will be provided to all lawyers who are allowed to practice by the
Bar Council. The scheme provides cover from minimum mandatory limit of indemnity of
RM250,000 for a lawyers practice increasing by RM50,000 for every additional lawyer up to a
maximum of RM2 million.

Such a scheme is necessary for the Bar to protect its members as every lawyer is a member of
the Bar, and there should not be a stand-Alone risk.

PART 2

A solicitor owes a duty to hi client and this is a fiduciary duty. This duty requires the solicitor to
abuse nor to take any secret advantage of the special situation that has been created by their
relationship.

On the facts, there is a duty to account, and a fiduciary is not allowed to make a profit from the
information that is disclosed to him in his capacity as solicitor on records, or from the use of any
property of the client that has been deposited with him. This means that he cannot profit from
the knowledge of his clients business deals and intentions where this information comes to the
lawyer while he is a fiduciary. In a nutshell, any gain that the fiduciary receives from any source
as a result of using his clients information or property which is held on trust, and the fiduciary
shall be made accountable for any gains received in such a situation.

COMMENTARY

The considerations here are rather weak although the main issues were considered in Part 1. For
Part 2, there is a gap in terms of the relevant rules and rulings that should have been cited, as
well as existing and relevant case law considerations.