Monday 27 April 2026
Your weekly SQE Prep Quiz has arrived
Dear Subscriber,
Hope you had a great weekend. Please see below for the question, the answer to the previous question and associated resources. This is the web version of this newsletter.
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This Week’s Question: A delivery company employs a driver to transport parcels. During his shift, the driver stops briefly to visit a friend, despite company rules prohibiting personal stops. While leaving the friend’s house, the driver reverses the van negligently and injures a pedestrian. At the same time, the pedestrian was crossing the road while looking at a phone and failed to notice the reversing van. The pedestrian brings a claim against the delivery company. Which of the following best reflects the likely legal position?
A. The company is not liable because the driver was acting outside his employment when visiting a friend.
B. The company is liable because the driver was employed, and all acts during working hours are attributable to the employer.
C. The company may be liable because the driver’s actions were sufficiently connected to his employment, but damages may be reduced due to the pedestrian’s conduct.
D. The company is not liable because the pedestrian contributed to the accident by using a phone while crossing the road.
E. The company is automatically liable for the driver’s negligence, and the pedestrian’s conduct is irrelevant.
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Last Week’s Question: A firm acts for a company buyer in an asset purchase. On Monday, the firm receives a single bank transfer of £18,000 from the client. The transfer is made up of £12,000 to be held on account of completion, £4,000 in respect of the firm’s profit costs for work already done, and £2,000 to reimburse counsel’s fee, which the firm has already paid from office account the previous week. The client’s email sent immediately before the transfer clearly identifies all three elements. The firm has previously delivered a bill to the client in respect of the £4,000 profit costs.. The cashier asks how the money should be dealt with that day. Which is the best answer?
A. Pay the full £18,000 into client account first, because all money received from a client in connection with a matter must initially be treated as client money until billing is completed.
B. Pay £12,000 into client account and £6,000 into office account, because the payment is mixed and the firm should allocate promptly to the correct accounts.
C. Pay £16,000 into client account and £2,000 into office account, because reimbursement of counsel’s fee already paid by the firm is office money, but money for the firm’s own costs must always pass through client account before any transfer out.
D. Pay the full £6,000 relating to costs and disbursements into office account regardless of whether a bill was delivered, because the whole mixed payment can be allocated. Return the £12,000 to the client till the money is requested.
E. Pay the full £18,000 into office account, because the client has expressly identified the purpose of each sum and none of the money therefore needs the protection of client account.
Correct answer: B Pay £12,000 into client account and £6,000 into office account, because the payment is mixed and the firm should allocate promptly to the correct accounts. This is correct because the £18,000 is a mixed payment, and the SRA Accounts Rules 2019 require the firm to allocate mixed receipts promptly to the appropriate account rather than treating the whole sum as one type of money. Each element must be classified on its own nature. The £12,000 held on account of completion is plainly client money: it belongs to the client and is being held for a specific transaction purpose. It must go into client account and be kept separate from the firm’s own funds.
The £2,000 reimbursing counsel’s fee is office money. The firm already discharged that liability from its own office account the previous week, so the client is simply repaying the firm. There is no client interest to protect and no reason to route this through client account. The £4,000 for the firm’s profit costs would ordinarily require a bill or written notification of costs to have been delivered before client money could be used to satisfy it. Here, however, the scenario confirms that a bill has already been delivered in respect of these costs. That condition is met, so the £4,000 can properly be allocated directly to office account on receipt without any intermediate step through client account. The cashier should therefore pay £12,000 into client account and £6,000 into office account on the day of receipt.
Why the other answers are wrong:
A is wrong because the rules do not require every sum received from a client to be paid into client account first regardless of its character. That would be too crude. The rules focus on the nature of the money. Mixed payments must be allocated promptly and correctly, not mechanically treated as wholly client money.
C is wrong because it asserts that the firm’s profit costs must always pass through client account before being transferred to office account. No such universal rule exists. The requirement is correct classification at the point of receipt and, where client money is being used for costs, prior delivery of a bill or written notification. Both conditions are satisfied here, so the £4,000 goes directly to office account.
D is wrong in two respects. First, it treats the billing requirement as irrelevant when in fact it is a genuine precondition — one that happens to be satisfied on these facts but cannot simply be disregarded as a matter of principle. Second, and more fundamentally, it suggests returning the £12,000 completion money to the client until it is needed. Completion money received from a client must be held in client account; it cannot simply be returned because the transaction has not yet completed.
E is wrong because the £12,000 for completion is client money regardless of how clearly the client has identified its purpose. Client identification of the payment elements assists the firm in classifying the money correctly, but it cannot convert client money into office money. Completion funds must be protected in client account.
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Dr Ioannis (Yannis) Glinavos
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