SQE1 FLK1 Practice Paper 3

A director of a company lends £100,000 to the company and takes a fixed charge over the company's machinery to secure the loan. The company subsequently goes into insolvent liquidation. The fixed charge was not registered at Companies House within 21 days. What is the effect of the failure to register? A) The charge is void against the liquidator and other creditors, but the underlying debt remains valid and immediately repayable B) Both the charge and the underlying debt are void C) The charge remains valid because it was created by a director D) The charge is only void if another creditor specifically challenges it

A claimant brings a negligence action against a hospital following a surgical procedure. The claimant alleges that the surgeon failed to warn of a 2% risk of nerve damage, which materialised. The claimant says they would not have consented to the surgery had they known of the risk. Which of the following best states the current legal test for determining whether the surgeon breached their duty to inform? A) The Bolam test — the surgeon acted in accordance with a responsible body of medical opinion B) The Montgomery test — the surgeon was required to disclose material risks that a reasonable person in the patient's position would attach significance to C) The Bolitho test — the court must assess whether the body of medical opinion relied upon is logically defensible D) The Sidaway test — the duty of disclosure is determined solely by professional medical standards

A builder agrees to construct an extension for a homeowner for £40,000. During construction, the builder encounters unexpected ground conditions requiring additional foundations. The builder tells the homeowner that unless an extra £10,000 is paid, the work will stop. The homeowner, desperate to have the extension completed, agrees to pay the additional sum. After completion, the homeowner refuses to pay the extra £10,000. Is the homeowner bound by the promise to pay the additional sum? A) Yes, because the homeowner freely agreed to the additional payment B) No, because the builder provided no fresh consideration for the additional payment and the agreement was obtained through economic duress C) Yes, because the builder incurred additional costs due to unforeseen circumstances D) No, because building contracts cannot be varied without written agreement

A claimant wishes to bring judicial review proceedings against a government minister's decision. The claim form was filed 4 months after the decision was made. The claimant argues that they only became aware of the decision 2 months after it was made. What is the court's likely approach regarding the time limit? A) The claim is within time because the 6-month time limit applies to judicial review B) The claim is out of time because judicial review must be filed promptly and in any event within 3 months, and the court has discretion to extend time only where there is good reason C) The claim is automatically out of time and the court has no discretion to extend D) Time limits do not apply to judicial review claims against government ministers

A company has two classes of shares: ordinary shares and preference shares. The preference shares carry a right to a fixed cumulative dividend of 5% and priority on a return of capital. The company has not paid dividends for the last two years. Which of the following is correct? A) The preference shareholders can compel the company to pay the arrears of dividend B) The preference shareholders cannot compel payment but the arrears must be paid before any dividend is paid to ordinary shareholders C) The preference shares automatically convert to ordinary shares if dividends are not paid for two years D) The directors must declare a dividend if the company has sufficient distributable profits

A hospital trust negligently fails to diagnose a patient's cancer. At the time of misdiagnosis, the patient had a 40% chance of survival with correct treatment. By the time the cancer is correctly diagnosed, the patient's chance has reduced to 10%. The patient claims for the loss of the 30% chance of survival. How is the court likely to approach this claim? A) The patient will succeed because any loss of chance above 0% is recoverable B) The patient will fail because the loss of chance doctrine does not apply to clinical negligence claims involving the claimant's own medical condition C) The patient will succeed because the hospital owed a duty of care D) The patient will fail because the 40% initial chance was below 50% and therefore would not have been proven on the balance of probabilities anyway

An employee is summarily dismissed for alleged gross misconduct. The employer later discovers additional grounds for dismissal that existed at the time of dismissal but were unknown. Can the employer rely on the subsequently discovered misconduct to justify the dismissal? A) No, because the employer can only rely on the reasons known at the time of dismissal B) Yes, the employer can rely on subsequently discovered misconduct to show that the employee would have been dismissed in any event, which may affect the remedy but not the finding of fairness C) Yes, the subsequently discovered misconduct automatically makes the dismissal fair D) No, because the employer must start a new disciplinary process for the newly discovered misconduct

A solicitor acting for the defendant in a multi-track personal injury claim receives a witness statement from an expert instructed by the defendant. The expert's report is unfavourable to the defendant's case. The solicitor decides not to disclose the report. Which of the following is correct? A) The solicitor has no obligation to disclose an unfavourable expert report if the expert has not been called as a witness B) Under CPR Part 35, a party is not required to disclose an expert report that has been obtained but which the party does not wish to rely upon, but the court may order disclosure C) All expert reports obtained must be disclosed regardless of whether the party intends to rely on them D) The solicitor can redact the unfavourable parts and disclose only the favourable sections

A tenant has a 10-year business lease of commercial premises. The lease is about to expire and the tenant wishes to remain in occupation. The landlord wants to redevelop the premises. Under the Landlord and Tenant Act 1954, which of the following is correct? A) The tenant has no right to remain once the lease expires B) The tenant is entitled to a new lease unless the landlord can establish one of the statutory grounds for opposition under section 30 C) The landlord can terminate the lease at any time by giving one month's notice D) The tenant must vacate but is entitled to compensation equal to five years' rent

A claimant in a breach of contract claim seeks to recover consequential losses for lost profits. The defendant argues the losses are too remote. Which test applies to determine remoteness of damage in contract? A) The 'but for' test — whether the losses would have occurred but for the breach B) The foreseeability test from The Wagon Mound — whether the type of damage was reasonably foreseeable C) The Hadley v Baxendale test — whether the losses arose naturally from the breach or were in the reasonable contemplation of the parties at the time of contracting D) The 'eggshell skull' rule — the defendant must take the claimant as they find them

A shareholder holding 15% of the shares in a private company believes the majority shareholders are conducting the company's affairs in a manner unfairly prejudicial to the minority. Which remedy is the shareholder most likely to pursue? A) A derivative claim under Part 11 of the Companies Act 2006 B) An unfair prejudice petition under section 994 of the Companies Act 2006 C) A winding-up petition on just and equitable grounds D) An application to the court for a declaration that the majority's actions are ultra vires

A defendant in criminal proceedings wishes to challenge the compatibility of a statutory provision with Article 6 of the European Convention on Human Rights (right to a fair trial). In which court can the defendant seek a declaration of incompatibility? A) The Magistrates' Court B) The Crown Court sitting as a trial court C) The High Court or above D) Any court or tribunal

An employer wishes to include a restrictive covenant in an employee's contract preventing them from working for a competitor for 24 months after termination within a 200-mile radius. The employee is a junior sales assistant. Which of the following best describes the enforceability of this covenant? A) The covenant is enforceable because the employer has a legitimate interest in protecting its business B) The covenant is likely unenforceable because it goes further than reasonably necessary to protect the employer's legitimate interests, given the employee's junior role and the excessive duration and geographical scope C) Restrictive covenants in employment contracts are always void as restraints of trade D) The covenant is enforceable because the employee freely agreed to it

A claimant brings proceedings for personal injury. The defendant wishes to obtain an order requiring the claimant to submit to a medical examination by the defendant's expert. Under which provision can the defendant apply for such an order? A) CPR Part 25 — interim remedies B) CPR Part 35.7 — court's power to direct a party to undergo medical examination C) The defendant has no right to require the claimant to undergo a medical examination D) CPR Part 31 — standard disclosure obligations

A company enters administration. Which of the following correctly describes the primary purpose of administration under the Insolvency Act 1986? A) To ensure the immediate liquidation of the company's assets for the benefit of creditors B) To achieve the purpose of rescuing the company as a going concern, or achieving a better result for creditors than would be likely on winding up, or realising property to make a distribution to secured or preferential creditors C) To allow the directors to continue trading without personal liability D) To freeze all creditor claims permanently