Q&As

Do we need FCA authorisation to provide independent legal advice to a client in relation only to a consumer credit, litigation funding agreement between that client and another law firm?

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Published on LexisPSL on 30/01/2019

The following Practice Compliance Q&A provides comprehensive and up to date legal information covering:

  • Do we need FCA authorisation to provide independent legal advice to a client in relation only to a consumer credit, litigation funding agreement between that client and another law firm?
  • FCA regime
  • Credit broking
  • Providing credit information services
  • FCA regime conclusion
  • SRA’s regime

Do we need FCA authorisation to provide independent legal advice to a client in relation only to a consumer credit, litigation funding agreement between that client and another law firm?

FCA regime

It would seem that the first issue to consider is whether advising on a credit agreement between the client and a third party is a regulated activity for the purpose of the Financial Conduct Authority (FCA). The FCA’s non-exhaustive List of financial activities we regulate contains the following consumer credit activities which require FCA authorisation:

  1. entering into a regulated credit agreement as lender

  2. exercising, or having the right to exercise, the lender's rights and duties under a regulated credit agreement

  3. credit broking

  4. debt adjusting

  5. debt counselling

  6. debt collecting

  7. debt administration

  8. advising on regulated credit agreements for the acquisition of land

  9. entering into a regulated consumer hire agreement as owner

  10. exercising, or having the right to exercise, the owner's rights and duties under a regulated consumer hire agreement

  11. providing credit information services

  12. providing credit references

  13. operating an electronic system in relation to lending

The fact that this list specifically includes advising on regulated credit agreements for the acquisition of land tends to suggest that advising on other credit agreements does not require FCA permission. Nevertheless, this response briefly considers the other potential activities in the list.

Assuming the advice does not relate to a pre-existing debt, most

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