Marking Rubric:

HYPOTHETICAL ILAC QUESTION (EXTENDED): Steve is a pre-existing client of Bill, a financial planner. Bill has provided financial advice to Steve for the past 5 years and Bill is very familiar with Steve's financial affairs. Owing to losing his job due to Covid-19, Steve is hoping to restructure his investments into a more conservative fund, which will provide a more consistent return whilst Steve is unemployed. Steve communicates these wishes to Bill. Bill looks into some of the options his firm is currently recommending and settles on the 'Super Duper Fund which has yielded healthy returns in every one of the past 12 years. Bill mentions this performance to Steve and he is easily swayed. Steve transfers almost all of his investment account ($1,000,000) funds to the Super Duper Fund. Whilst receiving advice from Bill, Steve enquires about the prospects of investing in cryptocurrency. Bill states that he has not previously advised clients on cryptocurrency investment. However, he notes the opportunities for significant returns and has heard 'good things' about such investments. Steve leaves Bill's office happy and decides to invest $200,000 in the newest cryptocurrency, Not-A-Scam Coin. He performs no research on the investment whatsoever and takes Bill's endorsement as sufficient evidence of the prospects of a healthy return. With Steve's financial future now secure, he decides to take his wife, Beth, on a round-the-world trip and spends much of his savings in the process (upwards of $50,000). A year later, Steve's investments are performing poorly. Not-A-Scam coin turned out to be a disastrous investment with Steve losing all of his initial $200,000 investment. Additionally, the Super Duper Fund is down 20%. The Australian market as a whole is down 15% on the previous year, but the Super Duper fund has taken an even larger hit, as it is being dragged down by its investment in several airports which are suffering huge losses, due to Covid-19. Even worse, not a single company in the portfolio paid out a dividend, which was consistent across the market. As it turns out, Bill was extremely busy when he gave Steve the advice a year ago, and his research was not as thorough as it would usually be. He did not notice the high portfolio weighting of airport shares and probably would have selected a different option had he known of this. Cryptocurrency is a challenging proposition within the financial planning industry. Despite the high risks, many clients are now asking for advice on such investments. The Financial Planning Association of Australia (FPA) advises that its members should not recommend cryptocurrency to its clients as a potential investment opportunity, but if clients raise the matter themselves, it is necessary for members/financial planners to warn of the high-risk nature of the investment. Due to the increasing interest from clients, professional seminars exist to help financial planners navigate cryptocurrency advice to their clients. Bill had previously looked into these seminars but had not been able to afford the significant cost (each 1 hour seminar cost more than $1,000). Unfortunately, due to these significant losses, Steve's lack of income, and lack of savings, he was unable to keep up with his mortgage repayments. Steve's bank foreclosed on his home and sold the property at auction for significantly less than it was worth. The property was worth $1,000,000 pre-covid and was sold at auction for $650,000. Steve is especially frustrated as he has since secured employment and if he had received the $20,000 in dividends he was expecting, his house would have been safe. Steve is furious and wishes to sue Bill for providing negligent advice. Advise Steve as to his prospects in a claim for negligence against Bill for the losses incurred as a result of the Super Duper Fund, the cryptocurrency advice, and the sale of Steve's house. In your answer, you should use the ILAC method as taught in workshops, and refer to the relevant provisions of the Civil Liability Act 2003 (Qld) as well as the supporting common law. You should discuss all three (3) elements of negligence and consider possible defences. You only need to discuss Bill's potential liability under the tort of negligence. You do not need to discuss any liability under contract law, or any other causes of action. Extra help: Web LAW: Statute: Civil Liability Act 2003 (OLD) Common Law s.11(1) - Defendants conduct caused harm MLC v Evatt - Three step test for owing a s.11 (1) (a) - Factual causation duty of care s. 11 (1) (6) - Scope of liability Mohr v Cleaver - The environment in which s.20 - Definition of professional advice was given s.22 - Professional breach of duty Hedley Byrne v Heller - Presence or absence of special skill by defendant Limitations of Actions Act 1974 (OLD) Shaddock v Parramatta City Council - Advice specifically asked for / Alternative source of advice San Sebastian v NSW Planning Authority - advice specifically asked for Mules v Ferguson - "but for test The "Wagon Mound" Case - Damages reasonably foreseeable LAW Template Breach of Duty Section 9(1) CLA: A person does not breach a duty to take precautions against a risk of harm unless a) the risk was foreseeable (that is, it is a risk of which the person knew or ought reasonably to have known), and b) the risk was not insignificant; and c) in the circumstances, a reasonable person in the position of the person would have taken the precautions Section 9(2) CLA: In deciding whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (among other relevant things) - d) the probability that the ham would occur if care were not taken (Bolton); e) the likely seriousness of the harm (Paris), and the burden of taking precautions to avoid the risk of harm (Woods). | Application/ Arguments / Analysis: *This should be extended prose written in paragraph form** You can separate by headings such as issue 1, issue 2, etc, but the point is this is where you write at length about the law and how it applies to the question you are given (and is where we test if you know and understand the course content). Be Aware that this section accounts for roughly half of your grade. Come up with arguments as to why you think the legal issues would be resolved (or a court would rule) in a certain way. Another way to think about this is to apply the law (cases/ legislation) to the factual scenario given. It is expected that this will form a significant portion of your answer. - Explain each of the relevant sections and cases; and then - Apply those sections and cases to the facts. Marking Rubric for Hypothetical ILAC Question: Criteria Excellent Very Good Good Satisfactory Un satisfactory IDENTIFICATION OF LEGAL ISSUES: The student has The student has The student has The student has The student has failed Identify the legal issues in the accurately and identified all of the identified most but identified some of to identify most of the hypothetical Separate major issues succinctly identified issues and sub not all of the issues the issues and sub issues and sub-issues into a number of sub-issues where al of the issues and issues confronting and sub-issues issues confronting confronting the parties appropriate. (4 marks) Sub-issues the parties so as to confronting the the parties so as to so as to resolve the confronting the resolve the problem. parties so as to resolve the problem. problem parties so as to resolve the problem resolve the problem IDENTIFICATION AND Identification and Identification and Identification and Identification and Very limited UNDERSTANDING OF RELEVANT understanding of all understanding of understanding of understanding of identification and LAW: Students are only required to of the relevant law to largely all relevant most of the relevant some of the relevant understanding of the provide the case name(s). In addition, resolve the legal law to resolve the law to resolve the law to resolve the relevant law to relevant Section numbers of the problem. Extensive legal problem. legal problem. Some legal problem. Some resolve the legal legislation and the key words of the evidence of research Substantial evidence evidence of research evidence of research problem. Very limited legal principles provided in to identify relevant of research to idently to identify relevant to identify relevant or no evidence of cases/sections of the legislation. (7 cases and/or relevant cases and/or cases and/or cases andor legal research beyond marks) legislation legislation legislation legislation the course materials APPLICATION: Apply each legal Excellent application High standard of Reasonable Satisfactory standard Failure to principle to resolve the issues identified of the low to the application of the low standard of in applying the law to demonstrate a In the question Explain the legal question. Arguments to the question application in the question satisfactory standard principle from the sections of the are excellent in Arguments are applying the low to Arguments often lack in applying the law to legislation and/or cases briefly. Apply terms of logical generally clear and the question. Some clarity and the question. each legal principle to the question and development, clarity persuasive. arguments lack persuasiveness. Arguments are use the facts to explain why the and persuasiveness darity and unclear or not element is or is not satisfied. (15 persuasiveness persuasive marks) CONCLUSION Give a condusion The condusion The conclusion The conclusion The conclusion The conclusion does which resolves each of the issues discuses all of the generally discuses al discuses most of the discuses some of the not discuss any identified earlier and discuss the appropriate the relevant relevant remedies relevant remedies remedies. No links remedies available to the parties. (4 remedies accurately remedies. Clear links Clear links can be Few links are are established marks) Clear and concise are established identified with some established between between the legal links are established between the legal difficulty between the legal issues and issues and the between the legal Issues and the the legal issues and the conclusion, but conclusion issues and the condusion the conclusion they are ambiguous. conclusion ---- USING THE PROVIDED TEMPLATE AND MARKING RUBRIC, IMPROVE AND EXTEND YOUR ANSWER BELOW. --- Issue In recent years, development in technology and creativity has continued to evolve globally, transforming the attitude of investors and financial planners as well. According to Nolan, a circumstance in which a person behaves in a reckless way that results in injury to someone else is seen as negligence. Bill is also irresponsible in providing Steve financial advice on the Super Duper Fund without extensive analysis being carefully conducted. In addition, Bill's legal responsibility is to do research and advise on the growth of financial resources and risks to clients. As a result, Bill fails to advise Steve; a loyal customer year, but gives bad advice on cryptocurrencies that motivates Steve to invest in this new sector. However, if Bill did not break the civil obligation, losses suffered by Steve may have been stopped. Law Under the negligence statute, a party causing injury incurred by the carelessness of another person can be sued for damages to pay for the damages. Moreover, to decide whether neglect happened, this statute is analyzed in general terms after obligation, violation, causation, and injury models. In addition, without violating the obligation or behaving in an omission way that results in damages, a person must exercise fair consideration for others. Every fairly, probable outcome as a result of an individual's omission of another is ultimately tried in a court of law. Application According to the rule of neglect, when telling Steve about the Super Duper Fund purchase, Bill refused to exercise his legal duty of care. In addition, by offering constructive guidance without evidence or analysis on cryptocurrency investing, Bill ignored the legal requirement, causing Steve suffer a significant loss over the investment created. Similarly, because he didn't do adequate homework, Bill's actions are irresponsible as a financial planner. Therefore, because it was His suggestion that contributed to Steve's bad investment causing monetary damages, Bill should therefore be responsible for loss of Steve's home. Conclusion In conclusion, it is Bill's moral responsibility to provide fair and legal financial advice to Steve when keeping the evolving financial market into account. Bill should, however, at least be able to save Steve's house due to his bad financial advice. HYPOTHETICAL ILAC QUESTION (EXTENDED): Steve is a pre-existing client of Bill, a financial planner. Bill has provided financial advice to Steve for the past 5 years and Bill is very familiar with Steve's financial affairs. Owing to losing his job due to Covid-19, Steve is hoping to restructure his investments into a more conservative fund, which will provide a more consistent return whilst Steve is unemployed. Steve communicates these wishes to Bill. Bill looks into some of the options his firm is currently recommending and settles on the 'Super Duper Fund which has yielded healthy returns in every one of the past 12 years. Bill mentions this performance to Steve and he is easily swayed. Steve transfers almost all of his investment account ($1,000,000) funds to the Super Duper Fund. Whilst receiving advice from Bill, Steve enquires about the prospects of investing in cryptocurrency. Bill states that he has not previously advised clients on cryptocurrency investment. However, he notes the opportunities for significant returns and has heard 'good things' about such investments. Steve leaves Bill's office happy and decides to invest $200,000 in the newest cryptocurrency, Not-A-Scam Coin. He performs no research on the investment whatsoever and takes Bill's endorsement as sufficient evidence of the prospects of a healthy return. With Steve's financial future now secure, he decides to take his wife, Beth, on a round-the-world trip and spends much of his savings in the process (upwards of $50,000). A year later, Steve's investments are performing poorly. Not-A-Scam coin turned out to be a disastrous investment with Steve losing all of his initial $200,000 investment. Additionally, the Super Duper Fund is down 20%. The Australian market as a whole is down 15% on the previous year, but the Super Duper fund has taken an even larger hit, as it is being dragged down by its investment in several airports which are suffering huge losses, due to Covid-19. Even worse, not a single company in the portfolio paid out a dividend, which was consistent across the market. As it turns out, Bill was extremely busy when he gave Steve the advice a year ago, and his research was not as thorough as it would usually be. He did not notice the high portfolio weighting of airport shares and probably would have selected a different option had he known of this. Cryptocurrency is a challenging proposition within the financial planning industry. Despite the high risks, many clients are now asking for advice on such investments. The Financial Planning Association of Australia (FPA) advises that its members should not recommend cryptocurrency to its clients as a potential investment opportunity, but if clients raise the matter themselves, it is necessary for members/financial planners to warn of the high-risk nature of the investment. Due to the increasing interest from clients, professional seminars exist to help financial planners navigate cryptocurrency advice to their clients. Bill had previously looked into these seminars but had not been able to afford the significant cost (each 1 hour seminar cost more than $1,000). Unfortunately, due to these significant losses, Steve's lack of income, and lack of savings, he was unable to keep up with his mortgage repayments. Steve's bank foreclosed on his home and sold the property at auction for significantly less than it was worth. The property was worth $1,000,000 pre-covid and was sold at auction for $650,000. Steve is especially frustrated as he has since secured employment and if he had received the $20,000 in dividends he was expecting, his house would have been safe. Steve is furious and wishes to sue Bill for providing negligent advice. Advise Steve as to his prospects in a claim for negligence against Bill for the losses incurred as a result of the Super Duper Fund, the cryptocurrency advice, and the sale of Steve's house. In your answer, you should use the ILAC method as taught in workshops, and refer to the relevant provisions of the Civil Liability Act 2003 (Qld) as well as the supporting common law. You should discuss all three (3) elements of negligence and consider possible defences. You only need to discuss Bill's potential liability under the tort of negligence. You do not need to discuss any liability under contract law, or any other causes of action. Extra help: Web LAW: Statute: Civil Liability Act 2003 (OLD) Common Law s.11(1) - Defendants conduct caused harm MLC v Evatt - Three step test for owing a s.11 (1) (a) - Factual causation duty of care s. 11 (1) (6) - Scope of liability Mohr v Cleaver - The environment in which s.20 - Definition of professional advice was given s.22 - Professional breach of duty Hedley Byrne v Heller - Presence or absence of special skill by defendant Limitations of Actions Act 1974 (OLD) Shaddock v Parramatta City Council - Advice specifically asked for / Alternative source of advice San Sebastian v NSW Planning Authority - advice specifically asked for Mules v Ferguson - "but for test The "Wagon Mound" Case - Damages reasonably foreseeable LAW Template Breach of Duty Section 9(1) CLA: A person does not breach a duty to take precautions against a risk of harm unless a) the risk was foreseeable (that is, it is a risk of which the person knew or ought reasonably to have known), and b) the risk was not insignificant; and c) in the circumstances, a reasonable person in the position of the person would have taken the precautions Section 9(2) CLA: In deciding whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (among other relevant things) - d) the probability that the ham would occur if care were not taken (Bolton); e) the likely seriousness of the harm (Paris), and the burden of taking precautions to avoid the risk of harm (Woods). | Application/ Arguments / Analysis: *This should be extended prose written in paragraph form** You can separate by headings such as issue 1, issue 2, etc, but the point is this is where you write at length about the law and how it applies to the question you are given (and is where we test if you know and understand the course content). Be Aware that this section accounts for roughly half of your grade. Come up with arguments as to why you think the legal issues would be resolved (or a court would rule) in a certain way. Another way to think about this is to apply the law (cases/ legislation) to the factual scenario given. It is expected that this will form a significant portion of your answer. - Explain each of the relevant sections and cases; and then - Apply those sections and cases to the facts. Marking Rubric for Hypothetical ILAC Question: Criteria Excellent Very Good Good Satisfactory Un satisfactory IDENTIFICATION OF LEGAL ISSUES: The student has The student has The student has The student has The student has failed Identify the legal issues in the accurately and identified all of the identified most but identified some of to identify most of the hypothetical Separate major issues succinctly identified issues and sub not all of the issues the issues and sub issues and sub-issues into a number of sub-issues where al of the issues and issues confronting and sub-issues issues confronting confronting the parties appropriate. (4 marks) Sub-issues the parties so as to confronting the the parties so as to so as to resolve the confronting the resolve the problem. parties so as to resolve the problem. problem parties so as to resolve the problem resolve the problem IDENTIFICATION AND Identification and Identification and Identification and Identification and Very limited UNDERSTANDING OF RELEVANT understanding of all understanding of understanding of understanding of identification and LAW: Students are only required to of the relevant law to largely all relevant most of the relevant some of the relevant understanding of the provide the case name(s). In addition, resolve the legal law to resolve the law to resolve the law to resolve the relevant law to relevant Section numbers of the problem. Extensive legal problem. legal problem. Some legal problem. Some resolve the legal legislation and the key words of the evidence of research Substantial evidence evidence of research evidence of research problem. Very limited legal principles provided in to identify relevant of research to idently to identify relevant to identify relevant or no evidence of cases/sections of the legislation. (7 cases and/or relevant cases and/or cases and/or cases andor legal research beyond marks) legislation legislation legislation legislation the course materials APPLICATION: Apply each legal Excellent application High standard of Reasonable Satisfactory standard Failure to principle to resolve the issues identified of the low to the application of the low standard of in applying the law to demonstrate a In the question Explain the legal question. Arguments to the question application in the question satisfactory standard principle from the sections of the are excellent in Arguments are applying the low to Arguments often lack in applying the law to legislation and/or cases briefly. Apply terms of logical generally clear and the question. Some clarity and the question. each legal principle to the question and development, clarity persuasive. arguments lack persuasiveness. Arguments are use the facts to explain why the and persuasiveness darity and unclear or not element is or is not satisfied. (15 persuasiveness persuasive marks) CONCLUSION Give a condusion The condusion The conclusion The conclusion The conclusion The conclusion does which resolves each of the issues discuses all of the generally discuses al discuses most of the discuses some of the not discuss any identified earlier and discuss the appropriate the relevant relevant remedies relevant remedies remedies. No links remedies available to the parties. (4 remedies accurately remedies. Clear links Clear links can be Few links are are established marks) Clear and concise are established identified with some established between between the legal links are established between the legal difficulty between the legal issues and issues and the between the legal Issues and the the legal issues and the conclusion, but conclusion issues and the condusion the conclusion they are ambiguous. conclusion ---- USING THE PROVIDED TEMPLATE AND MARKING RUBRIC, IMPROVE AND EXTEND YOUR ANSWER BELOW. --- Issue In recent years, development in technology and creativity has continued to evolve globally, transforming the attitude of investors and financial planners as well. According to Nolan, a circumstance in which a person behaves in a reckless way that results in injury to someone else is seen as negligence. Bill is also irresponsible in providing Steve financial advice on the Super Duper Fund without extensive analysis being carefully conducted. In addition, Bill's legal responsibility is to do research and advise on the growth of financial resources and risks to clients. As a result, Bill fails to advise Steve; a loyal customer year, but gives bad advice on cryptocurrencies that motivates Steve to invest in this new sector. However, if Bill did not break the civil obligation, losses suffered by Steve may have been stopped. Law Under the negligence statute, a party causing injury incurred by the carelessness of another person can be sued for damages to pay for the damages. Moreover, to decide whether neglect happened, this statute is analyzed in general terms after obligation, violation, causation, and injury models. In addition, without violating the obligation or behaving in an omission way that results in damages, a person must exercise fair consideration for others. Every fairly, probable outcome as a result of an individual's omission of another is ultimately tried in a court of law. Application According to the rule of neglect, when telling Steve about the Super Duper Fund purchase, Bill refused to exercise his legal duty of care. In addition, by offering constructive guidance without evidence or analysis on cryptocurrency investing, Bill ignored the legal requirement, causing Steve suffer a significant loss over the investment created. Similarly, because he didn't do adequate homework, Bill's actions are irresponsible as a financial planner. Therefore, because it was His suggestion that contributed to Steve's bad investment causing monetary damages, Bill should therefore be responsible for loss of Steve's home. Conclusion In conclusion, it is Bill's moral responsibility to provide fair and legal financial advice to Steve when keeping the evolving financial market into account. Bill should, however, at least be able to save Steve's house due to his bad financial advice