MODULE DESCRIPTION
This module addresses the skills and knowledge required to make decisions within a legal context. The unit of competency of this module encompasses identifying the main roles and responsibilities of key bodies in the legal system, identifying compliance requirements and developing procedures to ensure compliance. The unit has application across all sectors of the financial services industry.
UNITS OF COMPETENCY:
FNSACC403A: Make decisions in a legal context
Elements of competence
• Identify the main roles and responsibilities of the key bodies in the legal system
• Identify compliance requirements
• Develop procedures to ensure compliance
TEACHING PROGRAM
Sixty hours. Twelve (12) hours per week for one teaching block of five (5) weeks.
This subject will require a commitment of at least four (4) hours per week outside the classroom and should include reading of case law, homework tasks and assessment preparations.
COURSE REQUIREMENTS
To gain a pass in this subject, a student must
(1) Submit and satisfy the requirements of ALL assessable work,
(2) Demonstrate competency against measurable outcomes.
RESOURCES
• Barron, M.L. and Fletcher, R.J.A. Fundamentals of Business Law, McGraw
Hill Australia, 2003;
• Mann, T. Essentials of Business Law, Tertiary Press, 2001
• Pendleton, W. and Vickery, R. Australian Business Law: Principles and Applications, Prentice Hall, 2000;
• Reading of newspapers and publications such as the Age, Financial Review, BRW, etc. will also provide useful sources of information.
Assessment methods and tasks
Methods of assessment Through consultation with industry, the following assessment methods have been deemed appropriate for this unit.
Assessment 1 Test Learners are required to answer questions using their Knowledge regarding courts and tribunals. The roles and functions of Courts and Tribunals, and staff. Topics related to Statue law, Case law, Law of tort, Consumer protection law and Issues related to Negligence will be covered.
The Test covers all the topics till week 3 (Including week 3)
Assessment 2 Learners are required to respond to a range of questions related to the case specify the breaches made by the directors in relation to their duty and issues related to breaches in relation to AASB and Corporate and Commercial law 2001.
The case involves analysis and students are expected to use their knowledge and understanding to law to answer the case.
The case is due in week - 4
Assessment 3 -
Test Learners are required to answer the questions - MCQs and Short answer question and Long answer questions in a given time frame. The questions are based on the knowledge of Corporate law, specifically director's duties, negligence and breaches. Contract law and discharge of contract is an integral component of assessment. Students are advised to cover all topics from week 1 to week 5
ASSESSMENT
Class Assessment 1 Week 3 35%
Group Assignment Week 4 30%
Class Assessment 2 Week 5 35%
COMPETENCY ASSESSMENT GRID
FNSACC403A Make decisions within a legal content Ass. 1 Ass. 2 Ass. 3
Identify the main roles and responsibilities of the key bodies in the legal system v v
Identify compliance requirements v v v
Develop procedures to ensure compliance v v
Weekly Schedule
Week Topics
1
Sources of Australian Law
Legal Terminology
Courts and Tribunals
Typical roles and functions of legal support staff
Statute Law, Case Law and their applications
2
Law of Torts
Business structures
Consumer protection legislation in Australia
3
Negotiable Documents
Trade Practices Act
Class Assessment -1 TEST
4
Law of Contract
Types of contracts
Group assignment due -2
5
Essentials of a contract
Discharge of a contract
Class Assessment, - 3 TEST
ASSIGNMENT - 2 Individual Assignment Case study:
Students are to research this case. All information is available on the internet (DO NOT PLAGIARISE). This assignment has a value of 30% of the total assessment for this module.
Trio masked sick FAI, says Crown
By Anne Lampe
September 13, 2005
Three former senior executives of FAI General Insurance entered into a series of financial reinsurance arrangements that effectively overstated the company's 1998 profit and gave the false impression it was adequately reserved, thus deceiving investors and its auditor, the NSW Supreme Court heard yesterday.
Crown prosecutor Stephen Rushton, SC, said at the opening of the trial of Daniel Wilkie, Timothy Mainprize and Stephen Burroughs that the reinsurance transactions gave the impression real risk had been transferred by FAI to re-insurers when, in fact, it had not.
As a result of the transactions, FAI reported a profit of $8.6 million in the 1998 financial year when it had actually incurred a loss of $19.1 million.
Wilkie, FAI's former chief operating officer, has pleaded not guilty to two charges of dishonesty as an officer of a company and one of misleading FAI's auditor Arthur Andersen in relation to three transactions.
Mainprize, FAI's former chief financial officer, pleaded not guilty to the same three charges in relation to the same transactions. Burroughs, FAI's former reinsurance manager, has pleaded not guilty to one charge of dishonesty as an officer of FAI.
The charges arose out of the HIH royal commission, which flushed out a number of allegedly sham reinsurance arrangements by both HIH and FAI.
The trial of the trio, which is expected to last for three months, will involve evidence from 40 witnesses, including videolink evidence from Hong Kong and the UK, and will feature a vast volume of documents.
The first transaction forming the basis of one charge each for Wilkie and Mainprize is that between March 1 and May 6, 1998, they failed to act honestly in their duties as company officers by entering into a reinsurance arrangement with General Cologne Reinsurance Australia, under which FAI agreed to pay a premium of $67.5 million in return for a maximum $65 million reinsurance benefit. It is claimed the transaction was structured so as to deliberately conceal the company's true loss situation from claims.
The second charge deals with the period between June 23 and June 26, 1998 when
Wilkie and Mainprize entered into a second reinsurance arrangement with General Cologne Re under which FAI paid a premium of $89.7 million in order to maintain a maximum reinsurance benefit of $87 million, and it allegedly was structured to conceal its effect.
The third is that between June 26 and September 9, 1998 the two men entered into another reinsurance contract with General Cologne Re involving a $12.5 million premium under which FAI would receive nothing in the form of reinsurance recovery.
The charge laid against Burroughs is that he failed to act honestly as a company officer and deceived auditors in relation to the $12.5 million reinsurance premium for which there was no reinsurance benefit.
Mr Rushton claimed that the three men conspired to -dupe- the auditor in relation to the transfer of risk. The auditor, he said, would not have signed FAI's 1998 accounts if he had known of the true nature of the -reinsurance- arrangement.
A stream of actuaries, FAI board members, accountants and reinsurance executives are to give evidence.
Mr Rushton said the theme common to each of the three accused is that they participated in a common plan or -criminal enterprise- and took steps to mask the true nature of the profit and loss picture of FAI.
The trial continues.
THE TRIAL AT A GLANCE
- Former FAI executives Daniel Wilkie, Timothy Mainprize and Stephen Burroughs plead not guilty to charges of dishonesty and deceiving auditors
- Charges relate to reinsurance arrangements for which premiums were paid in excess of potential reinsurance payments
- The effect was that FAI recorded an $8.6m profit in 1998 instead of a loss of almost $20m
- Forty witnesses to be called
Required;
• Identify the directors who were involved with this case.
• What were they charged with and why (what were the breaches)?
• Discuss why charges were applied when, as a registered company, legally it is a separate legal entity. Discuss what a separate legal entity is.
• What did the senior executives (named in the case study) breach in respect to corporate law?
• What were the penalties for the perpetrators? Were these penalties at the maximum for such offences? State why for each.
This assignment is to be prepared in a report format using Harvard style.