House of Commons portcullis
House of Commons
Session 2006 - 07
Internet Publications
Other Bills before Parliament

Legal Services Bill [HL]


Legal Services Bill [HL]
Part 4 — Regulation of approved regulators

21

 

   

the Board may recover from the approved regulator, as a debt due to the Board,

any of the penalty and any interest which has not been paid.

Intervention

41      

Intervention directions

(1)   

The Board may give an approved regulator an intervention direction in

5

relation to any of the approved regulator’s regulatory functions if the Board is

satisfied—

(a)   

that an act or omission of an approved regulator (or a series of such acts

or omissions) has had, or is likely to have, a significant adverse impact

on the regulatory objectives taken as a whole, and

10

(b)   

that, in all the circumstances of the case, it is appropriate to give the

intervention direction.

(2)   

An intervention direction, in relation to a regulatory function of an approved

regulator, is a direction—

(a)   

that the regulatory function is to be exercised by the Board or a person

15

nominated by it, and

(b)   

that the approved regulator must comply with any instructions of the

Board or its nominee in relation to the exercise of the function.

(3)   

The Board may not determine that it is appropriate to give an intervention

direction unless it is satisfied that the matter cannot be adequately addressed

20

by the Board exercising the powers available to it under sections 31 to 40.

(4)   

Part 1 of Schedule 8 makes provision about the procedure which must be

complied with before an intervention direction is given and the manner in

which such a direction is to be given.

(5)   

The Board must make rules as to the persons it may nominate for the purposes

25

of subsection (2)(a).

42      

Intervention directions: further provision

(1)   

This section applies where an intervention direction has effect in respect of a

function of an approved regulator (“the relevant function”).

(2)   

The approved regulator must give the specified person all such assistance, in

30

connection with the proposed exercise of the relevant function by the specified

person in pursuance of the direction, as the approved regulator is reasonably

able to give.

(3)   

On an application by the specified person (or a person appointed by the

specified person to act on its behalf) a judge of the High Court, Circuit judge or

35

justice of the peace may issue a warrant authorising that person to—

(a)   

enter and search the premises of the approved regulator, and

(b)   

take possession of any written or electronic records found on the

premises.

(4)   

The person so authorised may, for the purpose of the exercise by the specified

40

person of the relevant function, take copies of written or electronic records

found on a search carried out by virtue of the warrant.

 
 

Legal Services Bill [HL]
Part 4 — Regulation of approved regulators

22

 

(5)   

The judge or justice of the peace may not issue the warrant unless satisfied that

its issue is necessary or desirable for the exercise by the specified person of the

relevant function.

(6)   

The Lord Chancellor must make regulations—

(a)   

specifying further matters which a judge or justice of the peace must be

5

satisfied of, or matters which a judge or justice of the peace must have

regard to, before issuing a warrant, and

(b)   

regulating the exercise of a power conferred by a warrant issued under

subsection (3) or by subsection (4) (whether by restricting the

circumstances in which a power may be exercised, by specifying

10

conditions to be complied with in the exercise of a power, or otherwise).

(7)   

Regulations under subsection (6)(b) must in particular make provision as to the

circumstances in which written or electronic records of which a person has

taken possession by virtue of a warrant issued under subsection (3) may be

copied or must be returned.

15

(8)   

But the Lord Chancellor may not make regulations under subsection (6)

unless—

(a)   

they are made in accordance with a recommendation made by the

Board, or

(b)   

the Lord Chancellor has consulted the Board about the making of the

20

regulations.

(9)   

In this section “the specified person” means the Board or, where a person is

nominated by it as mentioned in section 41(2), that person.

(10)   

The Board must make rules as to the persons a specified person may appoint

for the purposes of subsection (3).

25

43      

Intervention directions: enforcement

(1)   

If at any time it appears to the Board that an approved regulator has failed to

comply with an obligation imposed on it by, or by virtue of, an intervention

direction or section 42(2), the Board may make an application to the High

Court under this section.

30

(2)   

If, on an application under subsection (1), the High Court decides that the

approved regulator has failed to comply with the obligation in question, it may

order the approved regulator to take such steps as the High Court directs for

securing that the obligation is complied with.

(3)   

This section is without prejudice to any other powers conferred on the Board

35

by this Part.

44      

Revocation of intervention directions

(1)   

An intervention direction has effect until such time as it is revoked by the

Board (whether on the application of the approved regulator or otherwise).

(2)   

Part 2 of Schedule 8 makes provision about the procedure which must be

40

complied with before an intervention direction is revoked and the manner in

which notice of the revocation is to be given.

 
 

Legal Services Bill [HL]
Part 4 — Regulation of approved regulators

23

 

Cancellation of approval

45      

Cancellation of designation as approved regulator

(1)   

The Lord Chancellor may by order cancel a body’s designation as an approved

regulator—

(a)   

in relation to all the reserved legal activities in relation to which it is an

5

approved regulator, or

(b)   

in relation to one or more, but not all, of those reserved legal activities,

   

with effect from a date specified in the order.

(2)   

But the Lord Chancellor may only make an order under subsection (1) in

accordance with a recommendation made by the Board under subsection (3) or

10

(5).

(3)   

The Board must recommend that an order is made cancelling a body’s

designation as an approved regulator in relation to one or more reserved legal

activities, if—

(a)   

the body applies to the Board for such a recommendation to be made,

15

(b)   

the application is made in such form and manner as may be prescribed

by rules made by the Board, and is accompanied by the prescribed fee,

and

(c)   

the body publishes a notice giving details of the application in

accordance with such requirements as may be specified in rules made

20

by the Board.

(4)   

In this section “the prescribed fee”, in relation to an application, means the fee

specified in, or determined in accordance with, rules made by the Board, with

the consent of the Lord Chancellor.

(5)   

The Board may recommend that an order is made cancelling a body’s

25

designation as an approved regulator in relation to one or more reserved legal

activities if it is satisfied—

(a)   

that an act or omission of an approved regulator (or a series of such acts

or omissions) has had, or is likely to have, a significant adverse impact

on the regulatory objectives taken as a whole, and

30

(b)   

that, in all the circumstances of the case, it is appropriate to cancel the

body’s designation in relation to the activity or activities in question.

(6)   

The Board may not determine that it is appropriate to cancel a body’s

designation in relation to an activity or activities unless it is satisfied that the

matter cannot be adequately addressed by the Board exercising the powers

35

available to it under sections 31 to 43.

(7)   

Schedule 9 makes further provision about the making of recommendations

under subsection (5).

(8)   

If the Lord Chancellor decides not to make an order in response to a

recommendation made under subsection (3) or (5), the Lord Chancellor must

40

give the Board notice of the decision and the reasons for it.

(9)   

The Lord Chancellor must publish a notice given under subsection (8).

(10)   

The Board may not make a recommendation under subsection (5) in respect of

a body’s designation as an approved regulator in relation to a reserved legal

activity at any time when, by virtue of Part 2 of Schedule 5 (protection of rights

45

 
 

Legal Services Bill [HL]
Part 4 — Regulation of approved regulators

24

 

during a transitional period), any person is being treated as authorised by the

body to carry on that activity.

46      

Cancellation of designation: further provision

(1)   

This section applies where a body (“the former regulator”) has its designation

in relation to one or more reserved legal activities cancelled by an order under

5

section 45.

(2)   

The Lord Chancellor may by order make—

(a)   

such modifications of provisions made by or under any enactment

(including this Act or any enactment passed after this Act), prerogative

instrument or other instrument or document, and

10

(b)   

such transitional or consequential provision,

   

as the Lord Chancellor considers necessary or expedient in consequence of the

cancellation.

(3)   

The Lord Chancellor may, by order, make transfer arrangements.

(4)   

“Transfer arrangements” are arrangements in accordance with which each

15

person authorised by the former regulator who consents to the arrangements

is, from the time the cancellation takes effect, treated as being authorised to

carry on each protected activity by either—

(a)   

a relevant approved regulator, in relation to the protected activity, who

consents to the transfer arrangements, or

20

(b)   

the Board acting in its capacity as a relevant approved regulator in

relation to the protected activity by virtue of an order made under

section 62.

(5)   

The transfer arrangements—

(a)   

must make such provision as is necessary to ensure that, where a

25

person is treated under those arrangements as being authorised to

carry on a protected activity by the new regulator, that person is subject

to the regulatory arrangements of the new regulator;

(b)   

may make provision requiring amounts held by the former regulator

which represent amounts paid to it by way of practising fees by the

30

persons to whom the transfer arrangements apply (or a part of the

amounts so held) to be paid to the new regulator and treated as if they

were amounts paid by those persons by way of practising fees to the

new regulator.

(6)   

Subsection (5)(a) is subject to any transitional provision which may be made by

35

the transfer arrangements, including provision modifying the regulatory

arrangements of the new regulator as they apply to persons to whom the

transfer arrangements apply.

(7)   

The Lord Chancellor may make an order under this section only if—

(a)   

the Board has made a recommendation in accordance with section 47,

40

and

(b)   

the order is in the same form as, or in a form which is not materially

different from, the draft order annexed to that recommendation.

(8)   

For the purposes of this section—

(a)   

a person is “authorised by the former regulator” if immediately before

45

the time the cancellation takes effect the person is authorised by the

former regulator (other than by virtue of a licence under Part 5) to carry

 
 

Legal Services Bill [HL]
Part 4 — Regulation of approved regulators

25

 

on an activity which is a reserved legal activity to which the

cancellation relates, and

(b)   

in relation to that person—

(i)   

the activity which that person is authorised to carry on as

mentioned in paragraph (a) is a “protected activity”, and

5

(ii)   

“the new regulator” means the approved regulator within

paragraph (a) or (b) of subsection (4).

(9)   

In this section “practising fee”, in relation to an approved regulator, means a

fee payable by a person under the approved regulator’s regulatory

arrangements in circumstances where the payment of the fee is a condition

10

which must be satisfied for that person to be authorised by the approved

regulator to carry on one or more activities which are reserved legal activities.

(10)   

But for the purposes of this section “practising fee” does not include a fee

payable by a licensed body to its licensing authority under licensing rules.

47      

The Board’s power to recommend orders made under section 46

15

(1)   

The Board may recommend to the Lord Chancellor that the Lord Chancellor

make an order under section 46 in the form of a draft order prepared by the

Board and annexed to the recommendation.

(2)   

Before making a recommendation under this section, the Board must publish a

draft of—

20

(a)   

the proposed recommendation, and

(b)   

the proposed draft order.

(3)   

The draft must be accompanied by a notice which states that representations

about the proposals may be made to the Board within a specified period.

(4)   

Before making the recommendation, the Board must have regard to any

25

representations duly made.

(5)   

If the draft order to be annexed to the recommendation differs from the draft

published under subsection (2)(b) in a way which in the opinion of the Board

is material, the Board must, before making the recommendation, publish the

draft order along with a statement detailing the changes made and the reasons

30

for those changes.

48      

Cancellation of designation: powers of entry etc

(1)   

This section applies where a body (“the former regulator”) has its designation

in relation to one or more reserved legal activities cancelled by an order under

section 45.

35

(2)   

The Board may request the former regulator to provide assistance to the new

regulator and the Board, for the purpose of continuing regulation.

(3)   

On an application by a person appointed by the Board to act on its behalf, a

judge of the High Court, Circuit judge or justice of the peace may issue a

warrant authorising that person to—

40

(a)   

enter and search the premises of the former regulator, and

(b)   

take possession of any written or electronic records found on the

premises.

 
 

Legal Services Bill [HL]
Part 4 — Regulation of approved regulators

26

 

(4)   

A person so authorised may, for the purpose of continuing regulation, take

copies of written or electronic records found on a search carried out by virtue

of the warrant.

(5)   

The judge or justice of the peace may not issue the warrant unless satisfied that

its issue is necessary or desirable for the purpose of continuing regulation.

5

(6)   

The Lord Chancellor must make regulations—

(a)   

specifying further matters which a judge or justice of the peace must be

satisfied of, or matters which a judge or justice of the peace must have

regard to, before issuing a warrant, and

(b)   

regulating the exercise of a power conferred by a warrant issued under

10

subsection (3) or by subsection (4) (whether by restricting the

circumstances in which a power may be exercised, by specifying

conditions to be complied with in the exercise of a power, or otherwise).

(7)   

Regulations under subsection (6)(b) must in particular make provision as to

circumstances in which written or electronic records of which a person has

15

taken possession by virtue of a warrant issued under subsection (3) may be

copied or must be returned.

(8)   

But the Lord Chancellor may not make regulations under subsection (6)

unless—

(a)   

they are made in accordance with a recommendation made by the

20

Board, or

(b)   

the Lord Chancellor has consulted the Board about the making of the

regulations.

(9)   

The Board must make rules as to the persons it may appoint for the purposes

of subsection (3).

25

(10)   

For the purposes of this section—

“authorised by the former regulator”, “protected activity” and “new

regulator” have the same meaning as for the purposes of section 46;

“the purpose of continuing regulation” means the purpose of enabling

persons authorised by the former regulator to continue to be authorised

30

and regulated in relation to the protected activity.

Policy statements

49      

The Board’s policy statements

(1)   

The Board must prepare and issue a statement of policy with respect to the

exercise of its functions under—

35

(a)   

section 31 (performance targets and monitoring);

(b)   

section 32 (directions);

(c)   

section 35 (public censure);

(d)   

section 37 (financial penalties);

(e)   

section 41 (intervention directions);

40

(f)   

section 45 (cancellation of designation as approved regulator);

(g)   

section 76 (cancellation of designation as licensing authority by order).

(2)   

The Board may prepare and issue a statement of policy with respect to any

other matter.

 
 

Legal Services Bill [HL]
Part 4 — Regulation of approved regulators

27

 

(3)   

Any statement of policy issued by the Board must—

(a)   

respect the principle that primary responsibility for regulation rests

with the approved regulators;

(b)   

ensure that the Board exercises its powers only where it considers that

the action or inaction of an approved regulator is not an approach

5

which the approved regulator could reasonably have taken;

(c)   

provide that, save where there is an imminent risk of significant

damage to the regulatory objectives, the Board will seek to resolve

matters informally with the approved regulator before seeking its

powers.

10

(4)   

The Board’s policy in determining what the amount of a penalty under section

37 should be must include having regard to—

(a)   

the seriousness of the failure in question, and

(b)   

the extent to which it was deliberate or reckless.

(5)   

The Board may at any time alter or replace any statement issued under this

15

section.

(6)   

If a statement is altered or replaced, the Board must issue the altered or

replacement statement.

(7)   

In exercising or deciding whether to exercise any of its functions, the Board

must have regard to any relevant policy statement published under this

20

section.

(8)   

The Board must publish a statement issued under this section.

(9)   

The Board may make a reasonable charge for providing a person with a copy

of a statement.

50      

Policy statements: procedure

25

(1)   

Before issuing a statement under section 49, the Board must publish a draft of

the proposed statement.

(2)   

The draft must be accompanied by a notice which states that representations

about the proposals may be made to the Board within a specified period.

(3)   

Before issuing the statement, the Board must have regard to any

30

representations duly made.

(4)   

If the statement differs from the draft published under subsection (1) in a way

which is, in the opinion of the Board, material, the Board must publish details

of the differences.

(5)   

The Board may make a reasonable charge for providing a person with a copy

35

of a draft published under subsection (1).

Practising fees

51      

Control of practising fees charged by approved regulators

(1)   

In this section “practising fee”, in relation to an approved regulator, means a

fee payable by a person under the approved regulator’s regulatory

40

arrangements in circumstances where the payment of the fee is a condition

 
 

 
previous section contents continue
 
House of Commons home page Houses of Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 2007
Revised 18 May 2007