Legal Services Bill [HL]

House of Commons

Session 2006 - 07
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Other Bills before Parliament

Legal Services Bill [HL]

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 1 — The Solicitors Act 1974 (c. 47)
243

(iii)
no manager or employee of a recognised body shall
employ or remunerate that person in connection with
the business of that body,

except in accordance with a Society permission;
(b)
that as from the specified date no recognised body or
5
manager or employee of such a body shall, except in
accordance with a Society permission, permit the person with
respect to whom the order is made to be a manager of the
body;
(c)
that as from the specified date no recognised body or
10
manager or employee of such a body shall, except in
accordance with a Society permission, permit the person with
respect to whom the order is made to have an interest in the
body.
(2A)
The Society may make regulations prescribing charges to be paid to
15
the Society by persons who are the subject of an investigation by the
Society as to whether there are grounds for the Society—
(a)
to make an order under subsection (2), or
(b)
to make an application to the Tribunal for it to make such an
order.
20
(2B)
Regulations under subsection (2A) may—
(a)
make different provision for different cases or purposes;
(b)
provide for the whole or part of a charge payable under the
regulations to be repaid in such circumstances as may be
prescribed by the regulations.
25
(2C)
Any charge which a person is required to pay under regulations
under subsection (2A) is recoverable by the Society as a debt due to
the Society from the person.”
      (3)
In subsection (5) omit—
(a)
“by any solicitor”, and
30
(b)
the words from “but” to the end.
      (4)
After that subsection insert—
“(5A)
In this section—
“manager”, in relation to a recognised body, has the same
meaning as it has in relation to a body in the Legal Services
35
Act 2007 (see section 208 of that Act);
“recognised body” means a body recognised under section 9 of
the Administration of Justice Act 1985;
“specified date” means such date as may be specified in the
order;
40
“Society permission” means permission in writing granted by
the Society for such period and subject to such conditions as
the Society may think fit to specify in the permission.
(5B)
A person has an interest in a recognised body for the purposes of this
section if the person has an interest in shares in that body within the
45
meaning of Part 5 of the Legal Services Act 2007 (see sections 72 and
109 of that Act).”
39
In section 44 (offences in connection with orders under section 43(2))—

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 1 — The Solicitors Act 1974 (c. 47)
244

(a)
for subsection (1) substitute—
“(1)
It is an offence for a person in respect of whom there is in
force an order under section 43(2) which contains provision
within section 43(2)(a)—
(a)
to seek or accept any employment or remuneration
5
from a solicitor in connection with the practice carried
on by that solicitor, without previously informing the
solicitor of the order;
(b)
to seek or accept any employment or remuneration
from a recognised body, or a manager or employee of
10
a recognised body, in connection with that body’s
business, without previously informing the body, or
manager or employee, of the order.
(1A)
It is an offence for a person in respect of whom there is in
force an order under section 43(2) which contains provision
15
within section 43(2)(b) to seek or accept a position as a
manager of a recognised body, without previously informing
that body of the order.
(1B)
It is an offence for a person in respect of whom there is in
force an order under section 43(2) which contains provision
20
within section 43(2)(c) to seek or accept an interest in a
recognised body from any person, without previously
informing that person and (if different) the recognised body
of the order.
(1C)
A person guilty of an offence under subsection (1), (1A) or
25
(1B) is liable on summary conviction to a fine not exceeding
level 3 on the standard scale.”,
(b)
in subsection (2) for “the employment of that person” substitute “the
taking of any action”, and
(c)
after subsection (4) insert—
30
“(5)
In this section—
“manager” has the same meaning as in section 43;
“recognised body” means a body recognised under
section 9 of the Administration of Justice Act 1985;

and for the purposes of subsection (1B) a person seeks or
35
accepts an interest in a recognised body if the person seeks or
accepts an interest which if it were obtained by the person
would result in the person having an interest in shares in that
body within the meaning of Part 5 of the Legal Services Act
2007 (see sections 72 and 109 of that Act).”
40
40
For section 44B (examination of files) substitute—
“44B
Provision of information and documents by solicitors etc
(1)
The Society may by notice require a person to whom this section
applies—
(a)
to provide information, or information of a description,
45
specified in the notice, or
(b)
produce documents, or documents of a description, specified
in the notice.

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 1 — The Solicitors Act 1974 (c. 47)
245

(2)
This section applies to—
(a)
a solicitor;
(b)
an employee of a solicitor;
(c)
a recognised body;
(d)
an employee or manager of, or a person with an interest in
5
shares in, a recognised body.
(3)
The Society may give a notice under this section only if it is satisfied
that it is necessary to do so for the purpose of investigating—
(a)
whether there has been professional misconduct by a
solicitor;
10
(b)
whether a solicitor has failed to comply with any
requirements imposed by or by virtue of this Act or any rules
made by the Society;
(c)
whether a recognised body, or any of its managers or
employees has failed to comply with any requirement
15
imposed by or by virtue of the Administration of Justice Act
1985 or any rules made by the Society and applicable to the
body, manager or employee by virtue of section 9 of that Act;
(d)
whether there are grounds for making, or making an
application to the Tribunal for it to make, an order under
20
section 43(2) with respect to a person who is or was involved
in a legal practice (within the meaning of section 43(1A)).
(4)
A notice under this section—
(a)
may specify the time and place at which, and manner and
form in which, the information is to be provided or document
25
is to be produced;
(b)
must specify the period within which the information is to be
provided or the document produced;
(c)
may require the information to be provided or document to
be produced to the Society or to a person specified in the
30
notice.
(5)
The Society may pay to any person such reasonable costs as may be
incurred by that person in connection with the provision of any
information, or production of any document, by that person
pursuant to a notice under this section.
35
(6)
Paragraphs 9(3) and (4) and 13, 15 and 16 of Schedule 1 apply in
relation to the powers to obtain information conferred by this
section, but for this purpose paragraph 9 of that Schedule has effect
as if—
(a)
in sub-paragraph (3) for “such documents” there were
40
substituted “information to which a notice given to him
under section 44B applies”,
(b)
in that sub-paragraph for “sub-paragraph (1)” there were
substituted “the notice”, and
(c)
in sub-paragraph (4) for “produce” (in the first place) to the
45
end there were substituted “provide information pursuant to
a notice under section 44B to provide the information to any
person appointed by the Society at such time and place as
may be specified in the order.”

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 1 — The Solicitors Act 1974 (c. 47)
246

(7)
Paragraphs 9 (other than sub-paragraphs (1) and (3)), 12, 13, 15 and
16 of Schedule 1 apply in relation to the powers to obtain documents
conferred by this section as they apply in relation to the powers
conferred by paragraph 9(1) of that Schedule, except that for this
purpose—
5
(a)
any reference in paragraph 9 of that Schedule to a person
appointed, or to a requirement, under sub-paragraph (1) of
that paragraph is to be construed as a reference to a person
appointed, or to a requirement to produce documents, under
this section,
10
(b)
any reference in that paragraph to any such documents as are
mentioned in paragraph 9(1) of that Schedule is to be
construed as a reference to any documents to which a notice
under this section applies,
(c)
the reference to the solicitor or his firm in paragraph 9(5) of
15
that Schedule, and the reference to the solicitor or personal
representative in paragraph 9(7) of that Schedule, are to be
construed as references to the person to whom the notice was
given under this section, and
(d)
the reference in paragraph 9(12) of that Schedule to the
20
Society is to be construed as including a reference to a person
specified under subsection (4)(c).
(8)
In this section—
“manager” has the same meaning as in the Legal Services Act
2007 (see section 208 of that Act);
25
“recognised body” means a body recognised under section 9 of
the Administration of Justice Act 1985;

and the reference to a person who has an interest in shares in a
recognised body is to be construed in accordance with sections 72
and 109 of the Legal Services Act 2007.
30
44BA
Power to require explanation of document or information
(1)
The Society may, by notice, require a person to whom a notice is
given under section 44B (or a representative of the person) to attend
at a time and place specified in the notice to provide an explanation
of any information provided or document produced pursuant to the
35
notice.
(2)
The Society may pay to any person such reasonable costs as may be
incurred by that person in connection with that person’s compliance
with a requirement imposed under subsection (1).
(3)
Paragraphs 9(3) and (4) and 13, 15 and 16 of Schedule 1 apply in
40
relation to a notice under this section, except that for this purpose
paragraph 9 of that Schedule has effect as if—
(a)
in sub-paragraph (3) for “having” to “sub-paragraph (1)”
there were substituted “refuses, neglects or otherwise fails to
comply with a requirement under section 44BA(1)”, and
45
(b)
in sub-paragraph (4) for “produce” (in the first place) to the
end there were substituted “provide an explanation of any
information provided or document produced pursuant to a
notice under section 44B (or a representative of such a
person) to attend at a time and place specified in the order to
50

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 1 — The Solicitors Act 1974 (c. 47)
247

provide an explanation of any information so provided or
document so produced.”
44BB
Provision of information and documents by other persons
(1)
The High Court, on the application of the Society, may order a
person to whom section 44B does not apply—
5
(a)
to provide information, or information of a description,
specified in the notice, or
(b)
to produce documents, or documents of a description,
specified in the notice.
(2)
The High Court may make an order under this section only if it is
10
satisfied—
(a)
that it is likely that the information or document is in the
possession or custody of, or under the control of, the person,
and
(b)
that there is reasonable cause to believe that the information
15
or document is likely to be of material significance to an
investigation into any of the matters mentioned in section
44B(3)(a) to (d).
(3)
An order under this section may direct the Society to pay to a person
specified in the order such reasonable costs as may be incurred by
20
that person in connection with the provision of any information, or
production of any document, by that person pursuant to the order.
(4)
Section 44B(4) applies in relation to an order under this section as it
applies in relation to a notice under section 44B.
(5)
Paragraphs 9(5A) and (7) to (12), 12, 13, 15 and 16 of Schedule 1 apply
25
in relation to an order under this section as they apply in relation to
an order under paragraph 9(4) of that Schedule, except that for this
purpose—
(a)
the reference to the solicitor or personal representative in
paragraph 9(7) of that Schedule is to be construed as a
30
reference to the person in respect of whom the order under
this section is made, and
(b)
the reference in paragraph 9(12) of that Schedule to the
Society is to be read as including a reference to a person
specified under section 44B(4)(c) (as applied by subsection (4)
35
of this section).
44BC
Information offences
(1)
It is an offence for a person who knows or suspects an investigation
into any of the matters mentioned in section 44B(3)(a) to (d) is being
or is likely to be conducted—
40
(a)
to falsify, conceal, destroy or otherwise dispose of a
document which the person knows or suspects is or would be
relevant to the investigation, or
(b)
to cause or permit the falsification, concealment, destruction
or disposal of such a document.
45
(2)
In proceedings for an offence under subsection (1) it is a defence for
the accused to show that the accused had no intention of concealing

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 1 — The Solicitors Act 1974 (c. 47)
248

facts disclosed by the documents from the person conducting the
investigation.
(3)
It is an offence for a person, in purported compliance with a
requirement imposed on the person under section 44B, 44BA or
44BB—
5
(a)
to provide information which the person knows to be false or
misleading in a material particular, or
(b)
recklessly to provide information which is false or
misleading in a material particular.
(4)
A person who is guilty of an offence under subsection (1) or (3) is
10
liable—
(a)
on summary conviction, to imprisonment for a term not
exceeding 12 months or a fine not exceeding the statutory
maximum, or both;
(b)
on conviction on indictment, to imprisonment for term not
15
exceeding 2 years or a fine, or both.
(5)
In relation to an offence under subsection (1) or (3) committed before
the commencement of section 154(1) of the Criminal Justice Act 2003
the reference in subsection (4)(a) to 12 months is to be read as a
reference to 6 months.”
20
41
For section 44C (payment of costs of investigations) substitute—
“44C
Power to charge for costs of investigations
(1)
The Society may make regulations prescribing charges to be paid to
the Society by solicitors who are the subject of a discipline
investigation.
25
(2)
A “discipline investigation” is an investigation carried out by the
Society into—
(a)
possible professional misconduct by a solicitor, or
(b)
a failure or apprehended failure by a solicitor to comply with
any requirement imposed by or by virtue of this Act or any
30
rules made by the Society.
(3)
Regulations under this section may—
(a)
make different provision for different cases or purposes;
(b)
provide for the whole or part of a charge payable under the
regulations to be repaid in such circumstances as may be
35
prescribed by the regulations.
(4)
Any charge which a solicitor is required to pay under regulations
under this section is recoverable by the Society as a debt due to the
Society from the solicitor.”
42    (1)
Section 46 (solicitors disciplinary tribunal) is amended as follows.
40
      (2)
For subsection (5) substitute—
“(5)
The Tribunal may pay its members such remuneration, fees or
allowances as it may determine with the approval of the Legal
Services Board.”

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 1 — The Solicitors Act 1974 (c. 47)
249

      (3)
After that subsection insert—
“(5A)
The Tribunal may do anything calculated to facilitate, or incidental
or conducive to, the carrying out of any of its functions.”
      (4)
Omit subsections (6) to (8).
      (5)
In subsection (9)—
5
(a)
for “Subject to subsections (6) to (8), the” substitute “The”,
(b)
omit “, with the concurrence of the Master of the Rolls,”, and
(c)
in paragraph (b) after “complaints” insert “(including provision
about the composition of the Tribunal)”.
43
After that section insert—
10
“46A
Funding of the Tribunal
(1)
The Tribunal must submit to the Society in respect of each year a
budget for the year approved by the Legal Services Board.
(2)
A budget for a year is a statement of the amount of money which the
Tribunal estimates is required to enable it to meet all of its
15
expenditure in that year (having regard to any amounts received but
not spent in previous years).
(3)
Before approving a statement for the purposes of subsection (1) the
Legal Services Board must consult the Society.
(4)
The budget for a year must be submitted to the Society under
20
subsection (1) no later than the date in the preceding year specified
by the Society for the purposes of this subsection.
(5)
Before specifying a date for this purpose the Society must consult the
Tribunal.
(6)
The amount specified in a budget submitted under subsection (1)
25
must be paid by the Society to the Tribunal—
(a)
in such instalments and at such times as may be agreed
between the Society and the Tribunal, or
(b)
in the absence of such agreement, before the beginning of the
year to which the budget relates.
30
(7)
The Society may pay the Tribunal such other amounts as the Society
considers appropriate.
(8)
In this section “year” means a calendar year.”
44
In section 47 (jurisdiction and powers of Tribunal)—
(a)
in subsection (2)(c) omit “not exceeding £5,000”,
35
(b)
after subsection (3A) insert—
“(3B)
For the avoidance of doubt, nothing in this section permits
the Tribunal to make an order requiring redress to be made
in respect of any act or omission of any person.”, and
(c)
omit subsections (4) and (5).
40
45
In section 48 (orders of Tribunal), in subsection (3) for “Subject to section
43(5), any” substitute “Any”.