Legal Services Bill [HL]

House of Commons

Session 2006 - 07
Internet Publications
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)
257

(15)
This section is subject to any provision to the contrary made by or
under any enactment.”
67
In section 80 (powers to act on behalf of Society)—
(a)
in subsection (1) for “of any instrument made under it” substitute
“any other enactment (or of any instrument made under this Act or
5
any other enactment)”, and
(b)
omit subsection (2).
68
Omit sections 81 and 81A (administration of oaths and taking of affidavits).
69
Before section 87 (interpretation) insert—
“86A
Rules
10
(1)
Rules made by the Society under this Act may —
(a)
make provision generally or subject to exceptions or only in
relation to specified cases;
(b)
make different provision for different cases or circumstances
or for different purposes.
15
(2)
Without prejudice to the generality of subsection (1), any rules
prescribing a fee may provide for that fee to be reduced or waived in
such circumstances as may be specified in the rules.”
70
In section 87(1) (interpretation)—
(a)
in the definition of “client account”, for “in” to the end substitute
20
“subject to rules under section 32(1)(a)”, and
(b)
omit the following definitions—
“articles”
“controlled trust”
“duly certificated notary public”
25
“employee”
“indemnity conditions”
“replacement date”
“training conditions”.
71
In section 89 (consequential amendments etc.), omit subsection (7).
30
72    (1)
Schedule 1 (intervention in solicitor’s practice) is amended as follows.
      (2)
In paragraph 1 (grounds for intervention)—
(a)
in sub-paragraph (1)(a)—
(i)
for “Council have” substitute “Society has”, and
(ii)
after “solicitor’s practice” insert “or former practice”,
35
(b)
after that sub-paragraph insert—
“(aa)
the Society has reason to suspect dishonesty on the
part of a solicitor (“S”) in connection with—
(i)
the business of any person of whom S is or
was an employee, or of any body of which
40
S is or was a manager, or
(ii)
any business which is or was carried on by
S as a sole trader;”,
(c)
in sub-paragraph (1)(b)—
(i)
for “Council consider” substitute “Society considers”, and
45

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 1 — The Solicitors Act 1974 (c. 47)
258

(ii)
for “controlled trust” substitute “trust”,
(d)
in sub-paragraph (1)(c) for “Council are” substitute “Society is”,
(e)
in sub-paragraph (1)(ee)—
(i)
for “Council are” substitute “Society is”, and
(ii)
after “illness” insert “, injury”,
5
(f)
in sub-paragraph (1)(h)—
(i)
for “Council are” substitute “Society is”, and
(ii)
omit “sole”,
(g)
in sub-paragraph (1)(i) and (k) for “Council are” substitute “Society
is”,
10
(h)
in sub-paragraph (1)(l)—
(i)
for “Council are” substitute “Society is”,
(ii)
in sub-paragraph (iii) for “an officer” substitute “a manager”,
and
(iii)
in that sub-paragraph for “Council of the Law Society”
15
substitute “Society”,
(i)
after sub-paragraph (1)(l) insert—
“(m)
the Society is satisfied that it is necessary to exercise
the powers conferred by Part 2 of this Schedule (or
any of them) in relation to a solicitor to protect—
20
(i)
the interests of clients (or former or
potential clients) of the solicitor or his firm,
or
(ii)
the interests of the beneficiaries of any trust
of which the solicitor is or was a trustee.”,
25
(j)
after sub-paragraph (1) insert—
   “(1A)
In sub-paragraph (1) “manager” has the same meaning as
in the Legal Services Act 2007 (see section 208 of that Act).”,
and
(k)
omit sub-paragraph (2).
30
      (3)
In paragraph 3 (intervention following an undue delay)—
(a)
for “10(3)” substitute “10(9)”,
(b)
in paragraph (a)—
(i)
for “a complaint is made to the Society” substitute “the
Society is satisfied”,
35
(ii)
for “was instructed” substitute “is or was acting”, and
(iii)
for “controlled trust” substitute “trust”, and
(c)
in paragraph (c) for “Council regard” substitute “Society regards”.
      (4)
In paragraph 4(2) (continuation of powers after death etc of solicitor)—
(a)
after “6(2) and (3)” insert “, 6A”,
40
(b)
for “and (5)” substitute “, (5) and (6)”, and
(c)
for “10(1)” substitute “10(2) and (7)”.
      (5)
In paragraph 6 (vesting of sums in Society)—
(a)
in sub-paragraph (1)—
(i)
for “Council pass” substitute “Society passes”,
45
(ii)
for “Council’s” substitute “Society’s”, and
(iii)
after “thereto” insert “and to rules under paragraph 6B”,

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 1 — The Solicitors Act 1974 (c. 47)
259

(b)
in sub-paragraph (2)(a) after “practice” insert “or former practice”,
and
(c)
in sub-paragraph (2)(c) for “to which the complaint relates”
substitute “in connection with which the Society is satisfied there has
been undue delay as mentioned in sub-paragraph (a) of that
5
paragraph”.
      (6)
After paragraph 6 insert—
“6A   (1)
Without prejudice to paragraph 5, if the Society passes a
resolution to the effect that any rights to which this paragraph
applies shall vest in the Society, those rights shall vest accordingly.
10
      (2)
This paragraph applies to any right to recover or receive debts due
to the solicitor or his firm in connection with his practice or former
practice.
      (3)
Any sums recovered by the Society by virtue of the exercise of
rights vested under sub-paragraph (1) shall vest in the Society and
15
shall be held by it on trust to exercise in relation to them the
powers conferred by this Part of this Schedule and, subject to those
powers and to rules under paragraph 6B, upon trust for the
persons beneficially entitled to them.
      (4)
The Society shall serve on the solicitor or his firm, and any person
20
who owes a debt to which the order applies, a certified copy of the
Society’s resolution.
6B    (1)
The Society may make rules governing its treatment of sums
vested in it under paragraph 6 or 6A(3).
      (2)
The rules may in particular make provision in respect of cases
25
where the Society, having taken such steps to do so as are
reasonable in all the circumstances of the case, is unable to trace
the person or persons beneficially entitled to any sum vested in the
Society under paragraph 6 or 6A(3) (including provision which
requires amounts to be paid into or out of compensation funds
30
(within the meaning of section 36A)).”
      (7)
In paragraph 7(1) (holding of sums vested in Society)—
(a)
after “paragraph 6” insert “or 6A(3)”, and
(b)
after “thereto” insert “and to rules under paragraph 6B”.
      (8)
In paragraph 8 (information as to money held) for “holds money” to the end
35
substitute—
“(a)
holds money on behalf of the solicitor or his firm, or
(b)
has information which is relevant to identifying any
money held by or on behalf of the solicitor or his firm,

the court may require that person to give the Society information
40
as to any such money and the accounts in which it is held.”
      (9)
In paragraph 9 (documents)—
(a)
in sub-paragraph (1)(a)—
(i)
after “possession” insert “or under the control”, and
(ii)
for “or with any controlled trust” substitute “or former
45
practice or with any trust of which the solicitor is or was a
trustee”,

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 1 — The Solicitors Act 1974 (c. 47)
260

(b)
in sub-paragraph (1)(b)—
(i)
after “possession” insert “or under the control”, and
(ii)
for “to which the complaint relates” substitute “of which the
Society is satisfied”,
(c)
in sub-paragraph (3) after “possession” insert “or control”,
5
(d)
in sub-paragraph (5) after “the possession” insert “or under the
control”,
(e)
after sub-paragraph (5) insert—
   “(5A)
In the case of a document which consists of information
which is stored in electronic form, a requirement imposed
10
by a notice under sub-paragraph (1) or an order under sub-
paragraph (4) or (5), is a requirement to produce or deliver
the information in a form in which it is legible or from
which it can readily be produced in a legible form.”,
(f)
in sub-paragraph (6) after “possession of” insert “(a)”,
15
(g)
at the end of that sub-paragraph insert—
“(b)
any property—
(i)
in the possession of or under the control of
the solicitor or his firm, or
(ii)
in the case of an order under sub-paragraph
20
(5), which was in the possession or under
the control of such a person and has come
into the possession or under the control of
the person in respect of whom the order is
made,
25

which the Society reasonably requires for the
purpose of accessing information contained in such
documents,

and to use property obtained under paragraph (b) for that
purpose.”,
30
(h)
in sub-paragraph (7) after “documents” insert “or other property”,
(i)
in sub-paragraph (8) after “documents” insert “or other property”,
and
(j)
in sub-paragraph (10) after “documents” insert “or other property”.
     (10)
For paragraph 10 (mail) substitute—
35
“Mail and other forms of communication
10    (1)
The High Court, on the application of the Society, may from time
to time make a communications redirection order.
      (2)
A communications redirection order is an order that specified
communications to the solicitor or his firm are to be directed, in
40
accordance with the order, to the Society or any person appointed
by the Society.
      (3)
For the purposes of this paragraph—
(a)
“specified communications” means communications of
such description as are specified in the order;
45
(b)
the descriptions of communications which may be so
specified include—

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 1 — The Solicitors Act 1974 (c. 47)
261

(i)
communications in the form of a postal packet;
(ii)
electronic communications;
(iii)
communications by telephone.
      (4)
A communications redirection order has effect for such time not
exceeding 18 months as is specified in the order.
5
      (5)
Where a communications redirection order has effect, the Society
or the person appointed by the Society may take possession or
receipt of the communications redirected in accordance with the
order.
      (6)
Where a communications redirection order is made, the Society
10
must pay to—
(a)
in the case of an order relating to postal packets, the postal
operator concerned, and
(b)
in any other case, the person specified in the order,

the like charges (if any) as would have been payable for the
15
redirection of the communications to which the order relates if the
addressee had permanently ceased to occupy or use the premises
or other destination of the communications and had applied to the
postal operator or the specified person (as the case may be) to
redirect the communications to him as mentioned in the order.
20
      (7)
The High Court may, on the application of the Society, authorise
the Society, or a person appointed by it, to take such steps as may
be specified in the order in relation to any website purporting to
be or have been maintained by or on behalf of the solicitor or his
firm if the High Court is satisfied that the taking of those steps is
25
necessary to protect the public interest or the interests of clients (or
potential or former clients) of the solicitor or his firm.
      (8)
In this paragraph—
“postal operator” has the meaning given by section 125(1) of
the Postal Services Act 2000;
30
“postal packet” has the meaning given by section 125(1) of the
Postal Services Act 2000.
      (9)
This paragraph does not apply where the powers conferred by this
Part of this Schedule are exercisable by virtue of paragraph 3.”
     (11)
In paragraph 11(1) (trusts) for “controlled trust” substitute “trust”.
35
     (12)
In paragraph 12 (liens) for “and documents” substitute “, documents and
other property”.
     (13)
After paragraph 13 (costs) insert—
“13A  (1)
The High Court, on the application of the Society, may order a
former partner of the solicitor to pay a specified proportion of the
40
costs mentioned in paragraph 13.
      (2)
The High Court may make an order under this paragraph only if
it is satisfied that the conduct (or any part of the conduct) by
reason of which the powers conferred by this Part were exercisable
in relation to the solicitor was conduct carried on with the consent
45
or connivance of, or was attributable to any neglect on the part of,
the former partner.

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 2 — The Administration of Justice Act 1985 (c. 61)
262

      (3)
In this paragraph “specified” means specified in the order made
by the High Court.”
73
Omit Schedule 1A (inadequate professional services).
74
Omit Schedule 2 (the compensation fund).
Part 2
5
The Administration of Justice Act 1985 (c. 61)
75
The Administration of Justice Act 1985 is amended in accordance with this
Part of this Schedule.
76    (1)
Section 9 (incorporated practices) is amended as follows.
      (2)
In subsection (1)—
10
(a)
for “Council” (in both places) substitute “Society”,
(b)
in paragraph (a) for “by solicitors” to the end substitute “of legal
services bodies;”,
(c)
in paragraph (b) for “any such services” substitute “any solicitor
services or other relevant legal services”, and
15
(d)
in paragraph (c)—
(i)
for “conditions” substitute “requirements”, and
(ii)
omit “corporate”.
      (3)
In subsection (2)—
(a)
for “Council” (in both places) substitute “Society”,
20
(b)
in paragraph (a) for “are to be” to the end substitute “, or for the
renewal of such recognition, are to be made, and requiring such
applications to be accompanied by a fee of such amount as the
Society may from time to time determine;”,
(c)
after that paragraph insert—
25
“(aa)
for the manner and form in which other applications
under the rules are to be made, and requiring such
applications to be accompanied by a fee of such
amount as the Society may from time to time
determine;”,
30
(d)
for paragraphs (c) to (e) substitute—
“(c)
about the time when any recognition, or renewal of
recognition, takes effect and the period for which it is
(subject to the provisions made by or under this Part)
to remain in force;
35
(d)
for the suspension or revocation of any such
recognition, on such grounds and in such
circumstances as may be prescribed by the rules;
(e)
about the effect on the recognition of a partnership or
other unincorporated body (“the existing body”) of
40
any change in the membership of the existing body,
including provision for the existing body’s
recognition to be transferred where the existing body
ceases to exist and another body succeeds to the
whole or substantially the whole of its business;
45

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 2 — The Administration of Justice Act 1985 (c. 61)
263

(ea)
for the keeping by the Society of a register containing
the names and places of business of all bodies which
are for the time being recognised under this section,
and such other information relating to those bodies as
may be specified in the rules;
5
(eb)
for information (or information of a specified
description) on such a register to be made available to
the public, including provision about the manner in
which, and times at which, information is to be made
so available;”, and
10
(e)
after paragraph (f) insert—
“(fa)
about the education and training requirements to be
met by managers and employees of recognised
bodies;
(fb)
for rules made under any provision of the 1974 Act to
15
have effect in relation to managers and employees of
recognised bodies with such additions, omissions or
other modifications as appear to the Society to be
necessary or expedient;”.
      (4)
After subsection (2) insert—
20
“(2A)
Where the Society decides to recognise a body under this section it
must grant that recognition subject to one or more conditions if—
(a)
the case is of a kind prescribed for the purposes of this section
by rules made by the Society, and
(b)
the Society considers that it is in the public interest to do so.
25
(2B)
At any time while a body is recognised under this section the Society
may, in such circumstances as may be prescribed, direct that the
body’s recognition is to have effect subject to such conditions as the
Society may think fit.

“Prescribed” means prescribed by rules made by the Society.
30
(2C)
The conditions which may be imposed under subsection (2A) or (2B)
include—
(a)
conditions requiring the body to take specified steps that
will, in the opinion of the Society, be conducive to the
carrying on by the body of an efficient business;
35
(b)
conditions which prohibit the body from taking any specified
steps except with the approval of the Society.

“Specified” means specified in the condition.
(2D)
Rules made by the Society may make provision about when
conditions imposed under this section take effect (including
40
provision conferring power on the Society to direct that a condition
is not to have effect until the conclusion of any appeal in relation to
it).
(2E)
Section 86A of the 1974 Act applies to rules under this section as it
applies to rules under that Act.
45
(2F)
Rules under this section may contain such incidental, supplemental,
transitional or transitory provisions or savings as the Society
considers necessary or expedient.”