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Legal Services Bill [HL]


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)

271

 

(a)   

who is disqualified from practising as a solicitor by

reason of one of the facts mentioned in section

41(1)(a), (b) or (c) of the 1974 Act (name struck off

the roll, suspension etc), or

(b)   

in respect of whom there is a direction in force

5

under section 47(2)(g) of that Act (prohibition on

restoration to roll).

      (4)  

Permission granted for the purposes of sub-paragraph (2)

may be granted for such period and subject to such

conditions as the Society thinks fit.

10

      (5)  

A person aggrieved by the refusal of the Society to grant

permission under sub-paragraph (4), or by any conditions

attached by the Society to the grant of any such permission

may appeal to the High Court which may—

(a)   

confirm the refusal or the conditions, as the case

15

may be, or

(b)   

grant a permission under this paragraph for such

period and subject to such conditions as it thinks

fit.

      (6)  

In relation to an appeal under sub-paragraph (5) the High

20

Court may make such order as it thinks fit as to payment

of costs.

      (7)  

The decision of the High Court on an appeal under sub-

paragraph (5) is final.”

92         

In paragraph 10 of that Schedule (failure to disclose striking off or

25

suspension)—

(a)   

the existing paragraph becomes sub-paragraph (1) of that paragraph,

(b)   

in that sub-paragraph after “recognised body” insert “(or any

manager or employee of such a body)”, and

(c)   

after that sub-paragraph insert—

30

    “(2)  

It is an offence for a person (“P”) to whom sub-paragraph

(3) applies—

(a)   

to seek or accept from any person an interest in a

recognised body, without previously informing

that person (and, if different, the recognised body)

35

that P is a person to whom that sub-paragraph

applies, or

(b)   

to seek or accept a position as a manager of a

recognised body, without previously informing

that body that P is such a person.

40

      (3)  

This sub-paragraph applies to a person—

(a)   

who is disqualified from practising as a solicitor by

reason of one of the facts mentioned in section

41(1)(a), (b) or (c) of the 1974 Act (name struck off

the roll, suspension etc), or

45

(b)   

in respect of whom there is a direction in force

under section 47(2)(g) of that Act (prohibition on

restoration to roll).

 

 

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)

272

 

      (4)  

A person guilty of an offence under sub-paragraph (2) is

liable on summary conviction to a fine not exceeding level

3 on the standard scale.

      (5)  

Subsection (2) of section 42 of the 1974 Act applies in

relation to an offence under sub-paragraph (2) as it applies

5

in relation to an offence under that section.

      (6)  

For the purposes of sub-paragraph (2)(a) a person seeks or

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

10

shares in that body within the meaning of Part 5 of the

Legal Services Act 2007 (see sections 72 and 109 of that

Act).”

93         

Omit paragraph 11 of that Schedule (control of employment of persons

convicted of offences of dishonesty and certain other persons).

15

94         

Omit paragraph 12 of that Schedule (offences in connection with orders

under section 43(2) of the 1974 Act).

95         

Omit paragraph 13 of that Schedule (redress for inadequate professional

services).

96         

For paragraph 14 of that Schedule (examination of files) substitute—

20

“Information about suitability for recognition

14    (1)  

The Society may give a notice under this paragraph if it is satisfied

that it is necessary to do so for the purpose of investigating

whether a recognised body continues to be suitable to be

recognised under section 9.

25

      (2)  

A notice under this paragraph is a notice which requires a person

within sub-paragraph (3)—

(a)   

to provide information, or information of a description,

specified in the notice, or

(b)   

to produce documents, or documents of a description,

30

specified in the notice.

      (3)  

The persons are—

(a)   

the recognised body;

(b)   

an employee or manager of the recognised body;

(c)   

a person who has an interest in shares in the recognised

35

body (within the meaning of the Legal Services Act 2007

(see sections 72 and 109 of that Act)).

      (4)  

For the purposes of this paragraph, section 44B(4) to (7) of the 1974

Act applies—

(a)   

in relation to a notice under this paragraph as if it were a

40

notice under section 44B of that Act, and

(b)   

in relation to a person given a notice under this paragraph

as if that person were a person given a notice under that

section,

 

 

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)

273

 

           

and references in subsections (6) and (7) of that section to powers

conferred by that section are to be read as references to powers

conferred by this paragraph.

      (5)  

Section 44BA of the 1974 Act (power to require explanation of

document or information) applies in relation to a notice under this

5

paragraph and the person to whom such a notice is given as it

applies in relation to a notice under section 44B of the 1974 Act and

the person to whom such a notice is given.

      (6)  

Subsection (1) of section 44BC of that Act (falsification of

documents etc) applies in relation to an investigation of the kind

10

mentioned in sub-paragraph (1) as it applies in relation to the

investigations mentioned in that subsection, and subsections (2),

(4) and (5) of that section apply accordingly.

      (7)  

Subsection (3) of that section (provision of false information etc)

applies in relation to a requirement imposed under this paragraph

15

as it applies in relation to a requirement imposed by section 44B of

that Act, and subsections (4) and (5) of that section apply

accordingly.”

97         

For paragraph 14A of that Schedule (payment of costs of investigations)

substitute—

20

“Power to charge for costs of investigation

14A   (1)  

The Society may make regulations prescribing charges to be paid

to the Society by recognised bodies who are the subject of a

discipline investigation.

      (2)  

A discipline investigation is an investigation carried out by the

25

Society into a failure or apprehended failure by a recognised body

to comply with any requirement imposed by or by virtue of this

Act or any rules applicable to it by virtue of section 9.

      (3)  

Regulations under this paragraph may—

(a)   

make different provision for different cases or purposes;

30

(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.

      (4)  

Any charge which a recognised body is required to pay under

regulations under this paragraph is recoverable by the Society as

35

a debt due to the Society from the recognised body.

      (5)  

This paragraph applies in relation to a manager or employee of a

recognised body as it applies in relation to a recognised body.”

98         

In paragraph 16 of that Schedule (complaints to Tribunal with respect to

recognised bodies)—

40

(a)   

in sub-paragraph (1), in paragraph (a) omit “in the United

Kingdom”,

(b)   

in paragraph (b) of that sub-paragraph for “section 34 of the 1974

Act” substitute “any requirement imposed by or by virtue of this

Act”,

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)

274

 

(c)   

for paragraph (c) of that sub-paragraph substitute—

“(c)   

a complaint that the body has acted in

contravention of section 41 of the 1974 Act or

paragraph 9(2) of this Schedule or of any

conditions subject to which a permission has been

5

granted under section 41 of that Act or that

paragraph of this Schedule; or”, and

(d)   

after that sub-paragraph insert—

   “(1A)  

The Tribunal shall have jurisdiction to hear and determine

any of the following complaints made to it under this

10

paragraph with respect to a manager or employee of a

recognised body (“the relevant person”)—

(a)   

a complaint that the relevant person has been

convicted by any court of a criminal offence which

renders that person unsuitable to be a manager or

15

employee (or both) of a recognised body;

(b)   

a complaint that the relevant person has failed to

comply with any requirement imposed by or by

virtue of this Act or any rules applicable to the

relevant person by virtue of section 9 of this Act;

20

(c)   

a complaint that the relevant person has acted in

contravention of section 41 of the 1974 Act or

paragraph 9(2) of this Schedule or of any

conditions subject to which a permission has been

granted under that section or for the purposes of

25

paragraph 9(2) of this Schedule;

(d)   

a complaint that the relevant person has knowingly

acted in contravention of an order under section

43(2) of the 1974 Act or of any conditions subject to

which a permission has been granted under such

30

an order.”

99         

In paragraph 17 of that Schedule (procedure on applications and

complaints)—

(a)   

for “(7)” substitute “(9)”,

(b)   

in paragraph (a)—

35

(i)   

omit “11(1), 15(2) or”,

(ii)   

omit “13(3) or”, and

(iii)   

after “16(1)” insert “or (1A)”, and

(c)   

in paragraph (c) after “body” insert “or, in the case of a complaint as

is mentioned in paragraph 16(1A), to a manager or employee of such

40

a body”.

100        

In paragraph 18 of that Schedule (powers of Tribunal with respect to

recognised bodies)—

(a)   

in sub-paragraph (1) after “this Schedule” insert “(other than

paragraph 16(1A)”,

45

(b)   

in paragraph (b) of that sub-paragraph for “section 34 of the 1974

Act” substitute “any requirement imposed by or by virtue of this

Act”,

(c)   

omit paragraph (d) of that sub-paragraph and the “or” immediately

preceding it,

50

 

 

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)

275

 

(d)   

in sub-paragraph (2) omit “not exceeding £3,000”, and

(e)   

omit sub-paragraphs (3) and (4).

101        

After that paragraph insert—

“18A  (1)  

Where, on the hearing of any complaint made to it under

paragraph 16(1A) of this Schedule, the Tribunal is satisfied that a

5

manager or employee of a recognised body—

(a)   

has been convicted as mentioned in paragraph (a) of

paragraph 16(1A),

(b)   

has failed to comply with any requirement imposed by or

by virtue of this Act or any rules applicable to the relevant

10

person by virtue of section 9 of this Act, or

(c)   

has acted as mentioned in paragraph (c) or (d) of

paragraph 16(1A),

           

the Tribunal may, if it thinks fit, make one or more of the orders

referred to in sub-paragraph (2).

15

      (2)  

Those orders are—

(a)   

an order directing the payment by the relevant person of a

penalty to be forfeited to Her Majesty;

(b)   

an order requiring the Society to consider taking such steps

as the Tribunal may specify in relation to the relevant

20

person;

(c)   

if the person is not a solicitor, an order which states one or

more of the matters mentioned in sub-paragraph (3);

(d)   

an order requiring the Society to refer to an appropriate

regulator any matter relating to the conduct of the relevant

25

person.

      (3)  

The matters referred to in sub-paragraph (2)(c) are—

(a)   

that as from the specified date—

(i)   

no solicitor shall employ or remunerate, in

connection with his practice as a solicitor, the

30

person with respect to whom the order is made,

and

(ii)   

no recognised body, or manager or employee of

such a body, shall employ or remunerate that

person, in connection with the business of the

35

recognised body,

   

except in accordance with a Society permission;

(b)   

that as from the specified date no recognised body or

manager or employee of such a body shall, except in

accordance with a Society permission, permit the person

40

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

manager or employee of such a body shall, except in

accordance with a Society permission, permit the person

45

with respect to whom the order is made to have an interest

in the body.

      (4)  

Subsections (1) to (1C), (3) and (4) of section 44 of the 1974 Act

(offences in connection with orders under section 43(2) of that Act)

 

 

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)

276

 

apply in relation to an order under sub-paragraph (2)(c) as they

apply in relation to an order under section 43(2) of that Act, except

that references in those subsections to provision within section

43(2)(a), (b) or (c) of that Act are to be read as references to

provision within sub-paragraph (3)(a), (b) or (c).

5

      (5)  

Section 44(2) of the 1974 Act, paragraph 16(1)(d) and (1A)(d) of

this Schedule and paragraph 15(3A) of Schedule 14 to the Courts

and Legal Services Act 1990 apply in relation to an order under

sub-paragraph (2)(c) as they apply in relation to an order under

section 43(2) of the 1974 Act.

10

      (6)  

For the purposes of sub-paragraph (2)(d) an “appropriate

regulator” in relation to the relevant person means—

(a)   

if the person is an authorised person in relation to a

reserved legal activity for the purposes of the Legal

Services Act 2007, any relevant approved regulator (within

15

the meaning of that Act) in relation to that person, and

(b)   

if the person carries on activities which are not reserved

legal activities, any body which regulates the carrying on

of such activities by the person.”

102        

In paragraph 20 of that Schedule (powers of Tribunal in respect of legal aid

20

complaints), in sub-paragraph (1)—

(a)   

for “an officer” substitute “a manager”,

(b)   

for “director” substitute “manager”, and

(c)   

for “legal aid work” substitute “providing representation funded by

the Legal Services Commission as part of the Criminal Defence

25

Service”,

           

and omit sub-paragraph (2).

103        

In paragraph 21 of that Schedule (revocation of recognition by reason of

default by director)—

(a)   

in sub-paragraph (1), in paragraph (a) for “director” substitute

30

“manager”,

(b)   

in paragraph (b) of that sub-paragraph for “director” (in both places)

substitute “manager”,

(c)   

in paragraph (c) of that sub-paragraph for “director” (in both places)

substitute “manager”,

35

(d)   

in sub-paragraph (3) for “director” (in both places) substitute

“manager”, and

(e)   

after that sub-paragraph insert—

    “(4)  

The reference in paragraph (c) of sub-paragraph (1) to a

person employed by a recognised body includes a

40

reference to a person who was so employed at the time of

the conduct leading to the making of the order referred to

in that paragraph.”

104        

In paragraph 23 (orders as to remuneration for non-contentious business)—

(a)   

the existing provision becomes sub-paragraph (1) of that paragraph,

45

(b)   

in that sub-paragraph for “regulating (in accordance with paragraph

22)” substitute “prescribing (by virtue of paragraph 22) general

principles to be applied when determining”,

 

 

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)

277

 

(c)   

in that sub-paragraph for paragraph (b) substitute—

“(b)   

in paragraph (d), the reference to the solicitor were

a reference to any manager or employee of the

recognised body who is an authorised person.”,

and

5

(d)   

after that sub-paragraph insert—

    “(2)  

In this paragraph “authorised person” means a person

who is an authorised person in relation to an activity

which is a reserved legal activity, within the meaning of

the Legal Services Act 2007 (see section 18 of that Act).”

10

105        

For paragraph 24 of that Schedule (effect of contentious business

agreements) substitute—

“24   (1)  

This paragraph applies in relation to a contentious business

agreement made between a recognised body and a client.

      (2)  

A provision in the agreement that the body shall not be liable for

15

the negligence of any of its managers or employees shall be void if

the client is a natural person who, in entering that agreement, is

acting for purposes which are outside his trade, business or

profession.

      (3)  

A provision in the agreement that the body shall be relieved from

20

any responsibility to which it would otherwise be subject in the

course of carrying on its business as a recognised body shall be

void.”

106        

In paragraph 25 of that Schedule (effect of supervening incapacity on

contentious business agreements)—

25

(a)   

for sub-paragraph (1)(b) substitute—

“(b)   

a relevant insolvency event occurs in relation to the

body;”,

(b)   

in sub-paragraphs (2) and (3)—

(i)   

for “taxation” (in each place) substitute “assessment”, and

30

(ii)   

for “taxing officer” (in each place) substitute “costs officer”,

(c)   

in sub-paragraph (3) for “any officer” substitute “any manager”, and

(d)   

after that sub-paragraph insert—

    “(4)  

For the purposes of this paragraph a relevant insolvency

event occurs in relation to a recognised body if—

35

(a)   

a resolution for a voluntary winding-up of the

body is passed without a declaration of solvency

under section 89 of the Insolvency Act 1986;

(b)   

the body enters administration within the meaning

of paragraph 1(2)(b) of Schedule B1 to that Act;

40

(c)   

an administrative receiver within the meaning of

section 251 of that Act is appointed;

(d)   

a meeting of creditors is held in relation to the body

under section 95 of that Act (creditors’ meeting

which has the effect of converting a members’

45

voluntary winding up into a creditors’ voluntary

winding up);

(e)   

an order for the winding up of the body is made.”

 

 

 
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