Legal Services Bill [HL]

House of Commons

Session 2006 - 07
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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)
278

107
In paragraph 26 of that Schedule (taxations with respect to contentious
business)—
(a)
in the paragraph heading for “Taxations” substitute “Assessments”,
(b)
the existing paragraph becomes sub-paragraph (1) and in that sub-
paragraph —
5
(i)
for “taxation” substitute “assessment”,
(ii)
for “taxing officer” substitute “costs officer”,
(iii)
after “the body” (in the second place) insert “or any manager
or employee of the body”, and
(iv)
for “any solicitor, being an officer” substitute “any authorised
10
person, being a manager”, and
(c)
after that sub-paragraph insert—
    “(2)
In this paragraph “authorised person” means an
authorised person, in relation to an activity which is a
reserved legal activity, within the meaning of the Legal
15
Services Act 2007.”
108
In paragraph 28 (power of court to order recognised body to pay over
clients’ money) after “client” (in the third place) insert “or any manager or
employee of such a body”.
109
For paragraph 29 of that Schedule (actions to recover costs) substitute—
20
“29   (1)
Subsection (2A) of section 69 of the 1974 Act shall have effect in
relation to a bill of costs delivered by a recognised body as if for
paragraphs (a) and (b) there were substituted—
“(a)
signed on behalf of the recognised body by any manager or
employee of the body authorised by it to do so, or
25
(b)
enclosed in, or accompanied by, a letter which is so signed
and refers to the bill.”
      (2)
Subsection (2E) of that section shall have effect in relation to such
a bill as if for “the solicitor” there were substituted “the recognised
body”.”
30
110
In paragraph 30 (power of Society to inspect files relating to certain
proceedings), for paragraph (b) substitute—
“(b)
for the appointment of an administrative receiver within
the meaning of section 251 of the Insolvency Act 1986; or”.
111
In paragraph 31 of that Schedule (bank accounts)—
35
(a)
omit “or (2)”, and
(b)
after “bank” insert “or building society”.
112
After that paragraph insert—
“31A
Where rules made under section 32(1) of the 1974 Act are applied
to managers or employees in accordance with section 9(2)(fb) of
40
this Act, section 85 of the 1974 Act shall apply in relation to a
manager or employee to whom the rules are applied who keeps an
account with a bank or building society in pursuance of any such
rules as it applies in relation to a solicitor who keeps such an
account in pursuance of rules under section 32.”
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)
279

113   (1)
Paragraph 32 of that Schedule (intervention by Society) is amended as
follows.
      (2)
In sub-paragraph (1)(a)—
(a)
for “Council are” substitute “Society is”,
(b)
after “recognised body” insert “or a manager of such a body”, and
5
(c)
for “it” substitute “the body or manager”.
      (3)
Omit sub-paragraph (1)(b).
      (4)
For sub-paragraph (1)(c) substitute—
“(c)
a relevant insolvency event occurs in relation to a
recognised body; or”.
10
      (5)
In sub-paragraph (1)(d)—
(a)
for “Council have” substitute “Society has”,
(b)
for “officer” substitute “manager”, and
(c)
for “that body’s” to the end substitute—
“(i)
that body’s business,
15
(ii)
any trust of which that body is or was a
trustee,
(iii)
any trust of which the manager or
employee is or was a trustee in his capacity
as such a manager or employee, or
20
(iv)
the business of another body in which the
manager or employee is or was a manager
or employee or the practice (or former
practice) of the manager or employee; or”.
      (6)
After sub-paragraph (1)(d) insert—
25
“(e)
the Society is satisfied that it is necessary to exercise the
powers conferred by Part 2 of Schedule 1 to the 1974 Act
(or any of them) in relation to a recognised body to
protect—
(i)
the interests of clients (or former or potential
30
clients) of the recognised body,
(ii)
the interests of the beneficiaries of any trust of
which the recognised body is or was a trustee, or
(iii)
the interests of the beneficiaries of any trust of
which a person who is or was a manager or
35
employee of the recognised body is or was a trustee
in that person’s capacity as such a manager or
employee;”.
      (7)
After sub-paragraph (1) insert—
   “(1A)
For the purposes of this paragraph a relevant insolvency event
40
occurs in relation to a recognised body if—
(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
45
paragraph 1(2)(b) of Schedule B1 to 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)
280

(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’ voluntary winding up into
5
a creditors’ voluntary winding up);
(e)
an order for the winding up of the body is made.”
      (8)
Omit sub-paragraph (2).
114
For paragraph 33 of that Schedule (further grounds for intervention)—
(a)
for paragraph (a) substitute—
10
“(a)
the Society is satisfied that there has been undue
delay—
(i)
on the part of a recognised body in
connection with any matter in which it is or
was acting on behalf of a client or with any
15
trust of which it is or was a trustee, or
(ii)
on the part of a person who is or was a
manager or employee of a recognised body
in connection with any trust of which the
manager or employee is or was a trustee in
20
his capacity as such a manager or
employee;”, and
(b)
in paragraph (c) for “Council regard” substitute “Society regards”.
115
In paragraph 34 of that Schedule (powers of intervention on revocation of
recognition etc), in subsection (1) omit “corporate” (in both places).
25
116
In paragraph 35 of that Schedule (provision relating to the application of
Part 2 of Schedule 1 to the Solicitors Act 1974)—
(a)
in paragraph (a) omit “corporate”, and
(b)
omit “and” at the end of paragraph (b) and after paragraph (c)
insert—
30
“(d)
paragraph 6(2)(a) of that Schedule is to be
construed as including a reference to sums of
money held by or on behalf of the recognised body
in connection with any trust of which a person who
is or was a manager or employee of the recognised
35
body is or was a trustee in his capacity as such a
manager or employee;
(e)
paragraph 9 of that Schedule is to be construed—
(i)
as if sub-paragraph (1) included a reference
to documents in the possession or under the
40
control of the recognised body in
connection with any trust of which a person
who is or was a manager or employee of the
recognised body is or was a trustee in his
capacity as such a manager or employee,
45
and
(ii)
as applying to such a manager or employee
and documents and property in his
possession or under his control in
connection with such a trust as it applies to
50

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 3 — The Courts and Legal Services Act 1990 (c. 41)
281

a solicitor and documents and property in
the possession or under the control of the
solicitor;
(f)
paragraph 11(1) of that Schedule is to be construed
as including a power for the Society to apply to the
5
High Court for an order for the appointment of a
new trustee to a trust in substitution for a person
who is a trustee, in his capacity as a manager or
employee of the recognised body; and
(g)
paragraph 13A of that Schedule is to be read as if
10
the references to a former partner were
references—
(i)
in the case of a recognised body which is a
partnership, to a former partner in the
partnership, and
15
(ii)
in any other case to a manager or former
manager of the recognised body.”
117
In paragraph 36 of that Schedule (privilege from disclosure etc) in sub-
paragraph (3) for “an officer” substitute “a manager”.
Part 3
20
The Courts and Legal Services Act 1990 (c. 41)
118
The Courts and Legal Services Act 1990 is amended in accordance with this
Part of this Schedule.
119
In section 89 (foreign lawyers: recognised bodies and partnerships with
solicitors)—
25
(a)
for subsection (3)(a)(iv) substitute—
“(iv)
sections 36 and 36A (compensation grants);
and”,
(b)
in subsection (5) for “Secretary of State” substitute “Lord
Chancellor”,
30
(c)
in paragraph (a) of that subsection for “the commencement of this
section” substitute “or in the same Session as the Legal Services Act
2007 was passed”,
(d)
in subsection (6) for “Secretary of State” substitute “Lord
Chancellor”,
35
(e)
in subsection (7) for “Secretary of State” (in both places) substitute
“Lord Chancellor”,
(f)
in paragraph (a) of that subsection for “the commencement of this
section” substitute “or in the same Session as the Legal Services Act
2007 was passed”, and
40
(g)
after subsection (8) insert—
“(8A)
Rules and regulations made by the Law Society under, or by
virtue of, this section or Schedule 14 which are not regulatory
arrangements within the meaning of the Legal Services Act
2007 are to be treated as such arrangements for the purposes
45
of that Act.”

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 3 — The Courts and Legal Services Act 1990 (c. 41)
282

120
Schedule 14 to that Act (foreign lawyers: partnerships and recognised
bodies) is amended as follows.
121
In paragraph 1 (interpretation) omit the definitions of “the Council” and
“controlled trust”.
122
In paragraph 2 (application for registration)—
5
(a)
for “Council” in each place substitute “Society”,
(b)
in sub-paragraph (1)(b) for “the Master of the Rolls” substitute “the
Legal Services Board”,
(c)
in sub-paragraph (2) for “Law Society” substitute “Society”,
(d)
omit sub-paragraph (3),
10
(e)
in sub-paragraph (4)—
(i)
for “Master of the Rolls” substitute “Legal Services Board”,
and
(ii)
in paragraph (a) after “including” insert “the form of the
register and”,
15
(f)
in that sub-paragraph, after paragraph (b) insert “and
(c)
the making available to the public of the
information contained in the register (including the
manner in which, and hours during which, the
information is to be made so available and whether
20
the information is to be made available free of
charge).”, and
(g)
omit sub-paragraph (5).
123
After paragraph 2 insert—
“2A   (1)
The Society may direct that a foreign lawyer’s registration is to
25
have effect subject to such conditions as the Society thinks fit to
impose.
      (2)
A direction under sub-paragraph (1) may be given in respect of a
foreign lawyer
(a)
at the time he is first registered, or
30
(b)
at any time when the registration has effect.”
124
In paragraph 3 (duration of registration) in sub-paragraphs (2) and (3)(c) for
“Council” substitute “Society”.
125
In paragraph 5 (intervention in practices)—
(a)
in sub-paragraph (3)(a) and (b)—
35
(i)
for “Council have” substitute “Society has”, and
(ii)
omit “by virtue of his being a member of that partnership”,
(b)
after sub-paragraph (3)(b) insert—
“(ba)
the Society has reason to suspect dishonesty on the
part of the registered foreign lawyer (“L”) in
40
connection with—
(i)
the business of any person of whom L is or
was an employee, or of any body of which
L is or was a manager, or
(ii)
any business which is or was carried on by
45
L as a sole trader;”,
(c)
in sub-paragraph (3)(c) for “Council are” substitute “Society is”,

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 3 — The Courts and Legal Services Act 1990 (c. 41)
283

(d)
after sub-paragraph (3)(e) insert—
“(ea)
the Society is satisfied that he has abandoned his
practice;”,
(e)
in sub-paragraph (3)(i)—
(i)
for “Council are” substitute “Society is”, and
5
(ii)
for “an officer” (in both places) substitute “a manager”,
(f)
after that sub-paragraph insert—
“(j)
the Society is satisfied that it is necessary to exercise
the intervention powers (or any of them) in relation
to the registered foreign lawyer to protect—
10
(i)
the interests of clients (or former or
potential clients) of the registered foreign
lawyer or the multi-national partnership, or
(ii)
the interests of the beneficiaries of any trust
of which the registered foreign lawyer is or
15
was a trustee.”,
(g)
omit sub-paragraph (4),
(h)
in sub-paragraph (5)(a) for “a complaint is made to the Society”
substitute “the Society is satisfied”,
(i)
in sub-paragraph (5)(a)(ii) for “controlled trust” substitute “trust”,
20
(j)
in sub-paragraph (5)(c) for “Council regard” substitute “Society
regards”, and
(k)
after sub-paragraph (9) insert—
   “(10)
In this paragraph “manager”, in relation to a recognised
body, has the same meaning as in the Legal Services Act
25
2007 (see section 208 of that Act).”
126
For paragraph 6 (compensation fund) substitute—
“6
Section 36 of the 1974 Act applies in relation to registered foreign
lawyers as if for paragraphs (a) and (b) of subsection (1) there were
substituted—
30
“(a)
an act or omission of a registered foreign lawyer or former
registered foreign lawyer;
(b)
an act or omission of an employee or former employee of a
registered foreign lawyer or former registered foreign
lawyer;”.
35
127
For paragraph 7 (contributions to fund) substitute—
“7
Section 36A(2) and (3) of the 1974 Act applies in relation to
registered foreign lawyers as it applies in relation to solicitors.”
128
For paragraph 8 (accountants’ reports) substitute —
“8
Section 34 of the Act of 1974 applies in relation to registered
40
foreign lawyers as it applies in relation to solicitors.”
129
In paragraph 14 (appeal against conditions or refusals)—
(a)
in sub-paragraph (1)—
(i)
for “Master of the Rolls” substitute “High Court”, and
(ii)
for “2(3)” substitute “2A”,
45
(b)
omit sub-paragraph (2),

Legal Services Bill [HL]
Schedule 17 — Licensed conveyancing
Part 1 — Administration of Justice Act 1985 (c. 61)
284

(c)
in sub-paragraph (3)—
(i)
omit “to him”,
(ii)
for “Master of the Rolls” substitute “High Court”, and
(iii)
for “he” substitute “it”, and
(d)
after that sub-paragraph insert—
5
    “(4)
In relation to an appeal under this paragraph the High
Court may make such order as it thinks fit as to payment
of costs.
      (5)
The decision of the High Court on an appeal under this
paragraph shall be final.”
10
130
In paragraph 15 (jurisdiction and powers of disciplinary tribunal)—
(a)
after sub-paragraph (3) insert—
   “(3A)
Any person who alleges that a registered foreign lawyer
has knowingly acted in contravention of any order under
section 43(2) of the Act of 1974 or of any conditions subject
15
to which a permission has been granted under such an
order may make a complaint to the Tribunal.”,
(b)
in sub-paragraph (4)(c), omit “not exceeding £5,000”, and
(c)
omit sub-paragraph (5).
131
In paragraph 16(2) (foreign lawyers assisting Tribunal) for “Master of the
20
Rolls” substitute “Legal Services Board”.
132
In paragraph 17 (appeals from Tribunal)—
(a)
in sub-paragraph (1) for “lie—” to the end substitute “lie to the High
Court”,
(b)
in sub-paragraph (2)—
25
(i)
omit “and the Master of the Rolls”, and
(ii)
for “they” substitute “it”,
(c)
in sub-paragraph (3) for “of the Master of the Rolls on an appeal
under this paragraph” substitute “of the High Court on an appeal in
the case of an order on an application under paragraph 15(2)(d) or
30
(e), or the refusal of any such application,”, and
(d)
omit sub-paragraph (4).
Schedule 17
Section 183

Licensed conveyancing
Part 1
35
Administration of Justice Act 1985 (c. 61)
1
Part 2 of the Administration of Justice Act 1985 (licensed conveyancing) is
amended in accordance with this Part.
2
In section 11 (provision of conveyancing services by licensed
conveyancers)—
40