Legal Services Bill [HL]

House of Commons

Session 2006 - 07
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Legal Services Bill [HL]

Legal Services Bill [HL]
Part 3 — Reserved legal activities
7

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Carrying on of a reserved legal activity: employers and employees etc
(1)
This section applies for the interpretation of references in this Act to a person
carrying on an activity which is a reserved legal activity.
(2)
References to a person carrying on an activity which is a reserved legal activity
include a person (“E”) who—
5
(a)
is an employee of a person (“P”), and
(b)
carries on the activity in E’s capacity as such an employee.
(3)
For the purposes of subsection (2), it is irrelevant whether P is entitled to carry
on the activity.
(4)
P does not carry on an activity (“the relevant activity”) which is a reserved legal
10
activity by virtue of E carrying it on in E’s capacity as an employee of P, unless
the provision of relevant services to the public or a section of the public (with
or without a view to profit) is part of P’s business.
(5)
Relevant services are services which consist of or include the carrying on of the
relevant activity by employees of P in their capacity as employees of P.
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(6)
The Lord Chancellor may by order make provision about—
(a)
what does or does not constitute a section of the public;
(b)
the circumstances in which the provision of relevant services to the
public or a section of the public does or does not form part of P’s
business.
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(7)
The Lord Chancellor may make an order under subsection (6) only on the
recommendation of the Board.
(8)
If P is a body, references to an employee of P include references to a manager
of P.
16
Offence to carry on reserved legal activity through person not entitled
25
(1)
Where subsection (2) applies it is an offence for a person (“P”) to carry on an
activity (“the relevant activity”) which is a reserved legal activity, despite P
being entitled to carry on the relevant activity.
(2)
This subsection applies if—
(a)
P carries on the relevant activity by virtue of an employee of P (“E”)
30
carrying it on in E’s capacity as such an employee, and
(b)
in carrying on the relevant activity, E commits an offence under section
14.
(3)
If P is a body, references in subsection (2) to an employee of P include
references to a manager of P.
35
(4)
In proceedings for an offence under subsection (1), it is a defence for the
accused to show that the accused took all reasonable precautions and exercised
all due diligence to avoid committing the offence.
(5)
A person who is guilty of an offence under subsection (1) is liable—
(a)
on summary conviction, to imprisonment for a term not exceeding 12
40
months or a fine not exceeding the statutory maximum (or both), and
(b)
on conviction on indictment, to imprisonment for a term not exceeding
2 years or a fine (or both).

Legal Services Bill [HL]
Part 3 — Reserved legal activities
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(6)
A person who is guilty of an offence under subsection (1) by reason of an act
done in the purported exercise of a right of audience, or a right to conduct
litigation, in relation to any proceedings or contemplated proceedings is also
guilty of contempt of the court concerned and may be punished accordingly.
(7)
In relation to an offence under subsection (1) committed before the
5
commencement of section 154(1) of the Criminal Justice Act 2003 (c. 44), the
reference in subsection (5)(a) to 12 months is to be read as a reference to 6
months.
17
Offence to pretend to be entitled
(1)
It is an offence for a person—
10
(a)
wilfully to pretend to be entitled to carry on any activity which is a
reserved legal activity when that person is not so entitled, or
(b)
with the intention of implying falsely that that person is so entitled, to
take or use any name, title or description.
(2)
A person who is guilty of an offence under subsection (1) is liable—
15
(a)
on summary conviction, to imprisonment for a term not exceeding 12
months or a fine not exceeding the statutory maximum (or both), and
(b)
on conviction on indictment, to imprisonment for a term not exceeding
2 years or a fine (or both).
(3)
In relation to an offence under subsection (1) committed before the
20
commencement of section 154(1) of the Criminal Justice Act 2003, the reference
in subsection (2)(a) to 12 months is to be read as a reference to 6 months.
Interpretation
18
Authorised persons
(1)
For the purposes of this Act “authorised person”, in relation to an activity (“the
25
relevant activity”) which is a reserved legal activity, means —
(a)
a person who is authorised to carry on the relevant activity by a
relevant approved regulator in relation to the relevant activity (other
than by virtue of a licence under Part 5), or
(b)
a licensable body which, by virtue of such a licence, is authorised to
30
carry on the relevant activity by a licensing authority in relation to the
reserved legal activity.
(2)
A licensable body may not be authorised to carry on the relevant activity as
mentioned in subsection (1)(a).
(3)
But where a body (“A”) which is authorised as mentioned in subsection (1)(a)
35
becomes a licensable body, the body is deemed by virtue of this subsection to
continue to be so authorised from that time until the earliest of the following
events—
(a)
the end of the period of 90 days beginning with the day on which that
time falls;
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(b)
the time from which the relevant approved regulator determines this
subsection is to cease to apply to A;
(c)
the time when A ceases to be a licensable body.

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Part 3 — Reserved legal activities
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(4)
Subsection (2) is subject to Part 2 of Schedule 5 (by virtue of which licensable
bodies may be deemed to be authorised as mentioned in subsection (1)(a) in
relation to certain activities during a transitional period).
(5)
A person other than a licensable body may not be authorised to carry on the
relevant activity as mentioned in subsection (1)(b).
5
(6)
But where a body (“L”) which is authorised as mentioned in subsection (1)(b)
ceases to be a licensable body, the body is deemed by virtue of this subsection
to continue to be so authorised from that time until the earliest of the following
events—
(a)
the end of the period of 90 days beginning with the day on which that
10
time falls;
(b)
the time from which the relevant licensing authority determines this
subsection is to cease to apply to L;
(c)
the time when L becomes a licensable body.
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Exempt persons
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In this Act, “exempt person”, in relation to an activity (“the relevant activity”)
which is a reserved legal activity, means a person who is, by virtue of Schedule
3, an exempt person for the purposes of carrying on the relevant activity.
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Approved regulators and relevant approved regulators
(1)
In this Act, the following expressions have the meaning given by this section—
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“approved regulator”;
“relevant approved regulator”.
(2)
“Approved regulator” means—
(a)
a body which is designated as an approved regulator by Part 1 of
Schedule 4 or under Part 2 of that Schedule (or both) and whose
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regulatory arrangements are approved for the purposes of this Act, and
(b)
if an order under section 62(1)(a) has effect, the Board.
(3)
An approved regulator is a “relevant approved regulator” in relation to an
activity which is a reserved legal activity if—
(a)
the approved regulator is designated by Part 1, or under Part 2, of
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Schedule 4 in relation to that reserved legal activity, or
(b)
if the approved regulator is the Board, it is designated in relation to that
reserved legal activity by an order under section 62(1)(a).
(4)
An approved regulator is a “relevant approved regulator” in relation to a
person if the person is authorised by the approved regulator to carry on an
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activity which is a reserved legal activity.
(5)
Schedule 4 makes provision with respect to approved regulators other than the
Board.

In that Schedule—
(a)
Part 1 designates certain bodies as approved regulators in relation to
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certain reserved legal activities,
(b)
Part 2 makes provision for bodies to be designated by order as
approved regulators in relation to one or more reserved legal activities,
and

Legal Services Bill [HL]
Part 3 — Reserved legal activities
10

(c)
Part 3 makes provision relating to the approval of changes to an
approved regulator’s regulatory arrangements.
(6)
An approved regulator may authorise persons to carry on any activity which
is a reserved legal activity in respect of which it is a relevant approved
regulator.
5
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Regulatory arrangements
(1)
In this Act references to the “regulatory arrangements” of a body are to—
(a)
its arrangements for authorising persons to carry on reserved legal
activities,
(b)
its arrangements (if any) for authorising persons to provide
10
immigration advice or immigration services,
(c)
its practice rules,
(d)
its conduct rules,
(e)
its disciplinary arrangements in relation to regulated persons
(including its discipline rules),
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(f)
its qualification regulations,
(g)
its indemnification arrangements,
(h)
its compensation arrangements,
(i)
any of its other rules or regulations (however they may be described),
and any other arrangements, which apply to or in relation to regulated
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persons, other than those made for the purposes of any function the
body has to represent or promote the interests of persons regulated by
it, and
(j)
its licensing rules (if any), so far as not within paragraphs (a) to (i),

(whether or not those arrangements, rules or regulations are contained in, or
25
made under, an enactment).
(2)
In this Act—
“compensation arrangements”, in relation to a body, means arrangements
to provide for grants or other payments for the purposes of relieving or
mitigating losses or hardship suffered by persons in consequence of—
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(a)
negligence or fraud or other dishonesty on the part of any
persons whom the body has authorised to carry on activities
which constitute a reserved legal activity, or of employees of
theirs, in connection with their activities as such authorised
persons, and
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(b)
failure, on the part of regulated persons, to account for money
received by them in connection with their activities as such
regulated persons;
“conduct rules”, in relation to a body, means any rules or regulations
(however they may be described) as to the conduct required of
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regulated persons;
“discipline rules”, in relation to a body, means any rules or regulations
(however they may be described) as to the disciplining of regulated
persons;
“indemnification arrangements”, in relation to a body, means
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arrangements for the purpose of ensuring the indemnification of those
who are or were regulated persons against losses arising from claims in
relation to any description of civil liability incurred by them, or by

Legal Services Bill [HL]
Part 3 — Reserved legal activities
11

employees or former employees of theirs, in connection with their
activities as such regulated persons;
“practice rules”, in relation to a body, means any rules or regulations
(however they may be described) which govern the practice of
regulated persons;
5
“qualification regulations”, in relation to a body, means—
(a)
any rules or regulations relating to—
(i)
the education and training which persons must receive,
or
(ii)
any other requirements which must be met by or in
10
respect of them,

in order for them to be authorised by the body to carry on an
activity which is a reserved legal activity,
(b)
any rules or regulations relating to—
(i)
the education and training which persons must receive,
15
or
(ii)
any other requirements which must be met by or in
respect of them,

in order for them to be authorised by the body to provide
immigration advice or immigration services, and
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(c)
any other rules or regulations relating to the education and
training which regulated persons must receive or any other
requirements which must be met by or in respect of them,
(however they may be described).
(3)
In this section “regulated persons”, in relation to a body, means any class of
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persons which consists of or includes—
(a)
persons who are authorised by the body to carry on an activity which
is a reserved legal activity;
(b)
persons who are not so authorised, but are employees of a person (other
than an individual) who is so authorised.
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(4)
In relation to an authorised person other than an individual, references in
subsection (2) and (3) to employees of the person include managers of the
person.
Continuity of existing rights and transitional protection
22
Continuity of existing rights to carry on reserved legal activities
35
Schedule 5 makes provision for the continuity of existing rights and for certain
persons to be deemed, during a transitional period, to be authorised by
approved regulators to carry on certain activities.
23
Transitional protection for non-commercial bodies
(1)
During the transitional period, a body within subsection (2) is entitled to carry
40
on any activity which is a reserved legal activity.
(2)
The bodies are—
(a)
a not for profit body,
(b)
a community interest company, or

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Part 3 — Reserved legal activities
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(c)
a trade union.
(3)
The transitional period is the period which—
(a)
begins with the day appointed for the coming into force of section 13,
and
(b)
ends with the day appointed by the Lord Chancellor by order for the
5
purposes of this paragraph.
(4)
Different days may be appointed under subsection (3)(b) for different
purposes.
(5)
An order may be made under subsection (3)(b) only on the recommendation of
the Board.
10
Alteration of reserved legal activities
24
Extension of the reserved legal activities
(1)
The Lord Chancellor may, by order, amend section 12 or Schedule 2 (reserved
legal activities) so as to add any legal activity to the activities which are
reserved legal activities for the purposes of this Act.
15
(2)
An order under subsection (1) may only be made on the recommendation of
the Board.
(3)
Schedule 6 makes provision about the making of recommendations for the
purposes of this section.
(4)
Where a recommendation is made in relation to an activity, the Lord
20
Chancellor must—
(a)
consider the report containing the recommendation given to the Lord
Chancellor under paragraph 16(3)(a) of that Schedule,
(b)
decide whether or not to make an order under this section in respect of
the activity, and
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(c)
publish a notice of that decision,

within the period of 90 days beginning with the day on which the report was
given to the Lord Chancellor.
(5)
Where the Lord Chancellor decides not to make an order under this section in
respect of an activity, the notice under subsection (4)(c) must state the reasons
30
for that decision.
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Provisional designation as approved regulators and licensing authorities
(1)
The Lord Chancellor may, by order, make provision—
(a)
enabling applications to be made, considered and determined under
Part 2 of Schedule 4 or Part 1 of Schedule 10 in relation to a provisional
35
reserved activity, as if the activity were a reserved legal activity;
(b)
enabling provisional designation orders to be made by the Lord
Chancellor in respect of a provisional reserved activity, as if the activity
were a reserved legal activity.
(2)
An order under subsection (1) may, in particular, provide that Part 2 of
40
Schedule 4 or Part 1 of Schedule 10 is to apply, in relation to such cases as may
be specified by the order, with such modifications as may be so specified.

Legal Services Bill [HL]
Part 4 — Regulation of approved regulators
13

(3)
The Lord Chancellor may also, by order, make provision—
(a)
for the purpose of enabling applications for authorisation to carry on an
activity which is a provisional reserved activity to be made to and
considered and determined by—
(i)
a body in respect of which a provisional designation order is
5
made, or
(ii)
the Board in its capacity as a licensing authority;
(b)
for the purpose of enabling persons to be deemed to be authorised to
carry on an activity which is a new reserved legal activity by a relevant
approved regulator in relation to the activity, or by the Board in its
10
capacity as a licensing authority, for a period specified in the order.
(4)
For this purpose—
“provisional reserved activity” means an activity in respect of which a
provisional report under paragraph 10 of Schedule 6 states that the
Board is minded to make a recommendation for the purposes of section
15
24;
“provisional designation order” means an order made by the Lord
Chancellor under Part 2 of Schedule 4 or Part 1 of Schedule 10 which is
conditional upon the Lord Chancellor making an order under section
24 in respect of the provisional reserved activity, pursuant to a
20
recommendation made by the Board following the provisional report;
“new reserved legal activity” means a legal activity which has become a
reserved legal activity by virtue of an order under section 24.
26
Recommendations that activities should cease to be reserved legal activities
(1)
The Board may recommend that an activity should cease to be a reserved legal
25
activity.
(2)
Schedule 6 makes provision about the making of recommendations for the
purposes of this section.
(3)
The Lord Chancellor must consider any recommendation made by the Board
for the purposes of this section (but nothing in section 209 (minor and
30
consequential provision etc) authorises the Lord Chancellor to give effect to
such a recommendation).
(4)
Where the Lord Chancellor disagrees with a recommendation (or any part of
it), the Lord Chancellor must publish a notice to that effect which must include
the Lord Chancellor’s reasons for disagreeing.
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Part 4
Regulation of approved regulators
Introductory
27
Regulatory and representative functions of approved regulators
(1)
In this Act references to the “regulatory functions” of an approved regulator
40
are to any functions the approved regulator has—
(a)
under or in relation to its regulatory arrangements, or
(b)
in connection with the making or alteration of those arrangements.