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 10 — Designation of approved regulators as licensing authorities
Part 2 — Cancellation of designation by order
180

(b)
publish that advice together with any written representations duly
made by the licensing authority under paragraph 18 and the report
(if any) prepared under that paragraph.
      (2)
The licensing authority and any body within sub-paragraph (3) may make
to the Board—
5
(a)
written representations, and
(b)
if authorised to do so by the Board, oral representations,

about the advice.
      (3)
A body is within this sub-paragraph if it represents licensed bodies
authorised by the licensing authority to carry on activities which are
10
reserved legal activities.
      (4)
The Board may allow any other person to make written or oral
representations about the advice.
      (5)
The Board may make rules governing the making to the Board of written or
oral representations.
15
      (6)
Representations under this paragraph must be made within—
(a)
the period of 28 days beginning with the day on which the
representations and advice are published under sub-paragraph
(1)(b), or
(b)
such longer period as the Board may specify in a particular case.
20
      (7)
Where oral representations are made, the Board must prepare a report of
those representations.
      (8)
Before preparing that report, the Board must—
(a)
give each person who made oral representations a reasonable
opportunity to comment on a draft of the report of those
25
representations, and
(b)
have regard to any comments duly made.
      (9)
The Board must, as soon as reasonably practicable after the end of the period
within which representations under this paragraph may be made, publish
any written representations duly made and the report (if any) prepared
30
under sub-paragraph (7).
Publication of advice etc
26    (1)
Nothing in paragraph 25 operates—
(a)
to prevent a person who gives advice under paragraphs 20 to 23 from
publishing that advice, or
35
(b)
to prevent a person who makes representations under paragraph 18
or 25 from publishing those representations.
      (2)
A person (“the publisher”) publishing any such material (whether under
paragraph 25 or otherwise) must, so far as practicable, exclude any matter
which relates to the private affairs of a particular individual the publication
40
of which, in the opinion of the publisher, would or might seriously and
prejudicially affect the interests of that individual.
Decision by the Board
27    (1)
After considering—

Legal Services Bill [HL]
Schedule 11 — Licensing rules
Part 1 — Licensing procedure
181

(a)
any advice duly given under paragraphs 20 to 23,
(b)
any representations duly made under paragraph 18 or 25, and
(c)
any other information which the Board considers relevant,

the Board must decide whether to make the proposed recommendation.
      (2)
The Board must give notice of its decision (“the decision notice”) to the
5
licensing authority and to the Lord Chancellor.
      (3)
If the Board decides to make the proposed recommendation, the decision
notice must—
(a)
contain the recommendation, and
(b)
state why the Board is satisfied of the matters mentioned in section
10
76(5)(a) and (b).
      (4)
The Board must publish the decision notice.
Schedule 11
Section 83

Licensing rules
Part 1
15
Licensing procedure
Applications for licences
1     (1)
Licensing rules must make provision about the form and manner in which
applications for licences are to be made, and the fee (if any) which is to
accompany an application.
20
      (2)
They may make provision about—
(a)
the information which applications must contain, and
(b)
the documents which must accompany applications.
Determination of applications
2     (1)
Licensing rules must make the following provision about the determination
25
of applications for licences.
      (2)
Before the end of the decision period the licensing authority must—
(a)
decide the application,
(b)
notify the applicant of its decision, and
(c)
if it decides to refuse the application, set out in the notice the reasons
30
for the refusal.
      (3)
The decision period is the period of 6 months beginning with the day on
which the application is made to the licensing authority in accordance with
its licensing rules.
      (4)
The licensing authority may, on one or more occasions, give the applicant a
35
notice (an “extension notice”) extending the decision period by a period
specified in the notice.
      (5)
But—

Legal Services Bill [HL]
Schedule 11 — Licensing rules
Part 1 — Licensing procedure
182

(a)
an extension notice may only be given before the time when the
decision period would end, but for the extension notice, and
(b)
the total decision period must not exceed 9 months.
      (6)
An extension notice must set out the reasons for the extension.
Review of determination
5
3
Licensing rules must make provision for review by the licensing authority
of—
(a)
a decision to refuse an application for a licence;
(b)
if a licence is granted, the terms of the licence.
Period of licence and renewal
10
4     (1)
The licensing rules may make provision—
(a)
limiting the period for which any licence is (subject to the provision
of this Part of this Schedule and of the licensing rules) to remain in
force;
(b)
about the renewal of licences, including provision about the form
15
and manner in which an application for the renewal is to be made,
and the fee (if any) which is to accompany an application.
      (2)
The licensing rules may make provision about—
(a)
the information which applications for renewal must contain, and
(b)
the documents which must accompany applications.
20
      (3)
Licensing rules must provide that a licence issued to a licensed body by the
licensing authority ceases to have effect if the licensed body is issued with a
licence by another licensing authority.
Continuity of licences
5     (1)
Licensing rules may make provision about the effect, on a licence issued to
25
a partnership or other unincorporated body (“the existing body”), of any
change in the membership of the existing body.
      (2)
The provision which may be made includes provision for the existing body’s
licence to be transferred where the existing body ceases to exist and another
body succeeds to the whole or substantially the whole of its business.
30
Modification of licences
6     (1)
Licensing rules must make provision about the form and manner in which
applications are to be made for modification of the terms of a licence under
section 86, and the fee (if any) which is to accompany the application.
      (2)
They may make provision as to the circumstances in which the licensing
35
authority may modify the terms of a licence under section 86 without an
application being made.
      (3)
They must make provision for review by the licensing authority of—
(a)
a decision to refuse an application for modification of the terms of a
licence;
40
(b)
if the licensing authority makes licensing rules under sub-paragraph
(2), a decision under those rules to modify the terms of a licence.

Legal Services Bill [HL]
Schedule 11 — Licensing rules
Part 2 — Structural requirements
183

Modifications under section 106 or 107
7     (1)
Licensing rules must make provision about the form and manner in which
applications are to be made under section 106 or 107, and the fee (if any)
which is to accompany the application.
      (2)
They may make provision as to the matters to which the licensing authority
5
must have regard in determining whether to make an order under section
106, or to revoke or modify such an order.
      (3)
They must make provision for review by the licensing authority of—
(a)
a decision to refuse an application under those sections;
(b)
the terms of any order made under section 106 or any decision under
10
section 107.
8     (1)
Licensing rules must make the following provision in relation to licensed
bodies to which section 106 applies (“special bodies”), and in relation to
which an order under section 106 has been made.
      (2)
If a special body becomes a special body of a different kind, it must notify
15
the licensing authority of that fact before the end of the relevant period.
      (3)
If a special body ceases to be a special body, it must notify the licensing
authority of that fact before the end of the relevant period.
      (4)
The relevant period is the period of 30 days (or such longer period as may be
specified in licensing rules) beginning with the day on which the body first
20
became a special body of a different kind, or ceased to be a special body.
      (5)
Licensing rules may make provision requiring a special body to provide the
licensing authority with such information relevant to the matters mentioned
in section 106(5) as may be specified in the licensing rules.
Part 2
25
Structural requirements
Management
9     (1)
Licensing rules must require a licensed body to comply with the following
requirement at all times.
      (2)
At least one of the licensed body’s managers must be a person (other than a
30
licensed body) who is an authorised person in relation to a licensed activity.
      (3)
No manager of the licensed body may be a person who under this Part of this
Act is disqualified from acting as a manager of a licensed body.
10    (1)
Licensing rules may make further provision as to—
(a)
the managers of licensed bodies, and
35
(b)
the arrangements for the management by them of the licensed body
and its activities.
      (2)
They must not require all the managers of a licensed body to be authorised
persons in relation to a reserved legal activity.

Legal Services Bill [HL]
Schedule 11 — Licensing rules
Part 2 — Structural requirements
184

Head of Legal Practice
11    (1)
Licensing rules must include the following requirements.
      (2)
A licensed body must at all times have an individual—
(a)
who is designated as Head of Legal Practice, and
(b)
whose designation is approved by the licensing authority.
5
      (3)
A designation of an individual as Head of Legal Practice has effect only
while the individual—
(a)
consents to the designation,
(b)
is an authorised person in relation to one or more of the licensed
activities, and
10
(c)
is not under this Part of this Act disqualified from acting as Head of
Legal Practice of a licensed body.
      (4)
The licensing authority may approve a person’s designation only if it is
satisfied that the person is a fit and proper person to carry out the duties
imposed by section 91 in relation to that body.
15
      (5)
The licensing authority may approve a person’s designation in the course of
determining an application for a licence under section 84.
      (6)
If the licensing authority is satisfied that the person designated as a licensed
body’s Head of Legal Practice has breached a duty imposed by section 91, it
may withdraw its approval of that person’s designation.
20
12    (1)
Licensing rules must make provision—
(a)
about the procedures and criteria that will be applied by the
licensing authority when determining under paragraph 11(4)
whether an individual is a fit and proper person;
(b)
for a review by the licensing authority of a determination under that
25
paragraph that an individual is not a fit and proper person;
(c)
about the procedures and criteria that will be applied by the
licensing authority in determining under paragraph 11(6) whether to
withdraw its approval;
(d)
for a review by the licensing authority of a determination under that
30
paragraph to withdraw its approval;
(e)
about the procedure which is to apply where a licensed body ceases
to comply with the requirement imposed by virtue of paragraph
11(2).
      (2)
Rules made in accordance with sub-paragraph (1)(e) may in particular
35
provide that the requirement imposed by virtue of paragraph 11(2) is
suspended until such time as may be specified by the licensing authority if
the licensed body complies with such other requirements as may be
specified in the rules.
Head of Finance and Administration
40
13    (1)
Licensing rules must include the following requirements.
      (2)
A licensed body must at all times have an individual—
(a)
who is designated as Head of Finance and Administration, and
(b)
whose designation is approved by the licensing authority.

Legal Services Bill [HL]
Schedule 11 — Licensing rules
Part 3 — Practice requirements
185

      (3)
A designation of an individual as Head of Finance and Administration has
effect only while the individual—
(a)
consents to the designation, and
(b)
is not under this Part of this Act disqualified from acting as Head of
Finance and Administration of a licensed body.
5
      (4)
The licensing authority may approve a person’s designation only if it is
satisfied that the person is a fit and proper person to carry out the duties
imposed by section 92 in relation to that body.
      (5)
The licensing authority may approve a person’s designation in the course of
determining an application for a licence under section 84.
10
      (6)
If the licensing authority is satisfied that the person designated as a licensed
body’s Head of Finance and Administration has breached a duty imposed
by section 92, it may withdraw its approval of that person’s designation.
14    (1)
Licensing rules must make provision—
(a)
about the procedures and criteria that will be applied by the
15
licensing authority when determining under paragraph 13(4)
whether an individual is a fit and proper person;
(b)
for a review by the licensing authority of a determination under that
paragraph that an individual is not a fit and proper person;
(c)
about the procedures and criteria that will be applied by the
20
licensing authority in determining under paragraph 13(6) whether to
withdraw its approval;
(d)
for a review by the licensing authority of a determination under that
paragraph to withdraw its approval;
(e)
about the procedure which is to apply where a licensed body ceases
25
to comply with the requirement imposed by virtue of paragraph
13(2).
      (2)
The rules made in accordance with sub-paragraph (1)(e) may in particular
provide that the requirement imposed by virtue of sub-paragraph 13(2) is
suspended until such time as may be specified by the licensing authority if
30
the licensed body complies with such other requirements as may be
specified in the rules.
Part 3
Practice requirements
Practising address
35
15    (1)
Licensing rules must require a licensed body, other than one to which sub-
paragraph (3) applies, at all times to have a practising address in England
and Wales.
      (2)
For this purpose “practising address”, in relation to a licensed body, means
an address from which the body provides services which consist of or
40
include the carrying on of reserved legal activities.
      (3)
This sub-paragraph applies to a licensed body—
(a)
which is a company or limited liability partnership, and
(b)
the registered office of which is situated in England and Wales (or in
Wales).
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Legal Services Bill [HL]
Schedule 11 — Licensing rules
Part 3 — Practice requirements
186

Licensed activities
16
Licensing rules must provide that a licensed body may carry on a licensed
activity only through a person who is entitled to carry on the activity.
Compliance with regulatory arrangements etc
17    (1)
Licensing rules must include the following provision.
5
      (2)
A licensed body must at all times have suitable arrangements in place to
ensure that—
(a)
it, and its managers and employees, comply with the duties imposed
by section 176, and
(b)
it, and any person to whom sub-paragraph (3) applies, maintain the
10
professional principles set out in section 1(3).
      (3)
This sub-paragraph applies to any manager or employee of the licensed
body who is an authorised person in relation to an activity which is a
reserved legal activity.
      (4)
A licensed body must at all times have suitable arrangements in place to
15
ensure that non-authorised persons subject to the duty imposed by section
90 in relation to the licensed body comply with that duty.
      (5)
Licensing rules may make provision as to the arrangements which are
suitable for the purposes of rules made under sub-paragraphs (2) and (4).
Disqualified employees
20
18    (1)
Licensing rules must include the following requirement.
      (2)
A licensed body may not employ a person who under this Part of this Act is
disqualified from being an employee of a licensed body.
Indemnification arrangements and compensation arrangements
19    (1)
For the purpose of giving effect to indemnification arrangements and
25
compensation arrangements, licensing rules may—
(a)
authorise or require the licensing authority to establish and maintain
a fund or funds;
(b)
authorise or require the licensing authority to take out and maintain
insurance with authorised insurers;
30
(c)
require licensed bodies or licensed bodies of any specific description
to take out and maintain insurance with authorised insurers.
      (2)
In this paragraph “authorised insurer” has the same meaning as in section
64.
Accounts
35
20    (1)
The licensing rules must make provision as to the treatment of money within
sub-paragraph (2), and the keeping of accounts in respect of such money.
      (2)
The money referred to in sub-paragraph (1) is money (including money held
on trust) which is received, held or dealt with by the licensed body, its
managers and employees for clients or other persons.
40