Legal Services Bill [HL]

House of Commons

Session 2006 - 07
Internet Publications
Other Bills before Parliament

Legal Services Bill [HL]

Legal Services Bill [HL]
Part 4 — Regulation of approved regulators
23

43
Intervention directions: enforcement
(1)
If at any time it appears to the Board that an approved regulator has failed to
comply with an obligation imposed on it by, or by virtue of, an intervention
direction or section 42(2), the Board may make an application to the High
Court under this section.
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(2)
If, on an application under subsection (1), the High Court decides that the
approved regulator has failed to comply with the obligation in question, it may
order the approved regulator to take such steps as the High Court directs for
securing that the obligation is complied with.
(3)
This section is without prejudice to any other powers conferred on the Board
10
by this Part.
44
Revocation of intervention directions
(1)
An intervention direction has effect until such time as it is revoked by the
Board (whether on the application of the approved regulator or otherwise).
(2)
Part 2 of Schedule 8 makes provision about the procedure which must be
15
complied with before an intervention direction is revoked and the manner in
which notice of the revocation is to be given.
Cancellation of approval
45
Cancellation of designation as approved regulator
(1)
The Lord Chancellor may by order cancel a body’s designation as an approved
20
regulator—
(a)
in relation to all the reserved legal activities in relation to which it is an
approved regulator, or
(b)
in relation to one or more, but not all, of those reserved legal activities,

with effect from a date specified in the order.
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(2)
But the Lord Chancellor may only make an order under subsection (1) in
accordance with a recommendation made by the Board under subsection (3) or
(5).
(3)
The Board must recommend that an order is made cancelling a body’s
designation as an approved regulator in relation to one or more reserved legal
30
activities, if—
(a)
the body applies to the Board for such a recommendation to be made,
(b)
the application is made in such form and manner as may be prescribed
by rules made by the Board, and is accompanied by the prescribed fee,
and
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(c)
the body publishes a notice giving details of the application in
accordance with such requirements as may be specified in rules made
by the Board.
(4)
In this section “the prescribed fee”, in relation to an application, means the fee
specified in, or determined in accordance with, rules made by the Board, with
40
the consent of the Lord Chancellor.

Legal Services Bill [HL]
Part 4 — Regulation of approved regulators
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(5)
The Board may recommend that an order is made cancelling a body’s
designation as an approved regulator in relation to one or more reserved legal
activities if it is satisfied—
(a)
that an act or omission of an approved regulator (or a series of such acts
or omissions) has had, or is likely to have, an adverse impact on one or
5
more of the regulatory objectives, and
(b)
that, in all the circumstances of the case, it is appropriate to cancel the
body’s designation in relation to the activity or activities in question.
(6)
The Board may not determine that it is appropriate to cancel a body’s
designation in relation to an activity or activities unless it is satisfied that the
10
matter cannot be adequately addressed by the Board exercising the powers
available to it under sections 31 to 43.
(7)
Schedule 9 makes further provision about the making of recommendations
under subsection (5).
(8)
If the Lord Chancellor decides not to make an order in response to a
15
recommendation made under subsection (3) or (5), the Lord Chancellor must
give the Board notice of the decision and the reasons for it.
(9)
The Lord Chancellor must publish a notice given under subsection (8).
(10)
The Board may not make a recommendation under subsection (5) in respect of
a body’s designation as an approved regulator in relation to a reserved legal
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activity at any time when, by virtue of Part 2 of Schedule 5 (protection of rights
during a transitional period), any person is being treated as authorised by the
body to carry on that activity.
46
Cancellation of designation: further provision
(1)
This section applies where a body (“the former regulator”) has its designation
25
in relation to one or more reserved legal activities cancelled by an order under
section 45.
(2)
The Lord Chancellor may by order make—
(a)
such modifications of provisions made by or under any enactment
(including this Act or any enactment passed after this Act), prerogative
30
instrument or other instrument or document, and
(b)
such transitional or consequential provision,

as the Lord Chancellor considers necessary or expedient in consequence of the
cancellation.
(3)
The Lord Chancellor may, by order, make transfer arrangements.
35
(4)
“Transfer arrangements” are arrangements in accordance with which each
person authorised by the former regulator who consents to the arrangements
is, from the time the cancellation takes effect, treated as being authorised to
carry on each protected activity by either—
(a)
a relevant approved regulator, in relation to the protected activity, who
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consents to the transfer arrangements, or
(b)
the Board acting in its capacity as a relevant approved regulator in
relation to the protected activity by virtue of an order made under
section 62.
(5)
The transfer arrangements—
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Legal Services Bill [HL]
Part 4 — Regulation of approved regulators
25

(a)
must make such provision as is necessary to ensure that, where a
person is treated under those arrangements as being authorised to
carry on a protected activity by the new regulator, that person is subject
to the regulatory arrangements of the new regulator;
(b)
may make provision requiring amounts held by the former regulator
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which represent amounts paid to it by way of practising fees by the
persons to whom the transfer arrangements apply (or a part of the
amounts so held) to be paid to the new regulator and treated as if they
were amounts paid by those persons by way of practising fees to the
new regulator.
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(6)
Subsection (5)(a) is subject to any transitional provision which may be made by
the transfer arrangements, including provision modifying the regulatory
arrangements of the new regulator as they apply to persons to whom the
transfer arrangements apply.
(7)
The Lord Chancellor may make an order under this section only if—
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(a)
the Board has made a recommendation in accordance with section 47,
and
(b)
the order is in the same form as, or in a form which is not materially
different from, the draft order annexed to that recommendation.
(8)
For the purposes of this section—
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(a)
a person is “authorised by the former regulator” if immediately before
the time the cancellation takes effect the person is authorised by the
former regulator (other than by virtue of a licence under Part 5) to carry
on an activity which is a reserved legal activity to which the
cancellation relates, and
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(b)
in relation to that person—
(i)
the activity which that person is authorised to carry on as
mentioned in paragraph (a) is a “protected activity”, and
(ii)
“the new regulator” means the approved regulator within
paragraph (a) or (b) of subsection (4).
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(9)
In this section “practising fee”, in relation to an approved regulator, means a
fee payable by a person under the approved regulator’s regulatory
arrangements in circumstances where the payment of the fee is a condition
which must be satisfied for that person to be authorised by the approved
regulator to carry on one or more activities which are reserved legal activities.
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(10)
But for the purposes of this section “practising fee” does not include a fee
payable by a licensed body to its licensing authority under licensing rules.
47
The Board’s power to recommend orders made under section 46
(1)
The Board may recommend to the Lord Chancellor that the Lord Chancellor
make an order under section 46 in the form of a draft order prepared by the
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Board and annexed to the recommendation.
(2)
Before making a recommendation under this section, the Board must publish a
draft of—
(a)
the proposed recommendation, and
(b)
the proposed draft order.
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(3)
The draft must be accompanied by a notice which states that representations
about the proposals may be made to the Board within a specified period.

Legal Services Bill [HL]
Part 4 — Regulation of approved regulators
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(4)
Before making the recommendation, the Board must have regard to any
representations duly made.
(5)
If the draft order to be annexed to the recommendation differs from the draft
published under subsection (2)(b) in a way which in the opinion of the Board
is material, the Board must, before making the recommendation, publish the
5
draft order along with a statement detailing the changes made and the reasons
for those changes.
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Cancellation of designation: powers of entry etc
(1)
This section applies where a body (“the former regulator”) has its designation
in relation to one or more reserved legal activities cancelled by an order under
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section 45.
(2)
The Board may request the former regulator to provide assistance to the new
regulator and the Board, for the purpose of continuing regulation.
(3)
On an application by a person appointed by the Board to act on its behalf, a
judge of the High Court, Circuit judge or justice of the peace may issue a
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warrant authorising that person to—
(a)
enter and search the premises of the former regulator, and
(b)
take possession of any written or electronic records found on the
premises.
(4)
A person so authorised may, for the purpose of continuing regulation, take
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copies of written or electronic records found on a search carried out by virtue
of the warrant.
(5)
The judge or justice of the peace may not issue the warrant unless satisfied that
its issue is necessary or desirable for the purpose of continuing regulation.
(6)
The Lord Chancellor must make regulations—
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(a)
specifying further matters which a judge or justice of the peace must be
satisfied of, or matters which a judge or justice of the peace must have
regard to, before issuing a warrant, and
(b)
regulating the exercise of a power conferred by a warrant issued under
subsection (3) or by subsection (4) (whether by restricting the
30
circumstances in which a power may be exercised, by specifying
conditions to be complied with in the exercise of a power, or otherwise).
(7)
Regulations under subsection (6)(b) must in particular make provision as to
circumstances in which written or electronic records of which a person has
taken possession by virtue of a warrant issued under subsection (3) may be
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copied or must be returned.
(8)
But the Lord Chancellor may not make regulations under subsection (6)
unless—
(a)
they are made in accordance with a recommendation made by the
Board, or
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(b)
the Lord Chancellor has consulted the Board about the making of the
regulations.
(9)
The Board must make rules as to the persons it may appoint for the purposes
of subsection (3).
(10)
For the purposes of this section—
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Legal Services Bill [HL]
Part 4 — Regulation of approved regulators
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“authorised by the former regulator”, “protected activity” and “new
regulator” have the same meaning as for the purposes of section 46;
“the purpose of continuing regulation” means the purpose of enabling
persons authorised by the former regulator to continue to be authorised
and regulated in relation to the protected activity.
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Policy statements
49
The Board’s policy statements
(1)
The Board must prepare and issue a statement of policy with respect to the
exercise of its functions under—
(a)
section 31 (performance targets and monitoring);
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(b)
section 32 (directions);
(c)
section 35 (public censure);
(d)
section 37 (financial penalties);
(e)
section 41 (intervention directions);
(f)
section 45 (cancellation of designation as approved regulator);
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(g)
section 76 (cancellation of designation as licensing authority by order).
(2)
The Board may prepare and issue a statement of policy with respect to any
other matter.
(3)
In preparing a statement of policy, the Board must have regard to the principle
that its principal role is the oversight of approved regulators.
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(4)
The statement of policy prepared under subsection (1) must—
(a)
take account of the desirability of resolving informally matters which
arise between the Board and an approved regulator, and
(b)
specify how, in exercising the functions mentioned in that subsection,
the Board will comply with the requirements of section 3(3) (regulatory
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activities to be proportionate, consistent and targeted only at cases in
which action is needed, etc).
(5)
The Board’s policy in determining what the amount of a penalty under section
37 should be must include having regard to—
(a)
the seriousness of the failure in question, and
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(b)
the extent to which it was deliberate or reckless.
(6)
The Board may at any time alter or replace any statement issued under this
section.
(7)
If a statement is altered or replaced, the Board must issue the altered or
replacement statement.
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(8)
In exercising or deciding whether to exercise any of its functions, the Board
must have regard to any relevant policy statement published under this
section.
(9)
The Board must publish a statement issued under this section.
(10)
The Board may make a reasonable charge for providing a person with a copy
40
of a statement.