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 1 — The Solicitors Act 1974 (c. 47)
236

(2)
For the purposes of this Act, a sole solicitor endorsement shall be
deemed not to be in force at any time while it is suspended.
(3)
Subsection (2) is subject to section 13ZA(2).
17B
Duration and publicity of suspension of sole solicitor endorsement
(1)
Where a sole solicitor endorsement is suspended, it expires on such
5
date as may be prescribed by regulations under section 28.
(2)
Where a solicitor’s sole solicitor endorsement is suspended—
(a)
by an order under section 13(4), or
(b)
by virtue of section 17A(1) in circumstances where the period
of that suspension expires before the date on which his
10
endorsement will expire,

the solicitor may at any time before the endorsement expires apply
to the Society to terminate the suspension.
(3)
Section 16(4) to (7) apply in relation to an application under
subsection (2) as they apply in relation to an application under
15
section 16(3).
(4)
Where a solicitor’s sole solicitor endorsement is suspended by an
order under section 13(4) or by virtue of section 17A(1), the Society
shall forthwith cause notice of that suspension to be published and a
note of it to be entered against the name of the solicitor on the roll.
20
(5)
Where any suspension is terminated by virtue of section 16(4) or (5),
as applied by subsection (3) of this section, the Society shall forthwith
cause a note of that termination to be entered against the name of the
solicitor on the roll and, if so requested in writing by the solicitor, a
notice of it to be published.”
25
23
For section 18 (evidence as to holding of practising certificates) substitute—
“18
Extracts from the roll or register etc as evidence
(1)
An extract from the roll, or an extract from the register kept under
section 10A, which is certified as correct by the Society is evidence of
the matters mentioned in it.
30
(2)
A certificate from the Society stating that—
(a)
a person’s name is or was on the roll, or
(b)
a person is or was registered in the register kept under
section 10A,

is evidence of the matters stated.”
35
24
Omit section 19 (rights of practising and rights of audience).
25
For section 20 (unqualified person not to act as solicitor) substitute—
“20
Unqualified person not to act as solicitor
(1)
No unqualified person is to act as a solicitor.
(2)
Any person who contravenes subsection (1) is guilty of an offence
40
and liable on conviction on indictment to imprisonment for not more
than 2 years or to a fine, or to both.”
26
Omit—

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 1 — The Solicitors Act 1974 (c. 47)
237

(a)
sections 22 and 22A (unqualified person not to prepare certain
instruments etc), and
(b)
section 23 (unqualified person not to prepare papers for probate etc).
27
In section 24 (application of penal provisions to body corporate), in
subsection (2) from “sections” to the end substitute “section 20 the reference
5
to an unqualified person and the reference to a person both include a
reference to a body corporate.”
28
In section 26 (time limit for commencement of certain proceedings) omit “,
22 or 23”.
29
Omit section 27 (saving for persons authorised to conduct legal
10
proceedings).
30    (1)
Section 28 (regulations) is amended as follows.
      (2)
In subsection (1)—
(a)
for “Master of the Rolls” substitute “Society”,
(b)
omit “, with the concurrence of the Secretary of State and the Lord
15
Chief Justice,”,
(c)
in paragraph (c) omit “and applications for them”,
(d)
after that paragraph insert—
“(ca)
sole solicitor endorsements and applications for
them,” and
20
(e)
in paragraph (d) for “section 9” substitute “section 10A”.
      (3)
Omit subsections (2) and (3).
      (4)
In subsection (3A)—
(a)
for “may—” insert “may (among other things)—
(za)
make provision about the form in which the roll is to
25
be kept and the manner in which entries are to be
made, altered and removed;”,
(b)
omit “and” at the end of paragraph (b), and
(c)
after paragraph (d) insert—
“(e)
require the information on the roll to be made
30
available to the public;
(f)
specify the manner in which information is to be
made so available and require it to be made so
available during office hours and without charge.”
      (5)
After that subsection insert—
35
“(3B)
Regulations about practising certificates or sole solicitor
endorsements may (among other things)—
(a)
prescribe the form and manner in which applications for, or
relating to, practising certificates or sole solicitor
endorsements are to be made;
40
(b)
prescribe information which must be included in or
accompany such applications;
(c)
make provision about time limits for dealing with such
applications, and confer on a person power to extend or bring
forward such a time limit in prescribed circumstances;
45

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 1 — The Solicitors Act 1974 (c. 47)
238

(d)
prescribe the requirements which applicants for practising
certificates must satisfy before they may be issued with a
practising certificate;
(e)
prescribe descriptions of applicants, and conditions in
relation to them, for the purposes of section 10(2)
5
(circumstances in which practising certificates must be issued
subject to prescribed conditions);
(f)
prescribe descriptions of applicants, and conditions in
relation to them, for the purposes of section 13ZA(5)
(circumstances in which a practising certificate endorsed
10
with a sole solicitor endorsement after it was issued must be
made subject to prescribed conditions);
(g)
prescribe circumstances for the purposes of section 10(3)
(circumstances in which application may be refused etc in the
public interest);
15
(h)
make provision about when conditions imposed on
practising certificates take effect (including provision
conferring power on the Society to direct that a condition is
not to have effect until the conclusion of any appeal in
relation to it);
20
(i)
make provision for the commencement, duration,
replacement, withdrawal and expiry of practising certificates
or sole solicitor endorsements;
(j)
prescribe circumstances for the purposes of section 13A(2)
(circumstances in which conditions can be imposed during
25
period of practising certificate);
(k)
require solicitors who hold practising certificates to notify the
Society of such matters as may be prescribed, at such times,
or in such circumstances as may be prescribed.
(3C)
Regulations about the keeping of the register under section 10A may
30
(among other things)—
(a)
make provision about the form in which the register is to be
kept and the manner in which entries are to be made, altered
and removed;
(b)
require information of a specified kind to be included in
35
entries in the register;
(c)
require information (or information of a specified
description) on the register to be made available to the public;
(d)
specify the manner in which it is to be made so available and
require it to be made so available during office hours and
40
without charge.
(3D)
Regulations under this section may make provision for appeals to
the High Court against decisions made by the Society under the
regulations.
(3E)
In relation to an appeal under regulations made by virtue of
45
subsection (3D), the High Court may make such order as it thinks fit
as to payment of costs.
(3F)
The decision of the High Court on such an appeal shall be final.
(3G)
Regulations under this section may—

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 1 — The Solicitors Act 1974 (c. 47)
239

(a)
provide for a person to exercise a discretion in dealing with
any matter;
(b)
include incidental, supplementary and consequential
provision;
(c)
make transitory or transitional provision and savings;
5
(d)
make provision generally or only in relation to specified
cases or subject to specified exceptions;
(e)
make different provision for different cases.”
      (6)
Omit subsections (4) and (5).
31    (1)
Section 31 (rules as to professional practice, conduct and discipline) is
10
amended as follows.
      (2)
In subsection (1)—
(a)
for “Council may, if they think fit,” substitute “Society may”,
(b)
omit “, with the concurrence of the Master of the Rolls,”,
(c)
after “conduct” insert “, fitness to practise”,
15
(d)
for “Council” (in the second place) substitute “Society”, and
(e)
after “being” insert “, or have been,”.
      (3)
After that subsection insert—
“(1A)
The powers conferred on the Society by subsection (1) include power
to make, in relation to solicitors, provision of a kind which the
20
Society would be prohibited from making but for section 157(5)(c) of
the Legal Services Act 2007 (exception from prohibition on approved
regulators making provision for redress).”
      (4)
Omit subsections (3) and (4).
32    (1)
Section 32 (accounts rules and trust accounts rules) is amended as follows.
25
      (2)
In subsection (1)—
(a)
for “Council” (in the first place) substitute “Society”,
(b)
omit “, with the concurrence of the Master of the Rolls”,
(c)
for paragraphs (a) and (b) substitute—
“(a)
as to the opening and keeping by solicitors of
30
accounts at banks or with building societies for
money within subsection (1A);
(aa)
as to the operation by solicitors of accounts kept by
their clients or other persons at banks or with
building societies or other financial institutions;
35
(b)
as to the keeping by solicitors of accounts containing
information as to money received, held or paid by
them for or on account of their clients or other persons
(including money received, held or paid under a
trust); and”,
40
(d)
in paragraph (c) of that subsection—
(i)
for “Council” substitute “Society”,
(ii)
for “them” substitute “it”, and
(iii)
after “being” insert “, or have been,”, and
(e)
omit from “and the rules” to the end.
45

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 1 — The Solicitors Act 1974 (c. 47)
240

      (3)
After that subsection insert—
“(1A)
The money referred to in subsection (1) is money (including money
held on trust) which is received, held or dealt with for clients or other
persons.”
      (4)
Omit subsection (2).
5
      (5)
In subsection (4)—
(a)
for “Council” substitute “Society”,
(b)
omit “or (2)”, and
(c)
after “solicitor” (in both places) insert “or any of his employees”.
      (6)
In subsection (5) for “by virtue” to the end substitute “or a part of the rules.”
10
      (7)
Omit subsection (6).
33    (1)
Section 33 (interest on clients’ money) is amended as follows.
      (2)
For subsection (1) substitute—
“(1)
Rules under section 32 may require a solicitor to pay interest, or sums
in lieu of and equivalent to interest, to a client, any other person or
15
any trust, for whom the solicitor holds money.”
      (3)
In subsection (2), omit from “and the rules” to the end.
      (4)
For subsection (3) substitute—
“(3)
Except as provided by the rules, a solicitor is not liable to account to
any client, other person or trust for interest received by the solicitor
20
on money held at a bank or building society in an account which is
for money received or held for, or on account of—
(a)
the solicitor’s clients, other persons or trusts, generally, or
(b)
that client, person or trust, separately.”
      (5)
For subsection (4) substitute—
25
“(4)
Rules under section 32 may—
(a)
prescribe the circumstances in which a solicitor may make
arrangements to limit or exclude an obligation imposed on
the solicitor by rules made by virtue of this section, and
(b)
prescribe the requirements to be met by and in relation to
30
those arrangements.”
34    (1)
Section 33A (inspection of practice bank accounts etc) is amended as follows.
      (2)
In subsection (1)—
(a)
for “Council” (in each place) substitute “Society”, and
(b)
omit “, with the concurrence of the Master of the Rolls,”.
35
      (3)
In subsection (2) for “Council” substitute “Society”.
35    (1)
Section 34 (accountants’ reports) is amended as follows.
      (2)
For subsections (1) to (5A) substitute—
“(1)
The Society may make rules requiring solicitors to provide the
Society with reports signed by an accountant (in this section referred
40

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 1 — The Solicitors Act 1974 (c. 47)
241

to as an “accountant’s report”) at such times or in such circumstances
as may be prescribed by the rules.
(2)
The rules may specify requirements to be met by, or in relation to, an
accountant’s report (including requirements relating to the
accountant who signs the report).”
5
      (3)
In subsection (6) for “this section or of any rules made under it” substitute
“any rules made under this section”.
      (4)
Omit subsections (7) and (8).
      (5)
At the end insert—
“(9)
Where an accountant, during the course of preparing an
10
accountant’s report—
(a)
discovers evidence of fraud or theft in relation to money held
by a solicitor for a client or any other person (including
money held on trust) or money held in an account of a client
of a solicitor, or an account of another person, which is
15
operated by the solicitor, or
(b)
obtains information which the accountant has reasonable
cause to believe is likely to be of material significance in
determining whether a solicitor is a fit and proper person to
hold money for clients or other persons (including money
20
held on trust) or to operate an account of a client of the
solicitor or an account of another person,

the accountant must immediately give a report of the matter to the
Society.
(10)
No duty to which an accountant is subject is to be regarded as
25
contravened merely because of any information or opinion
contained in a report under subsection (9).”
36
After section 34 insert—
“Sole solicitors
34A
Employees of solicitors
30
(1)
Rules made by the Society may provide for any rules made under
section 31, 32, 33A or 34 to have effect in relation to employees of
solicitors with such additions, omissions or other modifications as
appear to the Society to be necessary or expedient.
(2)
If any employee of a solicitor fails to comply with rules made under
35
section 31 or 32, as they have effect in relation to the employee by
virtue of subsection (1), any person may make a complaint in respect
of that failure to the Tribunal.
(3)
If any employee of a solicitor fails to comply with rules made under
section 34, as they have effect in relation to the employee by virtue of
40
subsection (1), a complaint in respect of that failure may be made to
the Tribunal by or on behalf of the Society.
34B
Employees of solicitors: accounts rules etc
(1)
Where rules made under section 32(1) have effect in relation to
employees of solicitors by virtue of section 34A(1), section 85 applies
45

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 1 — The Solicitors Act 1974 (c. 47)
242

in relation to an employee to whom the rules have effect who keeps
an account with a bank or building society in pursuance of such rules
as it applies in relation to a solicitor who keeps such an account in
pursuance of rules under section 32.
(2)
Subsection (3) applies where rules made under section 32—
5
(a)
contain any such provision as is referred to in section 33(1),
and
(b)
have effect in relation to employees of solicitors by virtue of
section 34A(1).
(3)
Except as provided by the rules, an employee to whom the rules are
10
applied is not liable to account to any client, other person or trust for
interest received by the employee on money held at a bank or
building society in an account which is for money received or held
for, or on account of—
(a)
clients of the solicitor, other persons or trusts, generally, or
15
(b)
that client, person or trust, separately.
(4)
Subsection (5) applies where rules made under section 33A(1) have
effect in relation to employees of solicitors by virtue of section
34A(1).
(5)
The Society may disclose a report on or information about the
20
accounts of any employee of a solicitor obtained in pursuance of such
rules for use—
(a)
in investigating the possible commission of an offence by the
solicitor or any employees of the solicitor, and
(b)
in connection with any prosecution of the solicitor or any
25
employees of the solicitor consequent on the investigation.
(6)
Where rules made under section 34 have effect in relation to
employees of solicitors by virtue of subsection (1), section 34(9) and
(10) apply in relation to such an employee as they apply in relation
to a solicitor.”
30
37
For section 36 (compensation fund) substitute—
“36
Compensation grants
(1)
The Society may make rules concerning the grant of compensation
by the Society in respect of loss that a person has suffered, or is likely
to suffer, as a result of—
35
(a)
an act or omission of a solicitor or former solicitor;
(b)
an act or omission of an employee or former employee of a
solicitor or former solicitor;
(c)
the exercise by the Society of any of its powers under Part 2
of Schedule 1.
40
(2)
The rules may (among other things) make provision—
(a)
as to the circumstances in which such grants may and may
not be made;
(b)
as to the form and manner in which a compensation claim is
to be made;
45
(c)
as to the procedure for determining compensation claims;