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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)

243

 

(d)   

for the making of grants in respect of a compensation claim

before it is finally determined;

(e)   

for a grant to be made by way of loan in such circumstances

and on such terms as may be prescribed in, or determined in

accordance with, the rules;

5

(f)   

for a grant to be made by way of making good a deficiency in

monies held in trust by the Society under paragraph 6 or 6A

of Schedule 1;

(g)   

as to the minimum and maximum grants payable in respect

of a compensation claim (or a claim of a prescribed

10

description);

(h)   

for the Society to be subrogated, to such extent as may be

prescribed, to any rights and remedies of a person to whom a

grant is made in relation to the loss in respect of which the

grant is made.

15

(3)   

The circumstances which may be prescribed by virtue of subsection

(2)(a) include in particular—

(a)   

the nature of the loss;

(b)   

in a case within subsection (1)(a) or (b), the nature of the act

or omission.

20

(4)   

For the purposes of subsection (2)(f), there is a deficiency if the

monies mentioned in that subsection are insufficient to satisfy the

claims of all persons with a beneficial interest in the monies.

(5)   

The Society may prepare and publish guidance as to the criteria it

will apply in deciding whether to make a grant in respect of a

25

compensation claim, or any part of a compensation claim.

(6)   

Where the Society decides—

(a)   

not to make a grant in respect of a compensation claim or any

part of a compensation claim, or

(b)   

to make a grant of less than the amount claimed,

30

   

it must give reasons for its decision.

(7)   

Rules under subsection (1) which are not regulatory arrangements

within the meaning of the Legal Services Act 2007 are to be treated as

such arrangements for the purposes of that Act.

(8)   

In this section—

35

“compensation claim” means a claim for the Society to make a

grant of the kind mentioned in subsection (1);

“prescribed” means prescribed in rules under subsection (1).

36A     

Compensation funds

(1)   

Compensation rules may require or authorise the Society to establish

40

or maintain a fund or funds (“compensation funds”) for the purpose

of making grants in respect of compensation claims.

(2)   

Compensation rules may require solicitors, or solicitors of a

description prescribed in the rules, to make contributions to

compensation funds of such amounts, at such times and in such

45

circumstances, as may be prescribed in or determined in accordance

with the rules.

 

 

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

244

 

(3)   

Any amount payable by virtue of such a requirement may be

recovered as a debt due to the Society.

(4)   

Subsection (2) does not apply to a solicitor who is a Crown

Prosecutor.

(5)   

The Society may invest any money which forms part of a

5

compensation fund in any investments in which trustees may invest

under the general power of investment in section 3 of the Trustee Act

2000 (as restricted by sections 4 and 5 of that Act).

(6)   

The Society may insure with authorised insurers, in relation to

compensation funds, for such purposes and on such terms as it

10

considers appropriate.

(7)   

The Society may, in such circumstances and subject to such

conditions as may be prescribed in or determined in accordance with

compensation rules—

(a)   

borrow for the purposes of a compensation fund;

15

(b)   

charge investments which form part of a compensation fund

as security for borrowing by the Society for the purposes of

that fund.

(8)   

A compensation fund may be applied by the Society for the purposes

mentioned in subsection (9) (in addition to the making of grants in

20

respect of compensation claims).

(9)   

The purposes are—

(a)   

payment of premiums on insurance policies effected under

subsection (6);

(b)   

repayment of money borrowed by the Society for the

25

purposes of the fund and payment of interest on any money

so borrowed;

(c)   

payment of any other costs, charges or expenses incurred by

the Society in establishing, maintaining, protecting

administering or applying the fund;

30

(d)   

payment of any costs, charges or expenses incurred by the

Society in exercising its powers under Part 2 of Schedule 1;

(e)   

payment of any costs or damages incurred by the Society, its

employees or agents as a result of proceedings against it or

them for any act or omission of its or theirs in good faith and

35

in the exercise or purported exercise of such powers.

(10)   

In this section—

“compensation claim” has the same meaning as in section 36;

“compensation fund” has the meaning given by subsection (1);

“compensation rules” means rules under section 36(1).”

40

38         

In section 37 (professional indemnity)—

(a)   

in subsection (1) for “Council, with the concurrence of the Master of

the Rolls,” substitute “Society”, and

(b)   

in subsection (3)(h)—

(i)   

for “Council” substitute “Society”,

45

(ii)   

for “they consider” substitute “it considers”, and

(iii)   

after “being” insert “, or have been,”.

 

 

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

245

 

39         

Omit section 37A (redress for inadequate professional services).

40         

Omit section 40 (solicitor not to commence or defend actions while in

prison).

41    (1)  

Section 41 (employment by solicitor of person struck off or suspended) is

amended as follows.

5

      (2)  

After subsection (1A) insert—

“(1B)   

Where—

(a)   

a solicitor (“the employed solicitor”) is employed by another

solicitor in accordance with a written permission granted

under this section, and

10

(b)   

the employed solicitor is disqualified from practising as a

solicitor by reason of a fact mentioned in subsection (1)(b) or

(c),

   

section 20(1) does not apply in relation to anything done by the

employed solicitor in the course of that employment.”

15

      (3)  

In subsection (3)—

(a)   

for “Master of the Rolls who” substitute “High Court which”, and

(b)   

in paragraph (b) for “he” substitute “it”.

      (4)  

In subsection (4) for “shall” to the end substitute “may—

(a)   

order that his name be struck off the roll,

20

(b)   

order that he be suspended from practice for such period as

the Tribunal or court thinks fit, or

(c)   

make such other order in the matter as it thinks fit.”

      (5)  

After that subsection insert—

“(4A)   

In relation to an appeal under subsection (3) the High Court may

25

make such order as it thinks fit as to payment of costs.

(4B)   

The decision of the High Court on an appeal under subsection (3)

shall be final.”

      (6)  

Omit subsection (5).

42    (1)  

Section 43 (control of solicitors’ employees and consultants) is amended as

30

follows.

      (2)  

For subsections (1), (1A) and (2) substitute—

“(1)   

Where a person who is or was involved in a legal practice but is not

a solicitor—

(a)   

has been convicted of a criminal offence which is such that in

35

the opinion of the Society it would be undesirable for the

person to be involved in a legal practice in one or more of the

ways mentioned in subsection (1A), or

(b)   

has, in the opinion of the Society, occasioned or been a party

to, with or without the connivance of a solicitor, an act or

40

default in relation to a legal practice which involved conduct

on his part of such a nature that in the opinion of the Society

it would be undesirable for him to be involved in a legal

practice in one or more of the ways mentioned in subsection

(1A),

45

 

 

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

246

 

   

the Society may either make, or make an application to the Tribunal

for it to make, an order under subsection (2) with respect to that

person.

(1A)   

A person is involved in a legal practice for the purposes of this

section if the person—

5

(a)   

is employed or remunerated by a solicitor in connection with

the solicitor’s practice;

(b)   

is undertaking work in the name of, or under the direction or

supervision of, a solicitor;

(c)   

is employed or remunerated by a recognised body;

10

(d)   

is employed or remunerated by a manager or employee of a

recognised body in connection with that body’s business;

(e)   

is a manager of a recognised body;

(f)   

has or intends to acquire an interest in such a body.

(2)   

An order made by the Society or the Tribunal under this subsection

15

is an order which states one or more of the following—

(a)   

that as from the specified date—

(i)   

no solicitor shall employ or remunerate, in connection

with his practice as a solicitor, the person with respect

to whom the order is made,

20

(ii)   

no employee of a solicitor shall employ or

remunerate, in connection with the solicitor’s

practice, the person with respect to whom the order is

made,

(iii)   

no recognised body shall employ or remunerate that

25

person, and

(iv)   

no manager or employee of a recognised body shall

employ or remunerate that person in connection with

the business of that body,

   

except in accordance with a Society permission;

30

(b)   

that as from the specified date no recognised body or

manager or employee of such a body shall, except in

accordance with a Society permission, permit the person with

respect to whom the order is made to be a manager of the

body;

35

(c)   

that as from the specified date no recognised body or

manager or employee of such a body shall, except in

accordance with a Society permission, permit the person with

respect to whom the order is made to have an interest in the

body.

40

(2A)   

The Society may make regulations prescribing charges to be paid to

the Society by persons who are the subject of an investigation by the

Society as to whether there are grounds for the Society—

(a)   

to make an order under subsection (2), or

(b)   

to make an application to the Tribunal for it to make such an

45

order.

(2B)   

Regulations under subsection (2A) may—

(a)   

make different provision for different cases or purposes;

 

 

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

247

 

(b)   

provide for the whole or part of a charge payable under the

regulations to be repaid in such circumstances as may be

prescribed by the regulations.

(2C)   

Any charge which a person is required to pay under regulations

under subsection (2A) is recoverable by the Society as a debt due to

5

the Society from the person.”

      (3)  

In subsection (5) omit—

(a)   

“by any solicitor”, and

(b)   

the words from “but” to the end.

      (4)  

After that subsection insert—

10

“(5A)   

In this section—

“manager”, in relation to a recognised body, has the same

meaning as it has in relation to a body in the Legal Services

Act 2007 (see section 207 of that Act);

“recognised body” means a body recognised under section 9 of

15

the Administration of Justice Act 1985;

“specified date” means such date as may be specified in the

order;

“Society permission” means permission in writing granted by

the Society for such period and subject to such conditions as

20

the Society may think fit to specify in the permission.

(5B)   

A person has an interest in a recognised body for the purposes of this

section if the person has an interest in that body within the meaning

of Part 5 of the Legal Services Act 2007 (see sections 72 and 109 of that

Act).”

25

43         

In section 44 (offences in connection with orders under section 43(2))—

(a)   

for subsection (1) substitute—

“(1)   

It is an offence for a person in respect of whom there is in

force an order under section 43(2) which contains provision

within section 43(2)(a)—

30

(a)   

to seek or accept any employment or remuneration

from a solicitor, or an employee of a solicitor, in

connection with the practice carried on by that

solicitor without previously informing the solicitor or

employee of the order;

35

(b)   

to seek or accept any employment or remuneration

from a recognised body, or a manager or employee of

a recognised body, in connection with that body’s

business, without previously informing the body, or

manager or employee, of the order.

40

(1A)   

It is an offence for a person in respect of whom there is in

force an order under section 43(2) which contains provision

within section 43(2)(b) to seek or accept a position as a

manager of a recognised body, without previously informing

that body of the order.

45

(1B)   

It is an offence for a person in respect of whom there is in

force an order under section 43(2) which contains provision

within section 43(2)(c) to seek or accept an interest in a

 

 

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

248

 

recognised body from any person, without previously

informing that person and (if different) the recognised body

of the order.

(1C)   

A person guilty of an offence under subsection (1), (1A) or

(1B) is liable on summary conviction to a fine not exceeding

5

level 3 on the standard scale.”,

(b)   

in subsection (2) for “the employment of that person” substitute “the

taking of any action”, and

(c)   

after subsection (4) insert—

“(5)   

In this section—

10

“manager” has the same meaning as in section 43;

“recognised body” means a body recognised under

section 9 of the Administration of Justice Act 1985;

   

and for the purposes of subsection (1B) a person seeks or

accepts an interest in a recognised body if the person seeks or

15

accepts an interest which if it were obtained by the person

would result in the person having an interest in that body

within the meaning of Part 5 of the Legal Services Act 2007

(see sections 72 and 109 of that Act).”

44         

For section 44B (examination of files) substitute—

20

“44B    

Provision of information and documents by solicitors etc

(1)   

The Society may by notice require a person to whom this section

applies—

(a)   

to provide information, or information of a description,

specified in the notice, or

25

(b)   

produce documents, or documents of a description, specified

in the notice.

(2)   

This section applies to—

(a)   

a solicitor;

(b)   

an employee of a solicitor;

30

(c)   

a recognised body;

(d)   

an employee or manager of, or a person with an interest in, a

recognised body.

(3)   

The Society may give a notice under this section only if it is satisfied

that it is necessary to do so for the purpose of investigating—

35

(a)   

whether there has been professional misconduct by a

solicitor;

(b)   

whether a solicitor, or an employee of a solicitor, has failed to

comply with any requirements imposed by or by virtue of

this Act or any rules made by the Society;

40

(c)   

whether a recognised body, or any of its managers or

employees has failed to comply with any requirement

imposed by or by virtue of the Administration of Justice Act

1985 or any rules made by the Society and applicable to the

body, manager or employee by virtue of section 9 of that Act;

45

(d)   

whether there are grounds for making, or making an

application to the Tribunal for it to make, an order under

 

 

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

249

 

section 43(2) with respect to a person who is or was involved

in a legal practice (within the meaning of section 43(1A)).

(4)   

A notice under this section—

(a)   

may specify the time and place at which, and manner and

form in which, the information is to be provided or document

5

is to be produced;

(b)   

must specify the period within which the information is to be

provided or the document produced;

(c)   

may require the information to be provided or document to

be produced to the Society or to a person specified in the

10

notice.

(5)   

The Society may pay to any person such reasonable costs as may be

incurred by that person in connection with the provision of any

information, or production of any document, by that person

pursuant to a notice under this section.

15

(6)   

Paragraphs 9(3) and (4) and 13, 15 and 16 of Schedule 1 apply in

relation to the powers to obtain information conferred by this

section, but for this purpose—

(a)   

paragraph 9 of that Schedule has effect as if—

(i)   

in sub-paragraph (3) for “such documents” there were

20

substituted “information to which a notice given to

him under section 44B applies”,

(ii)   

in that sub-paragraph for “sub-paragraph (1)” there

were substituted “the notice”,

(iii)   

in sub-paragraph (4) for “produce” (in the first place)

25

to the end there were substituted “provide

information pursuant to a notice under section 44B to

provide the information to any person appointed by

the Society at such time and place as may be specified

in the order.”, and

30

(b)   

the reference to the solicitor or his personal representative in

paragraph 13 of that Schedule is to be construed as a

reference to the person to whom the notice was given under

this section.

(7)   

Paragraphs 9 (other than sub-paragraphs (1) and (3)), 12, 13, 15 and

35

16 of Schedule 1 apply in relation to the powers to obtain documents

conferred by this section as they apply in relation to the powers

conferred by paragraph 9(1) of that Schedule, except that for this

purpose—

(a)   

any reference in paragraph 9 of that Schedule to a person

40

appointed, or to a requirement, under sub-paragraph (1) of

that paragraph is to be construed as a reference to a person

appointed, or to a requirement to produce documents, under

this section,

(b)   

any reference in that paragraph to any such documents as are

45

mentioned in paragraph 9(1) of that Schedule is to be

construed as a reference to any documents to which a notice

under this section applies,

(c)   

the references to the solicitor or his firm in paragraph 9(5) and

(6) of that Schedule, and the reference to the solicitor or

50

personal representative in paragraph 9(7) of that Schedule,

 

 

 
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