Legal Services Bill [HL]

House of Commons

Session 2006 - 07
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Other Bills before Parliament

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)
264

the discharge of the function by an individual (whether or not a
member of the Society’s staff).
(4)
Arrangements made under this section in respect of a function may
provide that the function is to be exercised in accordance with the
arrangements only (and not by the delegating body).
5
(5)
In subsection (4) “the delegating body” means—
(a)
in the case of arrangements under subsection (1), the Council,
(b)
in the case of arrangements under subsection (2), the
committee,
(c)
in the case of arrangements under subsection (3), the sub-
10
committee.
(6)
Subsections (2) and (3) have effect subject to any contrary direction
given by the Council.
(7)
Where arrangements under subsection (3) relate to a function
delegated by a committee under subsection (2), subsection (3) also
15
has effect subject to any contrary direction given by that committee.
(8)
Any power given by subsection (1), (2) or (3) may be exercised so as
to impose restrictions or conditions on the body or individual by
whom the function is to be discharged.
(9)
A committee or sub-committee may include or consist of individuals
20
other than—
(a)
members of the Council;
(b)
members of the Society;
(c)
solicitors.
(10)
A sub-committee of a committee may also include or consist of
25
individuals other than members of the committee.
(11)
The Council may make arrangements for the appointment and
removal of members of any committee to be made other than by the
Council.
(12)
A committee or sub-committee may regulate its own procedure,
30
including quorum.
(13)
The validity of any proceedings of a committee or sub-committee is
not affected by any vacancy among its members.
(14)
In this section “wholly-owned subsidiary” has the meaning given by
section 1159 of the Companies Act 2006.
35
(15)
This section is subject to any provision to the contrary made by or
under any enactment.”
72
In section 80 (powers to act on behalf of Society)—
(a)
in subsection (1) for “of any instrument made under it” substitute
“any other enactment (or of any instrument made under this Act or
40
any other enactment)”, and
(b)
omit subsection (2).
73
Omit sections 81 and 81A (administration of oaths and taking of affidavits).

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 1 — The Solicitors Act 1974 (c. 47)
265

74
Before section 87 (interpretation) insert—
“86A
Rules
(1)
Rules made by the Society under this Act may —
(a)
make provision generally or subject to exceptions or only in
relation to specified cases;
5
(b)
make different provision for different cases or circumstances
or for different purposes.
(2)
Without prejudice to the generality of subsection (1), any rules
prescribing a fee may provide for that fee to be reduced or waived in
such circumstances as may be specified in the rules.”
10
75
In section 87(1) (interpretation)—
(a)
in the definition of “client account”, for “in” to the end substitute
“subject to rules under section 32(1)(a)”,
(b)
after the definition of “sole solicitor” insert—
““sole solicitor endorsement” has the same meaning as
15
in section 1B;”, and
(c)
omit the following definitions—
“articles”
“controlled trust”
“duly certificated notary public”
20
“employee”
“indemnity conditions”
“replacement date”
“training conditions”.
76
In section 89 (consequential amendments etc.), omit subsection (7).
25
77    (1)
Schedule 1 (intervention in solicitor’s practice) is amended as follows.
      (2)
In paragraph 1 (grounds for intervention)—
(a)
in sub-paragraph (1)(a)—
(i)
for “Council have” substitute “Society has”,
(ii)
after “solicitor’s practice” insert “or former practice”, and
30
(iii)
after “trustee” insert “or that employee is or was a trustee in
his capacity as such an employee”,
(b)
after that sub-paragraph insert—
“(aa)
the Society has reason to suspect dishonesty on the
part of a solicitor (“S”) in connection with—
35
(i)
the business of any person of whom S is or
was an employee, or of any body of which
S is or was a manager, or
(ii)
any business which is or was carried on by
S as a sole trader;”,
40
(c)
in sub-paragraph (1)(b)—
(i)
for “Council consider” substitute “Society considers”, and
(ii)
for “controlled trust” substitute “trust”,
(d)
in sub-paragraph (1)(c) for “Council are” substitute “Society is”,
(e)
in sub-paragraph (1)(ee)—
45
(i)
for “Council are” substitute “Society is”, and

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 1 — The Solicitors Act 1974 (c. 47)
266

(ii)
after “illness” insert “, injury”,
(f)
in sub-paragraph (1)(h)—
(i)
for “Council are” substitute “Society is”, and
(ii)
omit “sole”,
(g)
in sub-paragraph (1)(i) and (k) for “Council are” substitute “Society
5
is”,
(h)
in sub-paragraph (1)(l)—
(i)
for “Council are” substitute “Society is”,
(ii)
in sub-paragraph (iii) for “an officer” substitute “a manager”,
and
10
(iii)
in that sub-paragraph for “Council of the Law Society”
substitute “Society”,
(i)
after sub-paragraph (1)(l) insert—
“(m)
the Society is satisfied that it is necessary to exercise
the powers conferred by Part 2 of this Schedule (or
15
any of them) in relation to a solicitor to protect—
(i)
the interests of clients (or former or
potential clients) of the solicitor or his firm,
or
(ii)
the interests of the beneficiaries of any trust
20
of which the solicitor is or was a trustee.”,
(j)
after sub-paragraph (1) insert—
   “(1A)
In sub-paragraph (1) “manager” has the same meaning as
in the Legal Services Act 2007 (see section 207 of that Act).”,
and
25
(k)
omit sub-paragraph (2).
      (3)
In paragraph 3 (intervention following an undue delay)—
(a)
for “10(3)” substitute “10(9)”,
(b)
for paragraph (a) substitute—
“(a)
the Society is satisfied that there has been undue
30
delay—
(i)
on the part of a solicitor in connection with
any matter in which the solicitor or his firm
is or was acting on behalf of a client or with
any trust, or
35
(ii)
on the part of an employee of a solicitor in
connection with any trust of which the
employee is or was a trustee in his capacity
as such an employee; and”,
(c)
in paragraph (c) for “Council regard” substitute “Society regards”.
40
      (4)
In paragraph 4(2) (continuation of powers after death etc of solicitor)—
(a)
after “6(2) and (3)” insert “, 6A”,
(b)
for “and (5)” substitute “, (5) and (6)”, and
(c)
for “10(1)” substitute “10(2) and (7)”.
      (5)
In paragraph 6 (vesting of sums in Society)—
45
(a)
in sub-paragraph (1)—
(i)
for “Council pass” substitute “Society passes”,
(ii)
for “Council’s” substitute “Society’s”, and

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 1 — The Solicitors Act 1974 (c. 47)
267

(iii)
after “thereto” insert “and to rules under paragraph 6B”,
(b)
in sub-paragraph (2)(a) for “his practice” to the end substitute—
“(i)
his practice or former practice,
(ii)
any trust of which he is or formerly was a
trustee, or
5
(iii)
any trust of which a person who is or was
an employee of the solicitor is or was a
trustee in the person’s capacity as such an
employee;”, and
(c)
in sub-paragraph (2)(c) for “to which the complaint relates”
10
substitute “in connection with which the Society is satisfied there has
been undue delay as mentioned in sub-paragraph (a) of that
paragraph”.
      (6)
After paragraph 6 insert—
“6A   (1)
Without prejudice to paragraph 5, if the Society passes a
15
resolution to the effect that any rights to which this paragraph
applies shall vest in the Society, those rights shall vest accordingly.
      (2)
This paragraph applies to any right to recover or receive debts due
to the solicitor or his firm in connection with his practice or former
practice.
20
      (3)
Any sums recovered by the Society by virtue of the exercise of
rights vested under sub-paragraph (1) shall vest in the Society and
shall be held by it on trust to exercise in relation to them the
powers conferred by this Part of this Schedule and, subject to those
powers and to rules under paragraph 6B, upon trust for the
25
persons beneficially entitled to them.
      (4)
The Society shall serve on the solicitor or his firm, and any person
who owes a debt to which the order applies, a certified copy of the
Society’s resolution.
6B    (1)
The Society may make rules governing its treatment of sums
30
vested in it under paragraph 6 or 6A(3).
      (2)
The rules may in particular make provision in respect of cases
where the Society, having taken such steps to do so as are
reasonable in all the circumstances of the case, is unable to trace
the person or persons beneficially entitled to any sum vested in the
35
Society under paragraph 6 or 6A(3) (including provision which
requires amounts to be paid into or out of compensation funds
(within the meaning of section 36A)).”
      (7)
In paragraph 7(1) (holding of sums vested in Society)—
(a)
after “paragraph 6” insert “or 6A(3)”, and
40
(b)
after “thereto” insert “and to rules under paragraph 6B”.
      (8)
In paragraph 8 (information as to money held) for “holds money” to the end
substitute—
“(a)
holds money on behalf of the solicitor or his firm, or
(b)
has information which is relevant to identifying any
45
money held by or on behalf of the solicitor or his firm,

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 1 — The Solicitors Act 1974 (c. 47)
268


the court may require that person to give the Society information
as to any such money and the accounts in which it is held.”
      (9)
In paragraph 9 (documents)—
(a)
in sub-paragraph (1)(a)—
(i)
after “possession” insert “or under the control”, and
5
(ii)
for “or with any controlled trust” substitute “or former
practice or with any trust of which the solicitor is or was a
trustee”,
(b)
in sub-paragraph (1)(b)—
(i)
after “possession” insert “or under the control”, and
10
(ii)
for “to which the complaint relates” substitute “of which the
Society is satisfied”,
(c)
in sub-paragraph (3) after “possession” insert “or control”,
(d)
in sub-paragraph (5) after “the possession” insert “or under the
control”,
15
(e)
after sub-paragraph (5) insert—
   “(5A)
In the case of a document which consists of information
which is stored in electronic form, a requirement imposed
by a notice under sub-paragraph (1) or an order under sub-
paragraph (4) or (5), is a requirement to produce or deliver
20
the information in a form in which it is legible or from
which it can readily be produced in a legible form.”,
(f)
in sub-paragraph (6) after “possession of” insert “(a)”,
(g)
at the end of that sub-paragraph insert—
“(b)
any property—
25
(i)
in the possession of or under the control of
the solicitor or his firm, or
(ii)
in the case of an order under sub-paragraph
(5), which was in the possession or under
the control of such a person and has come
30
into the possession or under the control of
the person in respect of whom the order is
made,

which the Society reasonably requires for the
purpose of accessing information contained in such
35
documents,

and to use property obtained under paragraph (b) for that
purpose.”,
(h)
in sub-paragraph (7) after “documents” insert “or other property”,
(i)
in sub-paragraph (8) after “documents” insert “or other property”,
40
and
(j)
in sub-paragraph (10) after “documents” insert “or other property”.
     (10)
For paragraph 10 (mail) substitute—
“Mail and other forms of communication
10    (1)
The High Court, on the application of the Society, may from time
45
to time make a communications redirection order.

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 1 — The Solicitors Act 1974 (c. 47)
269

      (2)
A communications redirection order is an order that specified
communications to the solicitor or his firm are to be directed, in
accordance with the order, to the Society or any person appointed
by the Society.
      (3)
For the purposes of this paragraph—
5
(a)
“specified communications” means communications of
such description as are specified in the order;
(b)
the descriptions of communications which may be so
specified include—
(i)
communications in the form of a postal packet;
10
(ii)
electronic communications;
(iii)
communications by telephone.
      (4)
A communications redirection order has effect for such time not
exceeding 18 months as is specified in the order.
      (5)
Where a communications redirection order has effect, the Society
15
or the person appointed by the Society may take possession or
receipt of the communications redirected in accordance with the
order.
      (6)
Where a communications redirection order is made, the Society
must pay to—
20
(a)
in the case of an order relating to postal packets, the postal
operator concerned, and
(b)
in any other case, the person specified in the order,

the like charges (if any) as would have been payable for the
redirection of the communications to which the order relates if the
25
addressee had permanently ceased to occupy or use the premises
or other destination of the communications and had applied to the
postal operator or the specified person (as the case may be) to
redirect the communications to him as mentioned in the order.
      (7)
The High Court may, on the application of the Society, authorise
30
the Society, or a person appointed by it, to take such steps as may
be specified in the order in relation to any website purporting to
be or have been maintained by or on behalf of the solicitor or his
firm if the High Court is satisfied that the taking of those steps is
necessary to protect the public interest or the interests of clients (or
35
potential or former clients) of the solicitor or his firm.
      (8)
In this paragraph—
“postal operator” has the meaning given by section 125(1) of
the Postal Services Act 2000;
“postal packet” has the meaning given by section 125(1) of the
40
Postal Services Act 2000.
      (9)
This paragraph does not apply where the powers conferred by this
Part of this Schedule are exercisable by virtue of paragraph 3.”
     (11)
In paragraph 11(1) (trusts) for “controlled trust” substitute “trust”.
     (12)
In paragraph 12 (liens) for “and documents” substitute “, documents and
45
other property”.

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 2 — The Administration of Justice Act 1985 (c. 61)
270

     (13)
After paragraph 13 (costs) insert—
“13A  (1)
The High Court, on the application of the Society, may order a
former partner of the solicitor to pay a specified proportion of the
costs mentioned in paragraph 13.
      (2)
The High Court may make an order under this paragraph only if
5
it is satisfied that the conduct (or any part of the conduct) by
reason of which the powers conferred by this Part were exercisable
in relation to the solicitor was conduct carried on with the consent
or connivance of, or was attributable to any neglect on the part of,
the former partner.
10
      (3)
In this paragraph “specified” means specified in the order made
by the High Court.”
78
Omit Schedule 1A (inadequate professional services).
79
Omit Schedule 2 (the compensation fund).
Part 2
15
The Administration of Justice Act 1985 (c. 61)
80
The Administration of Justice Act 1985 is amended in accordance with this
Part of this Schedule.
81    (1)
Section 9 (incorporated practices) is amended as follows.
      (2)
In subsection (1)—
20
(a)
for “Council” (in both places) substitute “Society”,
(b)
in paragraph (a) for “by solicitors” to the end substitute “of legal
services bodies;”,
(c)
in paragraph (b) for “any such services” substitute “any solicitor
services or other relevant legal services”, and
25
(d)
in paragraph (c)—
(i)
for “conditions” substitute “requirements”, and
(ii)
omit “corporate”.
      (3)
In subsection (2)—
(a)
for “Council” (in both places) substitute “Society”,
30
(b)
in paragraph (a) for “are to be” to the end substitute “, or for the
renewal of such recognition, are to be made, and requiring such
applications to be accompanied by a fee of such amount as the
Society may from time to time determine;”,
(c)
after that paragraph insert—
35
“(aa)
for the manner and form in which other applications
under the rules are to be made, and requiring such
applications to be accompanied by a fee of such
amount as the Society may from time to time
determine;”,
40
(d)
for paragraphs (c) to (e) substitute—
“(c)
about the time when any recognition, or renewal of
recognition, takes effect and the period for which it is
(subject to the provisions made by or under this Part)
to remain in force;
45