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Legal Services Bill [HL]


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)

285

 

virtue of this Act or any rules applicable to the

relevant person by virtue of section 9 of this Act;

(c)   

a complaint that the relevant person has acted in

contravention of section 41 of the 1974 Act or

paragraph 9(2) of this Schedule or of any

5

conditions subject to which a permission has been

granted under that section or for the purposes of

paragraph 9(2) of this Schedule;

(d)   

a complaint that the relevant person has knowingly

acted in contravention of an order under section

10

43(2) of the 1974 Act or of any conditions subject to

which a permission has been granted under such

an order.”

105        

In paragraph 17 of that Schedule (procedure on applications and

complaints)—

15

(a)   

for “(7)” substitute “(9)”,

(b)   

in paragraph (a)—

(i)   

omit “11(1), 15(2) or”,

(ii)   

omit “13(3) or”, and

(iii)   

after “16(1)” insert “or (1A)”, and

20

(c)   

in paragraph (c) after “body” insert “or, in the case of a complaint as

is mentioned in paragraph 16(1A), to a manager or employee of such

a body”.

106        

In paragraph 18 of that Schedule (powers of Tribunal with respect to

recognised bodies)—

25

(a)   

in sub-paragraph (1) after “this Schedule” insert “(other than

paragraph 16(1A)”,

(b)   

in paragraph (b) of that sub-paragraph for “section 34 of the 1974

Act” substitute “any requirement imposed by or by virtue of this

Act”,

30

(c)   

omit paragraph (d) of that sub-paragraph and the “or” immediately

preceding it,

(d)   

in sub-paragraph (2) omit “not exceeding £3,000”, and

(e)   

omit sub-paragraphs (3) and (4).

107        

After that paragraph insert—

35

“18A  (1)  

Where, on the hearing of any complaint made to it under

paragraph 16(1A) of this Schedule, the Tribunal is satisfied that a

manager or employee of a recognised body—

(a)   

has been convicted as mentioned in paragraph (a) of

paragraph 16(1A),

40

(b)   

has failed to comply with any requirement imposed by or

by virtue of this Act or any rules applicable to the relevant

person by virtue of section 9 of this Act, or

(c)   

has acted as mentioned in paragraph (c) or (d) of

paragraph 16(1A),

45

           

the Tribunal may, if it thinks fit, make one or more of the orders

referred to in sub-paragraph (2).

      (2)  

Those orders are—

 

 

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)

286

 

(a)   

an order directing the payment by the relevant person of a

penalty to be forfeited to Her Majesty;

(b)   

an order requiring the Society to consider taking such steps

as the Tribunal may specify in relation to the relevant

person;

5

(c)   

if the person is not a solicitor, an order which states one or

more of the matters mentioned in sub-paragraph (3);

(d)   

an order requiring the Society to refer to an appropriate

regulator any matter relating to the conduct of the relevant

person.

10

      (3)  

The matters referred to in sub-paragraph (2)(c) are—

(a)   

that as from the specified date—

(i)   

no solicitor or employee of a solicitor shall employ

or remunerate, in connection with the practice

carried on by that solicitor, the person with respect

15

to whom the order is made, and

(ii)   

no recognised body, or manager or employee of

such a body, shall employ or remunerate that

person, in connection with the business of the

recognised body,

20

   

except in accordance with a Society permission;

(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

25

the body;

(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

30

in the body.

      (4)  

For this purpose a person has an interest in a body if the person

has an interest in the body within the meaning of Part 5 the Legal

Services Act 2007 (see sections 72 and 109 of that Act).

      (5)  

Subsections (1) to (1C), (3) and (4) of section 44 of the 1974 Act

35

(offences in connection with orders under section 43(2) of that Act)

apply in relation to an order under sub-paragraph (2)(c) as they

apply in relation to an order under section 43(2) of that Act, except

that references in those subsections to provision within section

43(2)(a), (b) or (c) of that Act are to be read as references to

40

provision within sub-paragraph (3)(a), (b) or (c).

      (6)  

Section 44(2) of the 1974 Act, paragraph 16(1)(d) and (1A)(d) of

this Schedule and paragraph 15(3A) of Schedule 14 to the Courts

and Legal Services Act 1990 apply in relation to an order under

sub-paragraph (2)(c) as they apply in relation to an order under

45

section 43(2) of the 1974 Act.

      (7)  

For the purposes of sub-paragraph (2)(d) an “appropriate

regulator” in relation to the relevant person means—

(a)   

if the person is an authorised person in relation to a

reserved legal activity for the purposes of the Legal

50

 

 

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)

287

 

Services Act 2007, any relevant approved regulator (within

the meaning of that Act) in relation to that person, and

(b)   

if the person carries on activities which are not reserved

legal activities, any body which regulates the carrying on

of such activities by the person.”

5

108        

In paragraph 20 of that Schedule (powers of Tribunal in respect of legal aid

complaints), in sub-paragraph (1)—

(a)   

for “an officer” substitute “a manager”,

(b)   

for “director” substitute “manager”, and

(c)   

for “legal aid work” substitute “providing representation funded by

10

the Legal Services Commission as part of the Criminal Defence

Service”,

           

and omit sub-paragraph (2).

109        

In paragraph 21 of that Schedule (revocation of recognition by reason of

default by director)—

15

(a)   

in sub-paragraph (1), in paragraph (a) for “director” substitute

“manager”,

(b)   

in paragraph (b) of that sub-paragraph for “director” (in both places)

substitute “manager”,

(c)   

in paragraph (c) of that sub-paragraph for “director” (in both places)

20

substitute “manager”,

(d)   

in sub-paragraph (3) for “director” (in both places) substitute

“manager”, and

(e)   

after that sub-paragraph insert—

    “(4)  

The reference in paragraph (c) of sub-paragraph (1) to a

25

person employed by a recognised body includes a

reference to a person who was so employed at the time of

the conduct leading to the making of the order referred to

in that paragraph.”

110        

In paragraph 23 (orders as to remuneration for non-contentious business)—

30

(a)   

the existing provision becomes sub-paragraph (1) of that paragraph,

(b)   

in that sub-paragraph for “regulating (in accordance with paragraph

22)” substitute “prescribing (by virtue of paragraph 22) general

principles to be applied when determining”,

(c)   

in that sub-paragraph for paragraph (b) substitute—

35

“(b)   

in paragraph (d), the reference to the solicitor or

any employee of the solicitor who is an authorised

person were a reference to any manager or

employee of the recognised body who is an

authorised person.”, and

40

(d)   

after that sub-paragraph insert—

    “(2)  

In this paragraph “authorised person” means a person

who is an authorised person in relation to an activity

which is a reserved legal activity, within the meaning of

the Legal Services Act 2007 (see section 18 of that Act).”

45

111        

For paragraph 24 of that Schedule (effect of contentious business

 

 

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)

288

 

agreements) substitute—

“24   (1)  

This paragraph applies in relation to a contentious business

agreement made between a recognised body and a client.

      (2)  

A provision in the agreement that the body shall not be liable for

the negligence of any of its managers or employees shall be void if

5

the client is a natural person who, in entering that agreement, is

acting for purposes which are outside his trade, business or

profession.

      (3)  

A provision in the agreement that the body shall be relieved from

any responsibility to which it would otherwise be subject in the

10

course of carrying on its business as a recognised body shall be

void.

      (4)  

A provision in the agreement that any manager of the body shall

be relieved from any responsibility to which the manager would

otherwise be subject in the course of the carrying on by the body

15

of its business as a recognised body shall be void.”

112        

In paragraph 25 of that Schedule (effect of supervening incapacity on

contentious business agreements)—

(a)   

for sub-paragraph (1)(b) substitute—

“(b)   

a relevant insolvency event occurs in relation to the

20

body;”,

(b)   

in sub-paragraphs (2) and (3)—

(i)   

for “taxation” (in each place) substitute “assessment”, and

(ii)   

for “taxing officer” (in each place) substitute “costs officer”,

(c)   

in sub-paragraph (3) for “any officer” substitute “any manager”, and

25

(d)   

after that sub-paragraph insert—

    “(4)  

For the purposes of this paragraph a relevant insolvency

event occurs in relation to a recognised body if—

(a)   

a resolution for a voluntary winding-up of the

body is passed without a declaration of solvency

30

under section 89 of the Insolvency Act 1986;

(b)   

the body enters administration within the meaning

of paragraph 1(2)(b) of Schedule B1 to that Act;

(c)   

an administrative receiver within the meaning of

section 251 of that Act is appointed;

35

(d)   

a meeting of creditors is held in relation to the body

under section 95 of that Act (creditors’ meeting

which has the effect of converting a members’

voluntary winding up into a creditors’ voluntary

winding up);

40

(e)   

an order for the winding up of the body is made.”

113        

In paragraph 26 of that Schedule (taxations with respect to contentious

business)—

(a)   

in the paragraph heading for “Taxations” substitute “Assessments”,

(b)   

the existing paragraph becomes sub-paragraph (1) and in that sub-

45

paragraph —

(i)   

for “taxation” substitute “assessment”,

(ii)   

for “taxing officer” substitute “costs officer”,

 

 

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)

289

 

(iii)   

after “the body” (in the second place) insert “or any manager

or employee of the body”, and

(iv)   

for “any solicitor, being an officer” substitute “any authorised

person, being a manager”, and

(c)   

after that sub-paragraph insert—

5

    “(2)  

In this paragraph “authorised person” means an

authorised person, in relation to an activity which is a

reserved legal activity, within the meaning of the Legal

Services Act 2007.”

114        

In paragraph 28 (power of court to order recognised body to pay over

10

clients’ money) after “client” (in the third place) insert “or any manager or

employee of such a body”.

115        

For paragraph 29 of that Schedule (actions to recover costs) substitute—

“29   (1)  

Subsection (2A) of section 69 of the 1974 Act shall have effect in

relation to a bill of costs delivered by a recognised body as if for

15

paragraphs (a) and (b) there were substituted—

“(a)   

signed on behalf of the recognised body by any manager or

employee of the body authorised by it to do so, or

(b)   

enclosed in, or accompanied by, a letter which is so signed

and refers to the bill.”

20

      (2)  

Subsection (2E) of that section shall have effect in relation to such

a bill as if for “the solicitor” there were substituted “the recognised

body”.”

116        

In paragraph 30 (power of Society to inspect files relating to certain

proceedings), for paragraph (b) substitute—

25

“(b)   

for the appointment of an administrative receiver within

the meaning of section 251 of the Insolvency Act 1986; or”.

117        

In paragraph 31 of that Schedule (bank accounts)—

(a)   

omit “or (2)”, and

(b)   

after “bank” insert “or building society”.

30

118        

After that paragraph insert—

“31A       

Where rules made under section 32(1) of the 1974 Act are applied

to managers or employees in accordance with section 9(2)(fb) of

this Act, section 85 of the 1974 Act shall apply in relation to a

manager or employee to whom the rules are applied who keeps an

35

account with a bank or building society in pursuance of any such

rules as it applies in relation to a solicitor who keeps such an

account in pursuance of rules under section 32.”

119   (1)  

Paragraph 32 of that Schedule (intervention by Society) is amended as

follows.

40

      (2)  

In sub-paragraph (1)(a)—

(a)   

for “Council are” substitute “Society is”,

(b)   

after “recognised body” insert “or a manager of such a body”, and

(c)   

for “it” substitute “the body or manager”.

      (3)  

Omit sub-paragraph (1)(b).

45

 

 

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)

290

 

      (4)  

For sub-paragraph (1)(c) substitute—

“(c)   

a relevant insolvency event occurs in relation to a

recognised body; or”.

      (5)  

In sub-paragraph (1)(d)—

(a)   

for “Council have” substitute “Society has”,

5

(b)   

for “officer” substitute “manager”, and

(c)   

for “that body’s” to the end substitute—

“(i)   

that body’s business,

(ii)   

any trust of which that body is or was a

trustee,

10

(iii)   

any trust of which the manager or

employee is or was a trustee in his capacity

as such a manager or employee, or

(iv)   

the business of another body in which the

manager or employee is or was a manager

15

or employee or the practice (or former

practice) of the manager or employee; or”.

      (6)  

After sub-paragraph (1)(d) insert—

“(e)   

the Society is satisfied that it is necessary to exercise the

powers conferred by Part 2 of Schedule 1 to the 1974 Act

20

(or any of them) in relation to a recognised body to

protect—

(i)   

the interests of clients (or former or potential

clients) of the recognised body,

(ii)   

the interests of the beneficiaries of any trust of

25

which the recognised body is or was a trustee, or

(iii)   

the interests of the beneficiaries of any trust of

which a person who is or was a manager or

employee of the recognised body is or was a trustee

in that person’s capacity as such a manager or

30

employee;”.

      (7)  

After sub-paragraph (1) insert—

   “(1A)  

For the purposes of this paragraph a relevant insolvency event

occurs in relation to a recognised body if—

(a)   

a resolution for a voluntary winding-up of the body is

35

passed without a declaration of solvency under section 89

of the Insolvency Act 1986;

(b)   

the body enters administration within the meaning of

paragraph 1(2)(b) of Schedule B1 to that Act;

(c)   

an administrative receiver within the meaning of section

40

251 of that Act is appointed;

(d)   

a meeting of creditors is held in relation to the body under

section 95 of that Act (creditors’ meeting which has the

effect of converting a members’ voluntary winding up into

a creditors’ voluntary winding up);

45

(e)   

an order for the winding up of the body is made.”

      (8)  

Omit sub-paragraph (2).

120        

For paragraph 33 of that Schedule (further grounds for intervention)—

 

 

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)

291

 

(a)   

for paragraph (a) substitute—

“(a)   

the Society is satisfied that there has been undue

delay—

(i)   

on the part of a recognised body in

connection with any matter in which it is or

5

was acting on behalf of a client or with any

trust of which it is or was a trustee, or

(ii)   

on the part of a person who is or was a

manager or employee of a recognised body

in connection with any trust of which the

10

manager or employee is or was a trustee in

his capacity as such a manager or

employee;”, and

(b)   

in paragraph (c) for “Council regard” substitute “Society regards”.

121        

In paragraph 34 of that Schedule (powers of intervention on revocation of

15

recognition etc), in sub-paragraph (1) omit “corporate” (in both places).

122        

In paragraph 35 of that Schedule (provision relating to the application of

Part 2 of Schedule 1 to the Solicitors Act 1974)—

(a)   

in paragraph (a) omit “corporate”, and

(b)   

omit “and” at the end of paragraph (b) and after paragraph (c)

20

insert—

“(d)   

paragraph 6(2)(a) of that Schedule is to be

construed as including a reference to sums of

money held by or on behalf of the recognised body

in connection with any trust of which a person who

25

is or was a manager of the recognised body is or

was a trustee in his capacity as such a manager;

(e)   

paragraph 9 of that Schedule is to be construed—

(i)   

as if sub-paragraph (1) included a reference

to documents in the possession or under the

30

control of the recognised body in

connection with any trust of which a person

who is or was a manager or employee of the

recognised body is or was a trustee in his

capacity as such a manager or employee,

35

and

(ii)   

as applying to such a manager or employee

and documents and property in his

possession or under his control in

connection with such a trust as it applies to

40

a solicitor and documents and property in

the possession or under the control of the

solicitor;

(f)   

paragraph 11(1) of that Schedule is to be construed

as including a power for the Society to apply to the

45

High Court for an order for the appointment of a

new trustee to a trust in substitution for a person

who is a trustee, in his capacity as a manager or

employee of the recognised body; and

(g)   

paragraph 13A of that Schedule is to be read as if

50

the references to a former partner were

references—

 

 

 
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