Legal Services Bill [HL]

House of Commons

Session 2006 - 07
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Legal Services Bill [HL]

Legal Services Bill [HL]
Schedule 17 — Licensed conveyancing
Part 1 — Administration of Justice Act 1985 (c. 61)
313

      (2)
The Trustee Act 1925 has effect in relation to an appointment of a
new trustee under this paragraph as it has effect in relation to an
appointment under section 41 of that Act.”
     (12)
In paragraph 11 (liens) for “and documents” substitute “, documents and
other property”.
5
     (13)
After paragraph 12 (costs) insert—
“12A  (1)
The High Court, on the application of the Council, may order a
former partner of the licensed conveyancer to pay a specified
proportion of the costs mentioned in paragraph 12.
      (2)
The High Court may make an order under this paragraph only if
10
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 licensed conveyancer was conduct carried on
with the consent or connivance of, or was attributable to any
neglect on the part of, the former partner.
15
      (3)
In this paragraph “specified” means specified in the order made
by the High Court.”
32    (1)
Schedule 6 (bodies recognised under section 32: supplementary provisions)
is amended as follows.
      (2)
In paragraph 1—
20
(a)
omit “corporate” (in both places), and
(b)
in sub-paragraph (2) omit—
(i)
“or complaint” (in both places), and
(ii)
“or (b)”.
      (3)
In paragraph 2 (disciplinary control of recognised bodies) after “24” insert “,
25
24A”.
      (4)
In paragraph 3—
(a)
in sub-paragraph (1), in paragraph (a)(i) omit “by any court in the
United Kingdom”,
(b)
after paragraph (a) of that sub-paragraph insert—
30
“(aa)
it is alleged that a manager or employee of a
recognised body who is not a licensed conveyancer
has failed to comply with any rules applicable to
him by virtue of section 32;
(ab)
it is alleged that a recognised body (while a
35
recognised body) has failed to comply with a
condition subject to which its recognition has
effect.”,
(c)
in that sub-paragraph omit—
(i)
paragraph (b), and
40
(ii)
from “with a view” to the end, and
(d)
after sub-paragraph (1) insert—
   “(1A)
After making such an investigation, the Investigating
Committee may—
(a)
hear and determine the allegation, or
45

Legal Services Bill [HL]
Schedule 17 — Licensed conveyancing
Part 1 — Administration of Justice Act 1985 (c. 61)
314

(b)
refer the allegation to the Discipline and Appeals
Committee for hearing and determination by that
Committee under paragraph 4.
     (1B)
The Council shall make rules as to the cases in which the
Investigating Committee may hear and determine an
5
allegation, and the cases in which they must refer an
allegation to the Discipline and Appeals Committee.”
      (5)
After paragraph 3 insert—
“3A   (1)
Where, on hearing an allegation by virtue of paragraph 3(1A)(a),
the Investigating Committee are satisfied—
10
(a)
in a case within paragraph 3(1)(a), that a recognised body
has failed to comply with any such rules as are mentioned
in sub-paragraph (ii) of that paragraph, or
(b)
in a case within paragraph 3(1)(aa), that a manager or
employee has failed to comply with any such rules as are
15
mentioned in that paragraph, or
(c)
in a case within paragraph 3(1)(ab), that a recognised body
has failed to comply with any condition mentioned in that
paragraph,

the Committee may make an order directing the payment by the
20
recognised body, manager or employee of a penalty to be forfeited
to Her Majesty.
      (2)
In relation to proceedings before the Investigating Committee by
virtue of paragraph 3(1A)(a), the Committee may make such order
as they consider fit as to the payment of costs by—
25
(a)
the Council;
(b)
the recognised body, manager or employee against whom
the proceedings were brought;
(c)
if the person on whose allegation the proceedings were
brought was heard (in person, or through a representative)
30
by the Committee in the course of the proceedings, that
person.
      (3)
In sub-paragraph (2), for the purposes of paragraph (a) or (b) of
that sub-paragraph, the reference to costs includes costs incurred
in connection with a preliminary investigation of the allegation
35
under paragraph 3.
      (4)
The amount of any penalty required to be paid under sub-
paragraph (1) may not exceed such amount as is prescribed by
rules made by the Council for the purposes of this sub-paragraph.
      (5)
Paragraphs 1, 2(1) and (3) and 4 of Schedule 4 have effect in
40
relation to—
(a)
proceedings for the hearing and determination of an
allegation by the Investigating Committee, as they have
effect in relation to proceedings before the Discipline and
Appeals Committee under section 26, and
45
(b)
orders of the Investigating Committee, as they have effect
in relation to orders of the Discipline and Appeals
Committee.

Legal Services Bill [HL]
Schedule 17 — Licensed conveyancing
Part 1 — Administration of Justice Act 1985 (c. 61)
315

      (6)
A person against whom an order is made by the Investigating
Committee by virtue of sub-paragraph (1) may appeal to the
Discipline and Appeals Committee, and on any such appeal the
Discipline and Appeals Committee may make such order as they
think fit.
5
      (7)
If an order is made by the Investigating Committee by virtue of
sub-paragraph (2), a person listed in paragraphs (a) to (c) of that
sub-paragraph may appeal to the Discipline and Appeals
Committee, and on any such appeal the Discipline and Appeals
Committee may make such order as they think fit.
10
      (8)
Where an order is made by the Discipline and Appeals Committee
under sub-paragraph (6) or (7)—
(a)
a party to the appeal, or
(b)
if not within paragraph (a), the Council,

may appeal against the order to the High Court.
15
      (9)
On an appeal under sub-paragraph (8) the High Court may make
such order as it thinks fit.
     (10)
The decision of the High Court on an appeal under sub-paragraph
(8) shall be final.”
      (6)
In paragraph 4—
20
(a)
in sub-paragraph (1) after “allegation” insert “within paragraph
3(1)(a) or (ab)”,
(b)
in that sub-paragraph, after paragraph (b) insert “, or
(c)
has failed to comply with any such
condition as is mentioned in
25
paragraph 3(1)(ab),”,
(c)
in sub-paragraph (2), in paragraph (b), for “£3,000” substitute “such
amount as may be prescribed by rules made by the Council for the
purposes of this sub-paragraph”,
(d)
after paragraph (b) of that sub-paragraph insert—
30
“(ba)
an order reprimanding that body;
(bb)
an order that the recognition of that body under
section 32 is to have effect subject to such conditions
as may be specified in the order;”,
(e)
omit paragraph (c) of that sub-paragraph,
35
(f)
after that sub-paragraph insert—
   “(2A)
Where on the hearing of any allegation within paragraph
3(1)(aa) the Discipline and Appeals Committee are
satisfied that a manager or employee has failed to comply
with any such rules as are mentioned in sub-paragraph (ii)
40
of that paragraph, the Committee may, if they think fit,
make one or more of the orders referred to in sub-
paragraph (2B).
     (2B)
Those orders are—
(a)
an order directing the payment by the manager or
45
employee of a penalty not exceeding such amount
as may be prescribed by rules made by the Council
for the purposes of this sub-paragraph;

Legal Services Bill [HL]
Schedule 17 — Licensed conveyancing
Part 1 — Administration of Justice Act 1985 (c. 61)
316

(b)
an order requiring the Council to consider taking
such steps as the Committee may specify in relation
to the manager or employee;
(c)
an order requiring the Society to refer to an
appropriate regulator any matter relating to the
5
conduct of the manager or employee.
     (2C)
For the purposes of sub-paragraph (2B)(c) an “appropriate
regulator” in relation to a manager or employee means—
(a)
if the person is an authorised person in relation to
a reserved legal activity for the purposes of the
10
Legal 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 person who exercises
15
regulatory functions in relation to the carrying on
of such activities by the person.
     (2D)
In relation to proceedings under this paragraph, the
Committee may make such order as they consider fit as to
the payment of costs by—
20
(a)
the Council;
(b)
the recognised body or manager or employee
against whom the proceedings were brought;
(c)
if the person on whose allegation the proceedings
were brought was heard (in person, or through a
25
representative) by the Committee in the course of
the proceedings, that person.
     (2E)
In sub-paragraph (2D), for the purposes of paragraph (a)
or (b) of that sub-paragraph, the reference to costs includes
costs incurred in connection with a preliminary
30
investigation of the allegation under paragraph 3.”, and
(g)
omit sub-paragraphs (3), (3A) and (4).
      (7)
In paragraph 5—
(a)
in sub-paragraph (1)—
(i)
after “26” insert “or paragraph 4”, and
35
(ii)
for “director” (in each place) substitute “manager”,
(b)
in sub-paragraph (3) for “director” (in both places) substitute
“manager”, and
(c)
after sub-paragraph (3) insert—
    “(4)
In relation to proceedings for the revocation of a
40
recognition under sub-paragraph (1), the Discipline and
Appeals Committee may make such order as they consider
fit as to the payment of costs by—
(a)
the Council;
(b)
the body to whose recognition the proceedings
45
relate.”.
      (8)
In paragraph 6 (appeals against orders of the Committee)—
(a)
in sub-paragraph (1)—

Legal Services Bill [HL]
Schedule 17 — Licensed conveyancing
Part 1 — Administration of Justice Act 1985 (c. 61)
317

(i)
for “body corporate” substitute “person”,
(ii)
after “4(1)” insert “or (2A)”, and
(iii)
for “5” substitute “5(1)”, and
(b)
after that sub-paragraph insert—
   “(1A)
Where an order is made by the Committee under
5
paragraph 4(2D) or 5(4) a person listed in that paragraph
may appeal to the High Court, and on any such appeal the
High Court may make such order as it thinks fit.”
      (9)
After paragraph 7 (revocation of recognition on grounds of fraud or error)—
(a)
in sub-paragraph (1) and (2) omit “corporate”, and
10
(b)
after sub-paragraph (2) insert—
    “(3)
In relation to proceedings for the revocation of a
recognition under sub-paragraph (1), the Discipline and
Appeals Committee may make such order as they consider
fit as to the payment of costs by—
15
(a)
the Council;
(b)
the body to whose recognition the proceedings
relate.
      (4)
In relation to proceedings on an application under sub-
paragraph (2), the Discipline and Appeals Committee may
20
make such order as they consider fit as to the payment of
costs by—
(a)
the Council;
(b)
the applicant.”
     (10)
In paragraph 8 (appeal against decision of Council in relation to grant of
25
recognition)—
(a)
in sub-paragraph (1) omit “corporate”,
(b)
in paragraph (b) of that sub-paragraph for “restrictions” substitute
“conditions”,
(c)
after that paragraph insert “, or
30
(c)
decides to give a direction in relation
to that body under section 32(3B), or
(d)
refuses an application by that body
under section 32(3D),”,
(d)
in sub-paragraph (2) for “this paragraph” substitute “sub-paragraph
35
(1)(a) or (b)”,
(e)
in paragraph (a) of that sub-paragraph—
(i)
for “restrictions” (in first place) substitute “conditions”, and
(ii)
for “restrictions falling within subsection (3)(d) of that
section” substitute “conditions”, and
40
(f)
after that sub-paragraph insert—
   “(2A)
On an appeal under sub-paragraph (1)(c), the Discipline
and Appeals Committee may—
(a)
revoke the direction of the Council under section
32(3B),
45
(b)
direct that the body’s recognition is to have effect
subject to such conditions as may be specified by
the Council in the direction, or

Legal Services Bill [HL]
Schedule 17 — Licensed conveyancing
Part 1 — Administration of Justice Act 1985 (c. 61)
318

(c)
affirm the decision of the Council,

and the Committee may make such order as to the
payment of costs by the Council or by that body as they
think fit.
     (2B)
On an appeal under sub-paragraph (1)(d), the Discipline
5
and Appeals Committee may—
(a)
direct the Council to grant the application, or
(b)
affirm the decision of the Council,

and the Committee may make such order as to the
payment of costs by the Council or by that body as they
10
think fit.”
     (11)
In paragraph 9 (rules of procedure etc) in sub-paragraph (1)—
(a)
for “, 2 and 3” substitute “and 2”, and
(b)
for “paragraph 4 or 5” substitute “paragraph 3A, 4 or 5”.
     (12)
In paragraph 10 (intervention by Council)—
15
(a)
in sub-paragraph (1), in paragraph (a) after “recognised body” insert
“or a manager of such a body”,
(b)
after that paragraph insert—
“(aa)
the Council is satisfied that a recognised body has
been carrying on business in breach of any
20
condition subject to which the body’s recognition
under section 32 of this Act has effect; or”,
(c)
for paragraph (c) of that sub-paragraph substitute—
“(c)
a relevant insolvency event occurs in relation to a
recognised body; or”,
25
(d)
in paragraph (d) of that sub-paragraph for “officer” substitute
“manager”,
(e)
in that paragraph for “that body’s” to the end of the paragraph
substitute—
“(i)
that body’s business,
30
(ii)
any trust of which that body is or was a
trustee,
(iii)
any trust of which the manager or
employee is or was a trustee in his capacity
as such a manager or employee, or
35
(iv)
the business of another body in which the
manager or employee is or was a manager
or employee or the practice (or former
practice) of the manager or employee;”,
(f)
after that paragraph insert “or
40
(e)
the Council is satisfied that it is necessary to
exercise the powers conferred by Part 2 of Schedule
5 (or any of them) in relation to a recognised body
to protect—
(i)
the interests of clients (or former or
45
potential clients) of the recognised body,
(ii)
the interests of the beneficiaries of any trust
of which the recognised body is or was a
trustee, or

Legal Services Bill [HL]
Schedule 17 — Licensed conveyancing
Part 1 — Administration of Justice Act 1985 (c. 61)
319

(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 employee,”,
5
(g)
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 passed without a declaration of solvency
10
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;
15
(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);
20
(e)
an order for the winding up of the body is made.”,
and
(h)
omit sub-paragraph (2).
     (13)
For paragraph 11(a) substitute—
“(a)
the Council is satisfied that there has been undue delay on
25
the part of—
(i)
a recognised body in connection with any matter in
which it is or was acting on behalf of a client or with
any trust of which it is or was a trustee, or
(ii)
a person who is or was a manager or employee of a
30
recognised body in connection with any trust of
which he is or was a trustee in his capacity as such
a manager or employee; and”.
     (14)
In paragraph 12(1) omit “corporate” (in both places).
     (15)
In paragraph 13—
35
(a)
in paragraph (a) omit “corporate”, and
(b)
omit “and” at the end of paragraph (b) and after paragraph (c)
insert—
“(d)
paragraph 6(2)(a) of that Schedule is to be
construed as including a reference to sums of
40
money held by or on behalf of the recognised body
in connection with any trust of which a person who
is or was manager or employee of that body is or
was a trustee in his capacity as such a manager or
employee;
45
(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
control of the recognised body in
connection with any trust of which a person
50