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]
Part 4 — Regulation of approved regulators
39

(5)
An affected person in relation to the Board may make an application under
subsection (6) if the person considers that the regulatory arrangements of an
approved regulator do not make appropriate provision to prevent a conflict
between—
(a)
a requirement of those regulatory arrangements, and
5
(b)
a requirement of the regulatory arrangements of the Board (in its
capacity as an approved regulator).
(6)
The application is an application to the Board for it to exercise its powers under
section 32 to direct the approved regulator—
(a)
to take steps to modify, in such manner as may be specified in the
10
direction, the provision made by its regulatory arrangements to
prevent a regulatory conflict with the Board (in its capacity as an
approved regulator), or
(b)
if its regulatory arrangements do not make any such provision, to make
such provision as may be specified in the direction to prevent such a
15
conflict.
(7)
An affected person in relation to an approved regulator (other than the Board)
may make a request under subsection (8) if the person considers that the
regulatory arrangements of the approved regulator do not make appropriate
provision to prevent a conflict between—
20
(a)
a requirement of those regulatory arrangements, and
(b)
a requirement of the regulatory arrangements of the Board (in its
capacity as an approved regulator).
(8)
The request is a request to the approved regulator that it reconsider the
provision made by its regulatory arrangements to prevent a regulatory conflict
25
with the Board.
(9)
The Board (in its capacity as an approved regulator) and any other approved
regulator must consider any request made to it under this section.
(10)
Subsections (5) to (8) of section 53 apply in relation to an application under
subsection (6) as they apply in relation to an application under that section,
30
except that—
(a)
references to the applicant regulator are to be read as references to the
person who made the application, and
(b)
references to the conflicting regulator are to be construed in accordance
with this section.
35
(11)
In this section—
“affected person” in relation to the Board or any other approved
regulator, means—
(a)
any person authorised by the body to carry on a reserved legal
activity, or
40
(b)
an employee or manager of such a person;
“conflicting regulator” means—
(a)
in a case within subsection (1), the approved regulator making
the request, and
(b)
in a case within subsection (3) or (5), the approved regulator
45
whose regulatory arrangements are considered to conflict with
those of the Board.

Legal Services Bill [HL]
Part 4 — Regulation of approved regulators
40

Functions of approved regulators etc
69
Modification of the functions of approved regulators etc
(1)
The Lord Chancellor may by order modify, or make other provision relating to,
the functions of an approved regulator or any other body (other than the
Board).
5
(2)
The Lord Chancellor may make an order under subsection (1) only if—
(a)
the Board has made a recommendation under this section,
(b)
a draft order was annexed to the recommendation, and
(c)
the order is in the same form as, or a form not materially different from,
that draft order.
10
(3)
The Board may make a recommendation under this section only with a view to
an order being made which enables the body to which it relates to do one or
more of the following—
(a)
to become designated by an order under Part 2 of Schedule 4 as an
approved regulator, or designated by an order under Part 1 of Schedule
15
10 as a licensing authority, in relation to one or more reserved legal
activities;
(b)
to authorise persons or any category of persons (whether corporate or
unincorporate) to carry on one or more activities which are reserved
legal activities in relation to which the body is (at the time the
20
authorisation has effect) designated as an approved regulator, or to
make regulatory arrangements;
(c)
to carry out its role as an approved regulator (including its role, if any,
as a licensing authority) more effectively or efficiently;
(d)
to become a qualifying regulator under Part 1 of Schedule 18;
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(e)
if it is a designated qualifying regulator under section 86A of the
Immigration and Asylum Act 1999 (c. 33), to authorise persons to
provide any additional advice or services the provision of which
amounts to the provision of immigration advice or immigration
services.
30
(4)
Subsections (2) (other than paragraph (a)), (3) and (4) of section 64 apply in
relation to an order under this section as they apply in relation to an order
under section 62(1)(b) in relation to the Board.
(5)
An order under this section also may make provision in relation to—
(a)
the provision of immigration advice or immigration services, and
35
(b)
persons authorised to provide such advice and services by the body to
which the order relates,

corresponding to the provision which may be made by virtue of section 64(2)
to (4) in relation to reserved legal activities and persons authorised to carry on
those activities.
40
(6)
An order under this section may modify provisions made by or under any
enactment (including this Act or any Act passed after this Act), prerogative
instrument or other instrument or document.
(7)
Any provision made by an order under this section may be expressed to be
conditional upon—
45
(a)
the body to which the order relates being designated by an order under
Part 2 of Schedule 4 as an approved regulator, or by an order under Part

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Part 5 — Alternative business structures
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1 of Schedule 10 as a licensing authority, in relation to one or more
reserved legal activities specified in the proposed draft order, or
(b)
the body to which the order relates becoming a designated qualifying
regulator under section 86A of the Immigration and Asylum Act 1999
(c. 33).
5
(8)
The powers to make an order conferred by this section are without prejudice
to any powers (statutory or non-statutory) which an approved regulator or
other body may have apart from this section.
70
Procedural requirements relating to recommendations under section 69
(1)
A recommendation may be made under section 69 only with the consent of the
10
approved regulator or other body to which the recommendation relates.
(2)
Before making a recommendation under that section, the Board must publish
a draft of—
(a)
the proposed recommendation, and
(b)
the proposed draft order.
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(3)
The draft must be accompanied by a notice which states that representations
about the proposals may be made to the Board within a specified period.
(4)
Before making the recommendation, the Board must have regard to any
representations duly made.
(5)
If the draft order to be annexed to the recommendation differs from the draft
20
published under subsection (2)(b) in a way which is, in the opinion of the
Board, material, the Board must, before making the recommendation, publish
the draft order along with a statement detailing the changes made and the
reasons for those changes.
Part 5
25
Alternative business structures
Introductory
71
Carrying on of activities by licensed bodies
(1)
The provisions of this Part have effect for the purpose of regulating the
carrying on of reserved legal activities and other activities by licensed bodies.
30
(2)
In this Act “licensed body” means a body which holds a licence in force under
this Part.
72
“Licensable body”
(1)
A body (“B”) is a licensable body if a non-authorised person—
(a)
is a manager of B, or
35
(b)
has an interest in B.
(2)
A body (“B”) is also a licensable body if—
(a)
another body (“A”) is a manager of B, or has an interest in B, and

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(b)
non-authorised persons are entitled to exercise, or control the exercise
of, at least 10% of the voting rights in A.
(3)
For the purposes of this Act, a person has an interest in a body if—
(a)
the person holds shares in the body, or
(b)
the person is entitled to exercise, or control the exercise of, voting rights
5
in the body.
(4)
A body may be licensable by virtue of both subsection (1) and subsection (2) .
(5)
For the purposes of this Act, a non-authorised person has an indirect interest
in a licensable body if the body is licensable by virtue of subsection (2) and the
non-authorised person is entitled to exercise, or control the exercise of, voting
10
rights in A.
(6)
In this Act “shares” means—
(a)
in relation to a body with a share capital, allotted shares (within the
meaning of the Companies Acts);
(b)
in relation to a body with capital but no share capital, rights to share in
15
the capital of the body;
(c)
in relation to a body without capital, interests—
(i)
conferring any right to share in the profits, or liability to
contribute to the losses, of the body, or
(ii)
giving rise to an obligation to contribute to the debts or
20
expenses of the body in the event of a winding up;

and references to the holding of shares, or to a shareholding, are to be
construed accordingly.
Licensing authorities
73
Licensing authorities and relevant licensing authorities
25
(1)
In this Act “licensing authority” means—
(a)
the Board, or
(b)
an approved regulator which is designated as a licensing authority
under Part 1 of Schedule 10 and whose licensing rules are approved for
the purposes of this Act.
30
(2)
For the purposes of this Act—
(a)
the Board is a licensing authority in relation to all reserved legal
activities, and
(b)
an approved regulator within subsection (1)(b) is a licensing authority
in relation to any reserved legal activity in relation to which the
35
designation is made.
(3)
The Board—
(a)
may delegate any of its functions as a licensing authority to such
persons as it considers appropriate;
(b)
must take such steps as are necessary to ensure an appropriate financial
40
and organisational separation between the activities of the Board that
relate to the carrying out of its functions as a licensing authority and the
other activities of the Board.
(4)
In this Part “relevant licensing authority”—

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(a)
in relation to a licensed body, means the licensing authority by which
the licensed body is authorised to carry on an activity which is a
reserved legal activity;
(b)
in relation to an applicant for a licence, means the licensing authority to
which the application is made.
5
74
Designation of approved regulator as licensing authority
Part 1 of Schedule 10 makes provision for approved regulators to be
designated, by order, as licensing authorities in relation to one or more
reserved legal activities.
75
Automatic cancellation of designation as licensing authority
10
(1)
This section applies where a body is designated—
(a)
as an approved regulator in relation to a reserved legal activity (“the
activity”), and
(b)
as a licensing authority in relation to the activity.
(2)
If the Lord Chancellor makes an order under section 45 cancelling the body’s
15
designation as an approved regulator in relation to the activity, the body’s
designation as a licensing authority in relation to the activity is also cancelled.
(3)
The cancellation takes effect at the same time as cancellation of the body’s
designation as an approved regulator.
76
Cancellation of designation as licensing authority by order
20
(1)
The Lord Chancellor may by order cancel an approved regulator’s designation
as a licensing authority—
(a)
in relation to all the reserved legal activities in relation to which it is
designated, or
(b)
in relation to one or more, but not all, of those reserved legal activities,
25

with effect from a date specified in the order.
(2)
But the Lord Chancellor may only make an order under subsection (1) in
accordance with a recommendation made by the Board under subsection (3) or
(5).
(3)
The Board must recommend that an order is made cancelling an approved
30
regulator’s designation as a licensing authority in relation to one or more
reserved legal activities, if—
(a)
the approved regulator applies to the Board for such a
recommendation to be made,
(b)
the application is made in such form and manner as may be prescribed
35
by rules made by the Board, and is accompanied by the prescribed fee,
and
(c)
the approved regulator publishes a notice giving details of the
application in accordance with such requirements as may be specified
in rules made by the Board.
40
(4)
In this section “the prescribed fee”, in relation to an application, means the fee
specified in or determined in accordance with rules made by the Board, with
the consent of the Lord Chancellor.

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(5)
The Board may recommend that an order is made cancelling an approved
regulator’s designation as a licensing authority in relation to one or more
reserved legal activities if it is satisfied—
(a)
that an act or omission of the licensing authority (or a series of such acts
or omissions) has had, or is likely to have, an adverse impact on the
5
regulatory objectives, and
(b)
that, in all the circumstances of the case, it is appropriate to cancel the
approved regulator’s designation in relation to the activity or activities
in question.
(6)
The Board may not determine that it is appropriate to cancel an approved
10
regulator’s designation as a licensing authority in relation to an activity or
activities unless it is satisfied that the matter cannot be adequately addressed
by the Board exercising the powers available to it under sections 31 to 43.
(7)
Part 2 of Schedule 10 makes further provision about the making of
recommendations under subsection (5).
15
(8)
If the Lord Chancellor decides not to make an order in response to a
recommendation made under subsection (3) or (5), the Lord Chancellor must
give the Board notice of the decision and the reasons for it.
(9)
The Lord Chancellor must publish a notice given under subsection (8).
77
Cancellation of designation: further provision
20
(1)
This section applies where an approved regulator (“the former authority”) has
its designation as a licensing authority in relation to one or more reserved legal
activities cancelled—
(a)
by virtue of section 75, or
(b)
by an order under section 76.
25
(2)
The Lord Chancellor may by order make—
(a)
such modifications of provisions made by or under any enactment
(including this Act or any enactment passed after this Act), prerogative
instrument or other instrument or document, and
(b)
such transitional or consequential provision,
30

as the Lord Chancellor considers necessary or expedient in consequence of the
cancellation.
(3)
The Lord Chancellor may, by order, make transfer arrangements.
(4)
“Transfer arrangements” are arrangements in accordance with which each
consenting licensed body is, from the time the cancellation takes effect, treated
35
as being authorised to carry on each protected activity by virtue of a licence
issued under this Part by a licensing authority, in relation to the protected
activity, which consents to the transfer arrangements.
(5)
“Consenting licensed body” means a licensed body authorised by the former
authority which consents to the transfer arrangements.
40
(6)
The transfer arrangements—
(a)
must make such provision as is necessary to ensure that, where a
licensed body is treated under those arrangements as being authorised
to carry on a protected activity by the new authority, that licensed body
is subject to the licensing rules of the new authority;
45

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(b)
may make provision requiring amounts held by the former authority
which represent amounts paid to it by way of licensing fees by the
consenting licensed bodies (or a part of the amounts so held) to be paid
to the new authority and treated as if they were amounts paid by those
licensed bodies by way of licensing fees to the new authority.
5
(7)
Subsection (6)(a) is subject to any transitional provision which may be made by
the transfer arrangements, including provision modifying the licensing rules of
the new authority as they apply to the bodies to whom the transfer
arrangements apply.
(8)
The Lord Chancellor may make an order under this section only if—
10
(a)
the Board has made a recommendation in accordance with section 78,
and
(b)
the order is in the same form as, or in a form which is not materially
different from, the draft order annexed to that recommendation.
(9)
For the purposes of this section—
15
(a)
a licensed body is “authorised by the former authority” if immediately
before the time the cancellation takes effect the body is, by virtue of a
licence under this Part, authorised by the former authority to carry on
an activity which is a reserved legal activity to which the cancellation
relates, and
20
(b)
in relation to that body—
(i)
the activity which the body is authorised to carry on as
mentioned in paragraph (a) is a “protected activity”, and
(ii)
“the new authority” means the licensing authority by which (in
accordance with transfer arrangements under subsection (4))
25
the body is treated as authorised to carry on a protected activity.
(10)
In this section “licensing fee”, in relation to a licensing authority, means a fee
payable by a licensed body under the authority’s licensing rules made in
accordance with paragraph 21 of Schedule 11.
78
The Board’s power to recommend orders made under section 77
30
(1)
The Board may recommend to the Lord Chancellor that the Lord Chancellor
make an order under section 77 in the form of a draft order prepared by the
Board and annexed to the recommendation.
(2)
Before making a recommendation under this section, the Board must publish a
draft of—
35
(a)
the proposed recommendation, and
(b)
the proposed draft order.
(3)
The draft must be accompanied by a notice which states that representations
about the proposals may be made to the Board within a specified period.
(4)
Before making the recommendation, the Board must have regard to any
40
representations duly made.
(5)
If the draft order to be annexed to the recommendation differs from the draft
published under subsection (2)(b) in a way which is, in the opinion of the
Board, material, the Board must, before making the recommendation, publish
the draft order along with a statement detailing the changes made and the
45
reasons for those changes.