House of Commons Public Bill Committee Proceedings

House of Commons

Session 2006 - 07
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Other Bills before Parliament

Report Stage Proceedings: 15th October 2007
567

Legal Services Bill [Lords], continued

“9A
Legal services bodies

(1)
For the purposes of section 9, a “legal services body” means a body

(corporate or unincorporate) in respect of which —

(a)
the management and control condition, and

(b)
the relevant lawyer condition,


are satisfied.

(2)
The management and control condition is satisfied if—

(a)
at least 75% of the body’s managers are legally qualified,

(b)
the proportion of shares in the body held by persons who are

legally qualified is at least 75%,

(c)
the proportion of voting rights in the body which persons who

are legally qualified are entitled to exercise, or control the

exercise of, is at least 75%,

(d)
all the persons with an interest in the body who are not legally

qualified are managers of the body, and

(e)
all the managers of the body who are not legally qualified are

individuals approved by the Society as suitable to be

managers of a recognised body.

(3)
The Society may by rules under section 9 provide that, in relation to

specified kinds of bodies, subsection (2) applies as if the references to

75% were to such greater percentage as may be specified (and

different percentages may be specified for different kinds of bodies).

(4)
The relevant lawyer condition is satisfied in relation to a body if at

least one manager of the body is—

(a)
a solicitor,

(b)
a registered European lawyer, or

(c)
a qualifying body.

(5)
For that purpose a qualifying body is a body in respect of which—

(a)
the management and control condition would be satisfied if

the references in subsection (2) to persons who are legally

qualified were to persons who are legally qualified by virtue

of subsection (6)(a) to (c),

(b)
the relevant lawyer condition is satisfied by virtue of

subsection (4)(a) or (b), and

(c)
the services condition is satisfied.

(6)
For the purposes of this section the following are legally qualified—

(a)
an authorised person who is an individual;

(b)
a registered foreign lawyer (within the meaning of section 89

of the Courts and Legal Services Act 1990 (c. 41));

(c)
a person entitled to pursue professional activities under a

professional title to which the Directive applies in a state to

which the Directive applies (other than the title of barrister or

solicitor in England and Wales);

(d)
an authorised person which is a body in respect of which—

(i)
the services condition is satisfied, and

(ii)
the management and control condition would be

satisfied if the references in subsection (2) to persons

Report Stage Proceedings: 15th October 2007
568

Legal Services Bill [Lords], continued

who are legally qualified were to persons who are

legally qualified by virtue of paragraphs (a) to (c);

(e)
a body which provides professional services such as are

provided by individuals who are authorised persons or

lawyers of other jurisdictions, and in respect of which the

management and control condition would be satisfied if the

references in subsection (2) to persons who are legally

qualified were to persons who are legally qualified by virtue

of paragraphs (a) to (c).

(7)
For the purposes of this section, the services condition is satisfied in

relation to a body if the body provides only services which may be

provided by a recognised body (having regard to rules under section

9(1A) and (1C)).

(8)
For the purposes of this section—

“authorised person” has the same meaning as in section 9;

“the Directive” means Directive 98/5/EC of the European Parliament and

the Council, to facilitate practice of the profession of lawyer on a

permanent basis in a Member State other than that in which the

qualification was obtained;

“manager”, in relation to a body, has the meaning given by section 9;

“recognised body” has the same meaning as in section 9;

“registered European lawyer” has the same meaning as in section 9;

“shares” has the same meaning as for the purposes of Part 5 of the Legal

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

“specified” means specified in rules made by the Society;


and a person has an interest in a body if the person has an interest in

the body for the purposes of section 9.”’.

Mr Secretary Straw

Agreed to  122

Page  277,  line  31  [Schedule  16],  after ‘of’ insert ‘—

(a)
’.

Mr Secretary Straw

Agreed to  123

Page  277,  line  33  [Schedule  16],  after ‘generally’ insert ‘, or

(b)
that client, person or trust separately’.

Mr Secretary Straw

Agreed to  124

Page  277,  line  44  [Schedule  16],  after first ‘of’ insert ‘—

(a)
’.

Mr Secretary Straw

Agreed to  125

Page  277,  line  45  [Schedule  16],  after ‘generally’ insert ‘, or

Report Stage Proceedings: 15th October 2007
569

Legal Services Bill [Lords], continued

(b)
that client, person or trust, separately’.

Mr Secretary Straw

Agreed to  126

Page  280,  line  38  [Schedule  16],  at end insert ‘, or

( )
a manager of a recognised body who is not legally qualified (within the

meaning of section 9A) continues to be suitable to be a manager of a

recognised body.’.

Mr Secretary Straw

Agreed to  127

Page  289,  line  45  [Schedule  16],  leave out sub-paragraph (3).

Mr Secretary Straw

Agreed to  128

Page  291,  line  16  [Schedule  16],  at end insert ‘, and

( )
in paragraph (a), after “revoked” insert “in accordance with rules

under that section or”.’

Mr Secretary Straw

Agreed to  129

Page  292,  line  13  [Schedule  16],  at end insert ‘and

( )
after that sub-paragraph insert—

  “(4)
This paragraph does not apply to a recognised body which

holds a licence under Part 5 of the Legal Services Act 2007

(alternative business structures).”’.

Mr Secretary Straw

Agreed to  130

Page  292,  line  22  [Schedule  16],  at end insert —

‘( )
in subsection (4), for paragraphs (a) to (d) substitute “to make different

provision with respect to registered foreign lawyers to the provision

made with respect to solicitors.”,’.

Report Stage Proceedings: 15th October 2007
570

Legal Services Bill [Lords], continued

Mr Secretary Straw

Agreed to  131

Page  293,  line  9  [Schedule  16],  at end insert ‘and—

(ii)
for paragraphs (a) and (b) substitute “for members of that

profession to be managers of recognised bodies.”,’.

Mr Secretary Straw

Agreed to  142

Page  355,  line  44  [Schedule  21],  at end insert ‘and,

(b)
in subsection (6), for “counsel or a solicitor” substitute “a person who,

for the purposes of the Legal Services Act 2007, is an authorised

person in relation to an activity which constitutes the exercise of a

right of audience (within the meaning of that Act)”.’.

Mr Secretary Straw

Agreed to  132

Page  371,  line  10  [Schedule  22],  leave out ‘, 32’.

Mr Secretary Straw

Agreed to  133

Page  371,  line  26  [Schedule  22],  leave out ‘(other than a licensable body)’.

Mr Secretary Straw

Agreed to  134

Page  371,  line  30  [Schedule  22],  leave out paragraph (i) and insert—

‘(i)
a person who (having regard to section 15) carries on notarial activities

through an employee or manager of the person who is within

paragraph (h),’.

Mr Secretary Straw

Agreed to  135

Page  371,  line  36  [Schedule  22],  leave out ‘, other than a licensable body’.

Mr Secretary Straw

Agreed to  136

Page  371,  line  40  [Schedule  22],  leave out ‘, other than a licensable body’.

Mr Secretary Straw

Agreed to  137

Page  371,  line  43  [Schedule  22],  leave out paragraph (o) and insert—

‘(o)
a person who (having regard to section 15) carries on an activity which

is a reserved legal activity within paragraph 18(2) of Schedule 5

through an employee or manager of the person who is within

paragraph (n).’.

Report Stage Proceedings: 15th October 2007
571

Legal Services Bill [Lords], continued

Mr Secretary Straw

Agreed to  138

Page  371,  line  45  [Schedule  22],  at end insert—

    ‘()
After the end of the transitional period, any reference in section 9, 9A or 32A

of, or Schedule 2 or 6 to, the Administration of Justice Act 1985 (c. 61) to an

authorised person includes a person who is an exempt person—

(a)
by virtue of paragraph 13 of Schedule 5, in relation to the carrying on

of an activity which is a notarial activity, or

(b)
by virtue of paragraph 18 of that Schedule, in relation to the carrying

on of an activity which is a reserved legal activity within sub-

paragraph (2) of that paragraph.’.

Mr Secretary Straw

Agreed to  139

Page  372,  line  2  [Schedule  22],  at end insert—

‘15A (1)
During the transitional period (within the meaning of paragraph 15), the Law

Society may make rules to which this sub-paragraph applies only with the

concurrence of the Lord Chancellor (as well as the Master of the Rolls).

      (2)
Sub-paragraph (1) applies to —

(a)
rules made under section 9 of the Administration of Justice Act 1985

(c. 61) by virtue of subsections (1A), (1C), (2A), (2B) or (2D) of that

section or section 9A of that Act, and

(b)
any other rules made under section 9 of that Act, in so far as they apply

in relation to bodies which have one or more managers who are not

legally qualified (within the meaning of section 9A of that Act), or

managers or employees of such bodies.

15B(1)
During the relevant period, the legal professional privilege provisions apply to

a body which—

(a)
is recognised under section 9 of the 1985 Act, and

(b)
has one or more managers who are not legally qualified (within the

meaning of section 9A of that Act),


as if the body were a licensed body.

      (2)
Sub-paragraph (1) applies whether or not the legal professional privilege

provisions have been brought into force for other purposes.

      (3)
The relevant period is the period which—

(a)
begins when section 9A of the 1985 Act comes into force, and

(b)
ends when paragraph 7 of Schedule 5 ceases to apply in relation to the

body.

      (4)
The legal professional privilege provisions are—

(a)
paragraph 36(4) of Schedule 2 to the 1985 Act (as inserted by

Schedule 16 to this Act), and

(b)
section 190(3) to (7) of this Act.

      (5)
During the transitional period (within the meaning of paragraph 15), section

190(5)(h) (as it applies by virtue of this paragraph) applies as if for “an

authorised person in relation to an activity which is a reserved legal activity”

there were substituted “within paragraph 15(1) of Schedule 22”.

Report Stage Proceedings: 15th October 2007
572

Legal Services Bill [Lords], continued

      (6)
“The 1985 Act” means the Administration of Justice Act 1985.’.

Mr Secretary Straw

Agreed to  143

Page  377  [Schedule  23],  leave out lines 27 and 28 and insert ‘, “corporate”.’.

Mr Secretary Straw

Agreed to  140

Page  378,  line  25  [Schedule  23],  leave out ‘(1)(b) and’.

Mr Secretary Straw

Agreed to  141

Page  383,  line  16  [Schedule  23],  leave out ‘Schedule 3’ and insert ‘Schedules 3 and

5’.

Nick Herbert

Mr Jonathan Djanogly

Mr Henry Bellingham

Mr Nick Hurd

Not called  45

Page  383  [Schedule  23],  leave out line 21.

Nick Herbert

Mr Jonathan Djanogly

Mr Henry Bellingham

Mr Nick Hurd

Not called  46

Page  385,  line  10  [Schedule  23],  at end insert ‘trade union   | section 207’.

The Bill was read the third time, and passed, with amendments.