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Session 2006 - 07
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General Committee Debates
Legal Services Bill [Lords]

Legal Services Bill [Lords]



The Committee consisted of the following Members:

Chairmen: Frank Cook, † Sir Nicholas Winterton
Bailey, Mr. Adrian (West Bromwich, West) (Lab/Co-op)
Bellingham, Mr. Henry (North-West Norfolk) (Con)
Burrowes, Mr. David (Enfield, Southgate) (Con)
Djanogly, Mr. Jonathan (Huntingdon) (Con)
Ellwood, Mr. Tobias (Bournemouth, East) (Con)
Flello, Mr. Robert (Stoke-on-Trent, South) (Lab)
Foster, Mr. Michael (Worcester) (Lab)
Goodman, Helen (Bishop Auckland) (Lab)
Hemming, John (Birmingham, Yardley) (LD)
Hesford, Stephen (Wirral, West) (Lab)
Hughes, Simon (North Southwark and Bermondsey) (LD)
Jones, Mr. Kevan (North Durham) (Lab)
Kidney, Mr. David (Stafford) (Lab)
McCarthy, Kerry (Bristol, East) (Lab)
Mann, John (Bassetlaw) (Lab)
Neill, Robert (Bromley and Chislehurst) (Con)
Prentice, Bridget (Parliamentary Under-Secretary of State for Justice)
Hannah Weston, John Benger, Committee Clerks
† attended the Committee

Public Bill Committee

Tuesday 26 June 2007

(Afternoon)

(Part II)

[Sir Nicholas Winterton in the Chair]

Legal Services Bill [Lords]

[Continuation from column 432]
8.15 pm
On resuming—
The Chairman: I hope that people feel watered, fed and refreshed for the final straight of this match.

Schedule 16

The Law Society, solicitors, recognised bodies and foreign lawyers
Bridget Prentice: I beg to move amendment No. 44, in schedule 16, page 229, line 17, at end insert—
‘After section 1A insert—
“1B Restriction on practice as sole solicitor
(1) Rules under section 31 (rules as to professional practice etc) must provide that a solicitor may not practise as a sole solicitor unless he has in force—
(a) a practising certificate, and
(b) an endorsement of that certificate by the Society authorising him to practise as a sole solicitor (a “sole solicitor endorsement”).
(2) The rules may provide that, for the purposes of the rules and this Act, a solicitor is not to be regarded as practising as a sole solicitor in such circumstances as may be prescribed by the rules.
(3) The rules must prescribe the circumstances in which a solicitor may be regarded by the Society as suitable to be authorised to practise as a sole solicitor.”’.
The Chairman: With this it will be convenient to take Government amendments Nos. 45 to 68, Nos. 79 to 81, Nos. 83 to 92, Nos. 95 to 100 and amendment No. 106.
Bridget Prentice: The list of amendments is daunting, but they have been drafted in response to amendments tabled in the other place on behalf of the Law Society. They create new powers over sole practitioners similar to existing powers over regulated recognised bodies. They require solicitors who want to run a sole practice to apply for endorsement to do so and to be subject to specific regulatory requirements. They also ensure effective powers over sole solicitors’ employees.
The purpose of the amendments is to provide the Law Society with enhanced powers to regulate sole practitioners and their employees. They bring many of the Law Society’s powers in relation to sole practitioner firms into line with its powers over partnerships and LLPs, and sole practitioner firms are often as large and as complex as recognised bodies. Overall, the amendments will ensure that all legal services practices are regulated according to the same principles. The consumers of such services will receive the same level of regulatory protection, regardless of whether they obtain legal services from a sole solicitor or a recognised body.
Simon Hughes: These are good proposals.
Amendment agreed to.
Amendments made: No. 45, in schedule 16, page 230, line 12, at end insert—
‘(1A) An application under this section may include an application for a sole solicitor endorsement.’.
No. 46, in schedule 16, page 230, line 13, after ‘application’, insert ‘under this section’.
No. 47, in schedule 16, page 230, line 41, at end insert
‘(including, if the certificate has a sole solicitor endorsement, an efficient practice as a sole solicitor);’.
No. 48, in schedule 16, page 231, line 11, after ‘certificate,’, insert—
‘( ) in relation to each solicitor who holds a practising certificate, a statement as to whether there is in force a sole solicitor endorsement,’.—[Bridget Prentice.]
Mr. Bellingham: I beg to move amendment No. 299, in schedule 16, page 231, line 22, leave out from ‘if’ to end of line 27 and insert
‘he has been required by rules made under section 35(1) to provide an accountant’s report and has failed to provide such a report within the time period prescribed under those rules,’.
The Chairman: With this it will be convenient to discuss the following amendments: No. 305, in schedule 16, page 232, line 41, leave out sub-paragraph (5).
No. 306, in schedule 16, page 233, line 18, at end insert—
‘(12) The decision of the High Court on an appeal under subsection (6) or (9) shall be final.’.
No. 307, in schedule 16, page 233, line 22, at end insert—
‘( ) in subsection (2) for “six” substitute “9”,
( ) in subsection (4) for “six” substitute “9”,’.
No. 308, in schedule 16, page 238, line 28, at end insert—
‘(3) The rules may make different provision for different categories of solicitors and for different circumstances.’.
No. 309, in schedule 16, page 248, line 39, at end insert—
‘(2) After that section insert—
“44F Power for Society to rebuke and reprimand
(1) Where the Society has investigated whether there has been professional misconduct by a solicitor, or whether a solicitor has failed to comply with any requirement imposed by or by virtue of this Act or any rules made by the Society, and the Society is satisfied that there was professional misconduct on the part of the solicitor, or that the solicitor did fail to comply with such a requirement or rule, but the Society is not satisfied that it is in the public interest to make a complaint against the solicitor to the Tribunal, the Society may rebuke or reprimand the solicitor and, unless it considers that it is not in the public interest to do so, may make public both the fact that the solicitor has been rebuked or reprimanded and a summary of the misconduct or failure concerned.
(2) The Society may make rules providing for rights of appeal to the Tribunal against rebukes or reprimands made by the Society where they are made, or proposed to be made, public or in such other circumstances as the Society may prescribe.
(3) Rules made under subsection (2) may also make provision about the procedure and practice to be followed in relation to—
(a) investigations as to whether there has been professional misconduct by a solicitor, or whether a solicitor has failed to comply with any requirement imposed by or by virtue of this Act or any rules made by the Council;
(b) the making of rebukes and reprimands; and
(c) the making public of rebukes and reprimands under subsection (1).’.
No. 320, in schedule 16, page 252, line 44, leave out paragraph 59 and insert—
‘59 In section 69 (action to recover solicitor’s costs)—
(a) in subsection (1) for “taxed” substitute “assessed”,
(b) for subsection (2) substitute—
“(2) The requirements referred to in subsection (1) are that the bill—
(a) must be signed—
(i) by the solicitor, or on his behalf by any employee authorised by the solicitor to do so;
(ii) if the costs are due to a firm, by one of the partners of that firm, either in his own name or in the name of the firm, or on his behalf by any employee authorised by any partner to do so; or
(iii) be enclosed in, or accompanied by, a letter which is so signed and refers to the bill;
(b) must be delivered to the party to be charged with the bill, either—
(i) personally;
(ii) by being sent to him by post to, or left for him at, his place of business, dwelling-house, or last known place of abode;
(iii) (subject to subsection (2A)) where he has provided an e-mail address to the solicitor for that purpose, by being sent to him by e-mail to that address (and, if he required that any attachment to an e-mail be in any particular electronic format, in accordance with that requirement); or
(iv) (subject to subsection (2A)) where he has provided a fax number to the solicitor for that purpose, by being sent to him by fax to that number; and
where a bill is proved to have been delivered in compliance with those requirements, it shall not be necessary in the first instance for the solictor to prove the contents of the bill and it shall be presumed, until the contrary is shown, to be a bill bona fide complying with this Act.
(2A) Sub-paragraph (iii) or (iv) of subsection (2)(b) does not apply if the party to be charged with the bill has indicated to the solicitor, before the bill is sent, that he is not willing to accept delivery of a bill sent by the method in question.
(2B) A bill which is sent by fax or e-mail is to be treated as having been delivered the working day after the day on which it was sent (unless the contrary is proved) and in this subsection “working day” means a day which is not a Saturday, Sunday, Bank Holiday or other public holiday,” and
(c) after subsection (3) insert—
“(3A) In subsection (2)(a) where a signature is required, an electronic signature incorporated into the document shall satisfy this requirement and an electronic signature is as much of anything in electronic form as
(a) is incorprated into or otherwise logically associated with any electronic communication or electronic data; and
(b) purports to be so incorporated or associated for the purpose of being used in establishing the authenticity of the communication or data, the integrity of the communication or data, or both.”’.
No. 310, in schedule 16, page 257, line 33, leave out paragraph (a) and insert—
‘(a) for sub-paragraph (1)(a) substitute—
“(a) the Society has reason to suspect dishonesty on the part of a solicitor;”.
(aa) after that sub-paragraph insert—
“(aa) the Society has reason to suspect dishonesty on the part of—
(i) an employee of a solicitor, or
(ii) the personal representatives of a deceased solicitor,
in connection with that solicitor’s practice or in connection with any trust of which that solicitor is or formerly was a trustee;”,’.
No. 311, in schedule 16, page 258, line 8, at end insert—
‘(iii) after “practice” insert “or has failed or is failing properly to attend to his practice”,’.
No. 312, in schedule 16, page 262, line 18, at end insert—
‘( ) in paragraph (d) omit “such”.’.
No. 313, in schedule 16, page 262, line 35, at end insert—
‘(ca) for recognition to be made subject to such conditions as the Council at any time sees fit to impose in such circumstances as are specified in the rules;
(cb) for the Society to require, in such circumstances as may be specified in the rules, recognised bodies to satisfy the Society as to their continuing suitability to be recognised under this section;’.
No. 314, in schedule 16, page 263, line 20, at end insert—
‘( ) Rules made by the Council under subsection (1) and (2) may make different provision for different categories of person or body and for different circumstances.’.
No. 315, in schedule 16, page 264, line 16, at end insert
‘and, if any such person is a body corporate, it also includes a manager of that body corporate’.
No. 316, in schedule 16, page 264, line 21, at end insert—
‘“solicitor business” means a business consisting of or including solicitor services;’.
No. 317, in schedule 16, page 267, line 35, at end insert—
‘“body” includes an individual who is carrying on a business as a sole principal;’.
No. 318, in schedule 16, page 279, line 7, leave out sub-paragraph (3) and insert—
‘(3) For sub-paragraph (2)(c) substitute—
“(c) a relevant insolvency event occurs in relation to a recognised body;
(ca) the Society has reason to suspect dishonesty on the part of any manager of a recognised body; or”.’.
No. 319, in schedule 16, page 281, line 14, leave out from ‘partnership’ to ‘and’ in line 15 and insert—
‘or the business of a sole principal, to a former manager of the body (within the meaning of Schedule 2 to the Administration of Justice Act 1985),’.
Mr. Bellingham: Schedule 16 rewrites the Solicitors Act 1974. It contains a great deal, including measures about practising certificates and the registration of holders. The issues include fees payable for practising certificates, measures about the roll or register as evidence and unqualified persons acting as solicitors. In fact, the schedule is a complete rewrite of the 1974 Act. When it comes to such large schedules, we have to take the Government at their word and give them the benefit of the doubt. We must also consult outside organisations, which is exactly what we have done.
The Government have responded satisfactorily to all the probing amendments tabled in the other place. Sarah Rivers of the Solicitors Regulation Authority has said:
“The SRA is broadly pleased with the substantial number of amendments that have been made to modernise our regulatory powers throughout the course of the Legal Services Bill’s passage in Parliament. We are especially grateful to the Conservative Front Bench, in tabling these technical amendments, for their help to achieve this.”
The SRA is particularly grateful to Lord Kingsland and Lord Hunt. There is only one outstanding issue. I am grateful that the Government have listened, because these are very technical and complicated amendments. As I have mentioned, we are effectively rewriting an earlier piece of legislation—I would not recommend doing that on a regular basis. We could almost have had a completely new solicitors Bill, but the Government decided to do it a different way by virtue of this schedule.
Amendment No. 307 seeks to provide for a longer period in which a solicitor can be suspended pending referral to the Solicitors Disciplinary Tribunal. The Government have made it clear that there are problems with the amendment. It is the only amendment that we have tabled that the Government have not been able to act on positively. Will the Minister tell us why that is?
This is really a congratulatory effort on my part. I would like to thank the Minister for listening to organisations such as the Law Society, the SRA and other bodies, which have had a constructive and imaginative input into the debate. As a consequence, we have a better and more effective schedule.
Having said that I was only going to talk for four minutes, I have now spoken for three minutes and 45 seconds. I will sit down, but once again, I want to thank the Minister and her team for listening very carefully and responding in a positive and helpful way—I wish that Ministers would do that the whole time. Fortunately, they do it from time to time, and when they do, we must congratulate and thank them.
Bridget Prentice: I would like to reassure the hon. Gentleman about amendment No. 307. We felt that it was not appropriate to extend the suspension from 12 to 18 months. Obviously, the SRA needs to be equipped to protect consumers from solicitors who have been convicted of fraud or serious crime. The amendment, however, might have had the undesirable effect of reducing incentives for the Law Society and the tribunal to deal with disciplinary cases swiftly. The SRA accepts that our concerns about long delays are important, and it has asked that the amendment is not pressed.
Simon Hughes: As the hon. Member for North-West Norfolk has said, this group and later groups of amendments concern the substantive law that governs the professions. The Law Society has promoted some of the changes, which the Minister picked up on. Have other people who might have an interest been consulted? We must be satisfied that there is broader confirmation that the Government are going in the right direction and that there are not any objections. I have understood the main objections, but I do not pretend to have my head round every single implication of all the changes to all the other Acts.
The Department has consulted people other than just the Law Society; it is satisfied this group of amendments and the other groups contain nothing that will cause anybody difficulty; and the amendments are all improvements to put the relevant houses in good order.
Mr. Bellingham: I am grateful to the Minister for what she has explained to the Committee. I am satisfied about that one outstanding amendment, and I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: No. 49, in schedule 16, page 231, line 40, after ‘application’, insert ‘for a practising certificate,
( ) if the application included an application for a sole solicitor endorsement, a decision to refuse the application for the endorsement’.
No. 50, in schedule 16, page 232, line 6, leave out ‘for a practising certificate’ and insert ‘under section 9’.
No. 51, in schedule 16, page 232, line 11, at end insert—
‘( ) direct the Society to make a sole solicitor endorsement on the applicant’s practising certificate and to issue that certificate subject to such conditions (if any) as the High Court may think fit,’.
No. 52, in schedule 16, page 232, line 16, after ‘it,’, insert—
‘( ) if the certificate has been endorsed with a sole solicitor endorsement, by order suspend the endorsement,’.
No. 53, in schedule 16, page 232, line 26, at end insert—
‘After section 13 insert—
“13ZA Application to practise as sole practitioner while practising certificate in force
(1) A solicitor whose practising certificate for the time being in force (his “current certificate”) does not have a sole solicitor endorsement, may apply to the Society for such an endorsement.
(2) For the purposes of subsection (1) a practising certificate with a sole solicitor endorsement which is suspended is to be treated as having such an endorsement.
(3) A solicitor may not apply under subsection (1) if he is suspended from practice as a sole solicitor.
(4) An application must be—
(a) made in accordance with regulations under section 28, and
(b) accompanied by any fee payable under section 13ZB in respect of the endorsement applied for.
(5) Where a sole solicitor endorsement is granted to an applicant of a prescribed description, the applicant’s practising certificate shall have effect subject to any conditions prescribed in relation to applicants of that description.
“Prescribed” means prescribed by regulations under section 28(3B)(ea).
(6) A person who makes an application under this section may appeal to the High Court against—
(a) a decision to refuse the application, or
(b) a decision to impose a condition on a practising certificate in accordance with subsection (5).
(7) The Society may by rules make provision, as respects any application under this section that is neither granted nor refused by the Society within such period as may be specified in the rules, for enabling an appeal to be brought under this section in relation to the application as if it had been refused by the Society.
(8) On an appeal under this section the High Court may—
(a) affirm the decision of the Society,
(b) direct the Society to grant a sole solicitor endorsement,
(c) direct that the applicant’s practising certificate is to have effect subject to such conditions (if any) as the High Court thinks fit, or
(d) make such other order as the High Court thinks fit.
(9) In relation to an appeal under this section the High Court may make such order as it thinks fit as to payment of costs.
(10) The decision of the High Court on an appeal under this section shall be final.
13ZB Fee payable on making of sole solicitor endorsement
(1) Before a sole solicitor endorsement is granted under section 13ZA, there must be paid to the Society in respect of the endorsement a fee of such amount as the Society may from time to time determine.
(2) Different fees may be specified for different categories of applicant and in different circumstances.
(3) If a fee payable under this section would not otherwise be a practising fee for the purposes of section 51 of the Legal Services Act 2007, it is to be treated for the purposes of that section as such a fee.
(4) In subsection (3) “practising fee” has the meaning given by that section.”’.
No. 54, in schedule 16, page 232, line 32, after ‘if’, insert—
‘(a) under section 13ZA the Society grants a sole solicitor endorsement, or
(b) ’.
No. 55, in schedule 16, page 233, line 22, at end insert—
‘( ) in subsection (1), after “practising certificate” insert “or sole solicitor endorsement”,
( ) in subsection (6), after “practice” insert “or from practice as a sole solicitor”,’.
No. 56, in schedule 16, page 233, line 26, after ‘Court”,’ insert—
‘( ) in paragraph (b), for “shall not be suspended but” substitute “or sole solicitor endorsement shall not be suspended, but that the appellant’s certificate”,’.
No. 57, in schedule 16, page 234, line 12, at end insert—
‘After section 17 insert—
“17A Suspension of sole solicitor endorsement
(1) The making by the Tribunal or by the court of an order suspending a solicitor from practice as a sole solicitor shall operate to suspend any sole solicitor endorsement of that solicitor for the time being in force.
(2) For the purposes of this Act, a sole solicitor endorsement shall be deemed not to be in force at any time while it is suspended.
(3) Subsection (2) is subject to section 13ZA(2).
17B Duration and publicity of suspension of sole solicitor endorsement
(1) Where a sole solicitor endorsement is suspended, it expires on such date as may be prescribed by regulations under section 28.
(2) Where a solicitor’s sole solicitor endorsement is suspended—
(a) by an order under section 13(4), or
(b) by virtue of section 17A(1) in circumstances where the period of that suspension expires before the date on which his endorsement will expire,
the solicitor may at any time before the endorsement expires apply to the Society to terminate the suspension.
(3) Section 16(4) to (7) apply in relation to an application under subsection (2) as they apply in relation to an application under section 16(3).
(4) Where a solicitor’s sole solicitor endorsement is suspended by an order under section 13(4) or by virtue of section 17A(1), the Society shall forthwith cause notice of that suspension to be published and a note of it to be entered against the name of the solicitor on the roll.
(5) Where any suspension is terminated by virtue of section 16(4) or (5), as applied by subsection (3) of this section, the Society shall forthwith cause a note of that termination to be entered against the name of the solicitor on the roll and, if so requested in writing by the solicitor, a notice of it to be published.”’.
No. 58, in schedule 16, page 235, line 6, after ‘them”,’ insert—
‘( ) after that paragraph insert—
“(ca) sole solicitor endorsements and applications for them,”’.
No. 59, in schedule 16, page 235, line 22, after ‘certificates’, insert ‘or sole solicitor endorsements’.
No. 60, in schedule 16, page 235, line 24, after ‘certificates’, insert ‘or sole solicitor endorsements’.
No. 61, in schedule 16, page 235, line 36, at end insert—
‘(ea) prescribe descriptions of applicants, and conditions in relation to them, for the purposes of section 13ZA(5) (circumstances in which a practising certificate endorsed with a sole solicitor endorsement after it was issued must be made subject to prescribed conditions);’.
No. 62, in schedule 16, page 235, line 47, after ‘certificates’, insert ‘or sole solicitor endorsements’.
No. 63, in schedule 16, page 237, line 33, at end insert ‘, and
(c) after “solicitor” (in both places) insert “or any of his employees”.’.
No. 64, in schedule 16, page 239, line 7, at end insert—
‘After section 34 insert—
“Sole solicitors
34A Employees of solicitors
(1) Rules made by the Society may provide for any rules made under section 31, 32, 33A or 34 to have effect in relation to employees of solicitors with such additions, omissions or other modifications as appear to the Society to be necessary or expedient.
(2) If any employee of a solicitor fails to comply with rules made under section 31 or 32, as they have effect in relation to the employee by virtue of subsection (1), any person may make a complaint in respect of that failure to the Tribunal.
(3) If any employee of a solicitor fails to comply with rules made under section 34, as they have effect in relation to the employee by virtue of subsection (1), a complaint in respect of that failure may be made to the Tribunal by or on behalf of the Society.
34B Employees of solicitors: accounts rules etc
(1) Where rules made under section 32(1) have effect in relation to employees of solicitors by virtue of section 34A(1), section 85 applies in relation to an employee to whom the rules have effect who keeps an account with a bank or building society in pursuance of such rules as it applies in relation to a solicitor who keeps such an account in pursuance of rules under section 32.
(2) Subsection (3) applies where rules made under section 32—
(a) contain any such provision as is referred to in section 33(1), and
(b) have effect in relation to employees of solicitors by virtue of section 34A(1).
(3) Except as provided by the rules, an employee to whom the rules are applied is not liable to account to any client, other person or trust for interest received by the employee on money held at a bank or building society in an account which is for money received or held for, or on account of—
(a) clients of the solicitor, other persons or trusts, generally, or
(b) that client, person or trust, separately.
(4) Subsection (5) applies where rules made under section 33A(1) have effect in relation to employees of solicitors by virtue of section 34A(1).
(5) The Society may disclose a report on or information about the accounts of any employee of a solicitor obtained in pursuance of such rules for use—
(a) in investigating the possible commission of an offence by the solicitor or any employees of the solicitor, and
(b) in connection with any prosecution of the solicitor or any employees of the solicitor consequent on the investigation.
(6) Where rules made under section 34 have effect in relation to employees of solicitors by virtue of subsection (1), section 34(9) and (10) apply in relation to such an employee as they apply in relation to a solicitor.”’.
No. 65, in schedule 16, page 242, line 45, at end insert—
‘(ia) no employee of a solicitor shall employ or remunerate, in connection with the solicitor’s practice, the person with respect to whom the order is made,’.
No. 185, in schedule 16, page 243, line 45, leave out ‘in shares’.
No. 66, in schedule 16, page 244, line 6, after ‘solicitor’, insert
‘, or an employee of a solicitor,’.
No. 67, in schedule 16, page 244, line 8, after ‘solicitor’, insert ‘or employee’.
No. 186, in schedule 16, page 244, line 38, leave out ‘in shares’.
No. 187, in schedule 16, page 245, line 5, leave out ‘in shares’.
No. 68, in schedule 16, page 245, line 11, after ‘solicitor’, insert
‘or an employee of a solicitor’.—[Bridget Prentice.]
Bridget Prentice: I beg to move amendment No. 69, in schedule 16, page 245, line 38, after ‘purpose’, insert ‘—
(a) ’.
The Chairman: With this it will be convenient to take the following Government amendments Nos. 70 to 77,
Government amendment No. 78, in schedule 16, page 248, line 39, at end insert—
‘After that section insert—
44D Disciplinary powers of the Society
(1) This section applies where the Society is satisfied—
(a) that a solicitor or an employee of a solicitor has failed to comply with a requirement imposed by or by virtue of this Act or any rules made by the Society, or
(b) that there has been professional misconduct by a solicitor.
(2) The Society may do one or both of the following—
(a) give the person a written rebuke;
(b) direct the person to pay a penalty not exceeding £2,000.
(3) The Society may publish details of any action it has taken under subsection (2)(a) or (b), if it considers it to be in the public interest to do so.
(4) Where the Society takes action against a person under subsection (2)(b), or decides to publish under subsection (3) details of any action taken under subsection (2)(a) or (b), it must notify the person in writing that it has done so.
(5) A penalty imposed under subsection (2)(b) does not become payable until—
(a) the end of the period during which an appeal against the decision to impose the penalty, or the amount of the penalty, may be made under section 44E, or
(b) if such an appeal is made, such time as it is determined or withdrawn.
(6) The Society may not publish under subsection (3) details of any action under subsection (2)(a) or (b)—
(a) during the period within which an appeal against—
(i) the decision to take the action,
(ii) in the case of action under subsection (2)(b), the amount of the penalty, or
(iii) the decision to publish the details,
may be made under section 44E, or
(b) if such an appeal has been made, until such time as it is determined or withdrawn.
(7) The Society must make rules—
(a) prescribing the circumstances in which the Society may decide to take action under subsection (2)(a) or (b);
(b) about the practice and procedure to be followed by the Society in relation to such action;
(c) governing the publication under subsection (3) of details of action taken under subsection (2)(a) or (b);
and the Society may make such other rules in connection with the exercise of its powers under this section as it considers appropriate.
(8) Before making rules under subsection (7), the Society must consult the Tribunal.
(9) A penalty payable under this section may be recovered as a debt due to the Society, and is to be forfeited to Her Majesty.
(10) The Lord Chancellor may, by order, amend paragraph (b) of subsection (2) so as to substitute for the amount for the time being specified in that paragraph such other amount as may be specified in the order.
(11) Before making an order under subsection (10), the Lord Chancellor must consult the Society.
(12) An order under subsection (10) is to be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.
(13) This section is without prejudice to any power conferred on the Society or any other person to make an application or complaint to the Tribunal.
44E Appeals against disciplinary action under section 44D
(1) A person may appeal against—
(a) a decision by the Society to rebuke that person under section 44D(2)(a) if a decision is also made to publish details of the rebuke;
(b) a decision by the Society to impose a penalty on that person under section 44D(2)(b) or the amount of that penalty;
(c) a decision by the Society to publish under section 44D(3) details of any action taken against that person under section 44D(2)(a) or (b).
(2) Subsections (9)(b), (10)(a) and (b), (11) and (12) of section 46 (Tribunal rules about procedure for hearings etc) apply in relation to appeals under this section as they apply in relation to applications or complaints, except that subsection (11) of that section is to be read as if for “the applicant” to “application)” there were substituted “any party to the appeal”.
(3) Rules under section 46(9)(b) may, in particular, make provision about the period during which an appeal under this section may be made.
(4) On an appeal under this section, the Tribunal has power to make such order as it thinks fit, and such an order may in particular—
(a) affirm the decision of the Society;
(b) revoke the decision of the Society;
(c) in the case of a penalty imposed under section 44D(2)(b), vary the amount of the penalty;
(d) in the case of a solicitor, contain provision for any of the matters mentioned in paragraphs (a) to (d) of section 47(2);
(e) in the case of an employee of a solicitor, contain provision for any of the matters mentioned in section 47(2E);
(f) make such provision as the Tribunal thinks fit as to payment of costs.
(5) Where by virtue of subsection (4)(e) an order contains provision for any of the matters mentioned in section 47(2E)(c), section 47(2F) and (2G) apply as if the order had been made under section 47(2E)(c).
(6) An appeal from the Tribunal shall lie to the High Court, at the instance of the Society or the person in respect of whom the order of the Tribunal was made.
(7) The High Court shall have power to make such order on an appeal under this section as it may think fit.
(8) Any decision of the High Court on an appeal under this section shall be final.
(9) This section is without prejudice to any power conferred on the Tribunal in connection with an application or complaint made to it.”’.
No. (a), in line 12, leave out lines 12 to 14 and insert—
‘(3) The Society may publish details of any action it has taken under subsection (2)(a) or (b), unless it considers that it is not in the public interest to do so.’.
No. (b), in line 81, at end insert—
‘( ) vary the decision of the Society;’.
Government amendment No. 82
Government amendment No. 93
Government amendment No. 94, in schedule 16, page 273, line 38, at end insert—
‘After that paragraph insert—
“Disciplinary powers of the Society
14B (1) This paragraph applies where the Society is satisfied that a recognised body, or a manager or employee of a recognised body, has failed to comply with a requirement imposed by or by virtue of this Act or any rules applicable to that person by virtue of section 9 of this Act.
(2) The Society may do one or both of the following—
(a) give the person a written rebuke;
(b) direct the person to pay a penalty not exceeding £2,000.
(3) The Society may publish details of any action it has taken under sub-paragraph (2)(a) or (b), if it considers it to be in the public interest to do so.
(4) Where the Society takes action against a person under sub-paragraph (2)(b), or decides to publish under sub-paragraph (3) details of such action under sub-paragraph (2)(a) or (b), it must notify the person in writing that it has done so.
(5) A penalty imposed under sub-paragraph (2)(b) does not become payable until—
(a) the end of the period during which an appeal against the decision to impose the penalty, or the amount of the penalty, may be made under paragraph 14C, or
(b) if such an appeal is made, such time as it is determined or withdrawn.
(6) The Society may not publish under sub-paragraph (3) details of any action under sub-paragraph (2)(a) or (b)—
(a) during the period within which an appeal against—
(i) the decision to take the action,
(ii) in the case of action under sub-paragraph (2)(b), the amount of the penalty, or
(iii) the decision to publish the details,
may be made under paragraph 14C, or
(b) if such an appeal has been made, until such time as it is determined or withdrawn.
(7) The Society must make rules—
(a) prescribing the circumstances in which the Society may decide to take action under sub-paragraph (2)(a) or (b);
(b) about the practice and procedure to be followed by the Society in relation to such action;
(c) governing the publication under sub-paragraph (3) of details of action taken under sub-paragraph (2)(a) or (b);
and the Society may make such other rules in connection with the exercise of its powers under this paragraph as it considers appropriate.
(8) Before making rules under sub-paragraph (7), the Society must consult the Tribunal.
(9) A penalty under this paragraph may be recovered as a debt due to the Society, and is to be forfeited to Her Majesty.
(10) The Lord Chancellor may, by order, amend paragraph (b) of sub-paragraph (2) so as to substitute for the amount for the time being specified in that paragraph such other amount as may be specified in the order.
(11) Before making an order under sub-paragraph (10), the Lord Chancellor must consult the Society.
(12) An order under sub-paragraph (10) is to be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.
(13) This paragraph is without prejudice to any power conferred on the Society, or any other person, to make an application or complaint to the Tribunal.
14C (1) A person may appeal against—
(a) a decision by the Society to rebuke that person under paragraph 14B(2)(a) if a decision is also made to publish details of the rebuke;
(b) a decision by the Society to impose a penalty on that person under paragraph 14B(2)(b) or the amount of that penalty;
(c) a decision by the Society to publish under paragraph 14B(3) details of any action taken against that person under paragraph 14B(2)(a) or (b).
(2) Subsections (9)(b), (10)(a) and (b), (11) and (12) of section 46 of the 1974 Act (Tribunal rules about procedure for hearings etc) apply in relation to appeals under this paragraph as they apply in relation to applications or complaints, except that subsection (11) of that section is to be read as if for “the applicant” to “application)” there were substituted “any party to the appeal”.
(3) Rules under section 46(9)(b) of the 1974 Act may, in particular, make provision about the period during which an appeal under this paragraph may be made.
(4) On an appeal under this paragraph, the Tribunal has power to make an order which—
(a) affirms the decision of the Society;
(b) revokes the decision of the Society;
(c) in the case of a penalty imposed under paragraph 14B(2)(b), varies the amount of the penalty;
(d) in the case of a recognised body, contains provision for any of the matters mentioned in paragraph 18(2);
(e) in the case of a manager or employee of a recognised body, contains provision for any of the matters mentioned in paragraph 18A(2);
(f) makes such provision as the Tribunal thinks fit as to payment of costs.
(5) Where, by virtue of sub-paragraph (4)(e), an order contains provision for any of the matters mentioned in sub-paragraph (2)(c) of paragraph 18A, sub-paragraphs (4) and (5) of that paragraph apply as if the order had been made under sub-paragraph (2)(c) of that paragraph.
(6) An appeal from the Tribunal shall lie to the High Court, at the instance of the Society or the person in respect of whom the order of the Tribunal was made.
(7) The High Court shall have power to make such order on an appeal under this paragraph as it may think fit.
(8) Any decision of the High Court on an appeal under this section shall be final.
(9) This paragraph is without prejudice to any power conferred on the Tribunal in connection with an application or complaint made to it.”’.
No. (a), in line 12, leave out lines 12 to 14 and insert—
‘(3) The Society may publish details of any action it has taken under subsection (2)(a) or (b), unless it considers that it is not in the public interest to do so.’.
No. (b), in line 81, at end insert—
‘( ) varies the decision of the Society;’.
Bridget Prentice: Again, I hope to speak briefly to the amendments, which are technical. They would provide the scope of the Law Society’s powers, so that they were properly applied to the correct persons. The power to rebuke and to fine is an important one, and the approved regulators must be able to take appropriate action against those whom they regulate. The powers in the amendments would allow the society to act quickly and effectively when its rules are breached and when there is a finding of professional misconduct against a solicitor.
The intention is that more minor rule breaches and professional misconduct would be dealt with by the Law Society, while the solicitors disciplinary tribunal would determine the more serious cases. The SDT would have an unlimited power to fine, but the maximum penalty for the Law Society would be £2,000.
8.30 pm
Mr. Bellingham: The Conservatives support the amendments. They are spot on and we thank the Minister for tabling them. [ Interruption. ] I was put off by that noise, Sir Nicholas, but I said that we support the amendments.
The Chairman: My attention was also diverted; I trust that the instrument has now been switched off. I do not know whose it was—
Mr. Tobias Ellwood (Bournemouth, East) (Con): I request an inquest.
The Chairman: After the Committee is over.
John Mann: I presume, Sir Nicholas, that it is in order to move amendments (a) and (b)?
The Chairman: It is in order to speak to them; if you wish to move them formally, that will come later.
John Mann: I shall speak to them separately, as they are quite different.
Amendment (a) would make a technical change to Government amendment No. 78. It would change the obligation to publish from one that would need a positive step to be taken to an obligation to consider that it would not be in the public interest to publish. It is a subtle but important change and would result in an automatic presumption that things would be put in the public domain rather than it having to be proven in each case. It would assist good working to ensure that, unless there was good reason not to do so, everything would be put in the public domain. I am sure that the Minister will be fully convinced by the logic of my argument.
Amendment (b) would allow the variation by a tribunal of decisions of the Law Society. That is important, because if the tribunal has to decide yea or nay—all or nothing—there would be more danger of a clever solicitor making a defence that was partially convincing. There would thus be more likelihood of the tribunal saying no, even on a technicality, because it would have no option. In such instances, the tribunal ought to be able to make a halfway determination. It strikes me that the balance would otherwise always be with the clever or technical argument, which could dominate tribunal decisions, whereas allowing a variation would mean that the tribunal could determine whatever it chose, based on all the facts.
Bridget Prentice: I imagine that we agree that there ought to be transparency in the Law Society’s decision making process. In many circumstances, it will clearly be in the public interest to publish once a fine or rebuke has been issued. However, I am not sure that it should be the default position for disciplinary action of that type to be published automatically. As it happens, I am not convinced that amendment (a) would achieve automatic publication unless it was not in the public interest, because it states that the Law Society “may” publish.
Given the intention behind my hon. Friend’s amendment, I shall explain our view. We believe that due consideration should be given in each case. However, it is more appropriate and probably more proportionate to take action as set out in Government amendments Nos. 78 and 94, in which it is anticipated that the Law Society would at the time of the determination consider whether or not it was in the public interest to publish. That leads to the idea that it may not necessarily be appropriate to publish determinations.
My hon. Friend’s other amendment would allow the tribunal to
“vary the decision of the Society”.
I entirely agree with that position, but Government amendments Nos. 78 and 94 already provide the tribunal with a large number of powers, which can be exercised on appeal. They amount to the ability to vary or replace every aspect of a decision that has been appealed. That includes the power to vary the penalty and to make such an order as it sees fit. That gives the tribunal the scope to
“vary the decision of the society”
that my hon. Friend seeks.
Government amendment No. 94 also contains a range of powers that is sufficient to consider an appeal, including the power to vary the amount of the penalty. I hope that those amendments, which give the tribunal wide scope, cover the proper concerns that my hon. Friend raised. I therefore ask him not to press his amendments to a vote.
Amendment agreed to.
Amendments made: No. 70, in schedule 16, page 245, line 49, at end insert ‘, and
(b) the reference to the solicitor or his personal representative in paragraph 13 of that Schedule is to be construed as a reference to the person to whom the notice was given under this section.”’.
No. 71, in schedule 16, page 246, line 15, leave out ‘reference’ and insert ‘references’.
No. 72, in schedule 16, page 246, line 15, after ‘9(5)’, insert ‘and (6)’.
No. 73, in schedule 16, page 246, line 22, at end insert—
‘(7A) Where powers conferred by Part 2 of Schedule 1 to the 1974 Act are exercisable in relation to a person within paragraph (a), (b), (c) or (d) of subsection (2), they continue to be so exercisable after the person has ceased to be a person within the paragraph in question.’.
No. 188, in schedule 16, page 246, line 28, leave out ‘in shares’.
No. 74, in schedule 16, page 246, line 41, after ‘purpose’, insert ‘—
(a) ’.
No. 75, in schedule 16, page 247, line 2, at end insert ‘, and
(b) the reference to the solicitor or his personal representative in paragraph 13 of that Schedule is to be construed as a reference to the person to whom the notice was given under this section.”’.
No. 76, in schedule 16, page 247, line 36, at end insert ‘, and
(c) the reference to the solicitor or his personal representative in paragraph 13 of that Schedule is to be construed as a reference to the person to whom the notice was given under this section.’.
No. 77, in schedule 16, page 248, line 39, at end insert—
‘(5) This section (other than subsection (2)(a)) applies in relation to an employee of a solicitor as it applies in relation to a solicitor.’.
No. 78, in schedule 16, page 248, line 39, at end insert—
‘After that section insert—
“Disciplinary powers of the Society
44D Disciplinary powers of the Society
(1) This section applies where the Society is satisfied—
(a) that a solicitor or an employee of a solicitor has failed to comply with a requirement imposed by or by virtue of this Act or any rules made by the Society, or
(b) that there has been professional misconduct by a solicitor.
(2) The Society may do one or both of the following—
(a) give the person a written rebuke;
(b) direct the person to pay a penalty not exceeding £2,000.
(3) The Society may publish details of any action it has taken under subsection (2)(a) or (b), if it considers it to be in the public interest to do so.
(4) Where the Society takes action against a person under subsection (2)(b), or decides to publish under subsection (3) details of any action taken under subsection (2)(a) or (b), it must notify the person in writing that it has done so.
(5) A penalty imposed under subsection (2)(b) does not become payable until—
(a) the end of the period during which an appeal against the decision to impose the penalty, or the amount of the penalty, may be made under section 44E, or
(b) if such an appeal is made, such time as it is determined or withdrawn.
(6) The Society may not publish under subsection (3) details of any action under subsection (2)(a) or (b)—
(a) during the period within which an appeal against—
(i) the decision to take the action,
(ii) in the case of action under subsection (2)(b), the amount of the penalty, or
(iii) the decision to publish the details,
may be made under section 44E, or
(b) if such an appeal has been made, until such time as it is determined or withdrawn.
(7) The Society must make rules—
(a) prescribing the circumstances in which the Society may decide to take action under subsection (2)(a) or (b);
(b) about the practice and procedure to be followed by the Society in relation to such action;
(c) governing the publication under subsection (3) of details of action taken under subsection (2)(a) or (b);
and the Society may make such other rules in connection with the exercise of its powers under this section as it considers appropriate.
(8) Before making rules under subsection (7), the Society must consult the Tribunal.
(9) A penalty payable under this section may be recovered as a debt due to the Society, and is to be forfeited to Her Majesty.
(10) The Lord Chancellor may, by order, amend paragraph (b) of subsection (2) so as to substitute for the amount for the time being specified in that paragraph such other amount as may be specified in the order.
(11) Before making an order under subsection (10), the Lord Chancellor must consult the Society.
(12) An order under subsection (10) is to be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.
(13) This section is without prejudice to any power conferred on the Society or any other person to make an application or complaint to the Tribunal.
44E Appeals against disciplinary action under section 44D
(1) A person may appeal against—
(a) a decision by the Society to rebuke that person under section 44D(2)(a) if a decision is also made to publish details of the rebuke;
(b) a decision by the Society to impose a penalty on that person under section 44D(2)(b) or the amount of that penalty;
(c) a decision by the Society to publish under section 44D(3) details of any action taken against that person under section 44D(2)(a) or (b).
(2) Subsections (9)(b), (10)(a) and (b), (11) and (12) of section 46 (Tribunal rules about procedure for hearings etc) apply in relation to appeals under this section as they apply in relation to applications or complaints, except that subsection (11) of that section is to be read as if for “the applicant” to “application)” there were substituted “any party to the appeal”.
(3) Rules under section 46(9)(b) may, in particular, make provision about the period during which an appeal under this section may be made.
(4) On an appeal under this section, the Tribunal has power to make such order as it thinks fit, and such an order may in particular—
(a) affirm the decision of the Society;
(b) revoke the decision of the Society;
(c) in the case of a penalty imposed under section 44D(2)(b), vary the amount of the penalty;
(d) in the case of a solicitor, contain provision for any of the matters mentioned in paragraphs (a) to (d) of section 47(2);
(e) in the case of an employee of a solicitor, contain provision for any of the matters mentioned in section 47(2E);
(f) make such provision as the Tribunal thinks fit as to payment of costs.
(5) Where by virtue of subsection (4)(e) an order contains provision for any of the matters mentioned in section 47(2E)(c), section 47(2F) and (2G) apply as if the order had been made under section 47(2E)(c).
(6) An appeal from the Tribunal shall lie to the High Court, at the instance of the Society or the person in respect of whom the order of the Tribunal was made.
(7) The High Court shall have power to make such order on an appeal under this section as it may think fit.
(8) Any decision of the High Court on an appeal under this section shall be final.
(9) This section is without prejudice to any power conferred on the Tribunal in connection with an application or complaint made to it.”’.
No. 79, in schedule 16, page 249, line 34, at end insert—
‘( ) in subsection (1), after paragraph (e) insert—
“(ea) by a solicitor who has been suspended from practice as a sole solicitor for an unspecified period, by order of the Tribunal, for the termination of that suspension;”,
( ) in subsection (2) for “subsection” (where it first occurs) substitute “subsections (2E) and”,
( ) after subsection (2)(b) insert—
“(ba) the revocation of that solicitor’s sole solicitor endorsement (if any);
(bb) the suspension of that solicitor from practice as a sole solicitor indefinitely or for a specified period;”,’.
No. 80, in schedule 16, page 249, line 35, after ‘£5,000”,’ insert—
‘( ) after subsection (2)(e) insert—
“(ea) the termination of that solicitor’s unspecified period of suspension from practice as a sole solicitor;”,
( ) after subsection (2D) insert—
“(2E) On the hearing of any complaint made to the Tribunal by virtue of section 34A(2) or (3), the Tribunal shall have power to make one or more of the following—
(a) an order directing the payment by the employee to whom the complaint relates 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 that employee;
(c) if that employee is not a solicitor, an order which states one or more of the matters mentioned in paragraphs (a) to (c) of section 43(2);
(d) an order requiring the Society to refer to an appropriate regulator any matter relating to the conduct of that employee.
(2F) Subsections (1) to (1C), (3) and (4) of section 44 apply in relation to an order under subsection (2E)(c) as they apply in relation to an order under section 43(2).
(2G) Section 44(2), paragraph 16(1)(d) and (1A)(d) of Schedule 2 to the Administration of Justice Act 1985 and paragraph 15(3A) of Schedule 14 to the Courts and Legal Services Act 1990 apply in relation to an order under subsection (2E)(c) as they apply in relation to an order under section 43(2).
(2H) For the purposes of subsection (2E)(d) an “appropriate regulator” in relation to an employee means—
(a) if the employee is an authorised person in relation to a reserved legal activity (within the meaning of the Legal Services Act 2007), any relevant approved regulator (within the meaning of that Act) in relation to that employee, and
(b) if the employee carries on activities which are not reserved legal activities (within the meaning of that Act), any body which regulates the carrying on of such activities by the employee.”,’.
No. 81, in schedule 16, page 249, line 41, after ‘Tribunal)’, insert—
‘(a) in subsection (2)(b)—
(i) after “(e),” insert “(ea),”, and
(ii) omit “in the London Gazette”, and
(b) ’.
No. 82, in schedule 16, page 249, line 42, at end insert ‘, and
(c) after subsection (4) insert—
“(5) In the case of orders of the Tribunal under section 44E, the reference in subsection (2)(a) to the application or complaint is to be read as a reference to the Tribunal’s order.”’.
No. 83, in schedule 16, page 250, line 13, after ‘(e)’, insert ‘, (ea)’.
No. 84, in schedule 16, page 251, line 20, after ‘(5)’, insert ‘—
(a) ’.
No. 85, in schedule 16, page 251, line 23, at end insert ‘, and
(b) in paragraph (d) after “solicitor” insert “, or any employee of his who is an authorised person,”.
( ) After that subsection insert—
“(5A) In subsection (5) “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).”’.
No. 86, in schedule 16, page 251, line 43, leave out ‘negligence’ and insert
‘his negligence, or that of any employee of his,’.
No. 87, in schedule 16, page 252, line 27, at end insert ‘, and
(iii) after “solicitor” (in the third place) insert “, or any of his employees,’.
No. 88, in schedule 16, page 252, line 39, at end insert—
‘(d) in paragraph (a), after “solicitor” (in the second place) insert “or an employee of the solicitor”, and
(e) in paragraph (b), after “him” insert “or by any employee of his who is an authorised person (within the meaning of section 56(5A))”.’.
No. 89, in schedule 16, page 257, line 21, after ‘32(1)(a)”,’ insert—
‘( ) after the definition of “sole solicitor” insert—
““sole solicitor endorsement” has the same meaning as in section 1B;”’.
No. 90, in schedule 16, page 257, line 35, at end insert—
‘( ) after “trustee” insert “or that employee is or was a trustee in his capacity as such an employee”,’.
No. 91, in schedule 16, page 258, line 33, leave out paragraph (b) and insert—
‘(b) for paragraph (a) substitute—
“(a) the Society is satisfied that there has been undue 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
(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”,’.
No. 92, in schedule 16, page 259, line 1, leave out paragraph (b) and insert—
‘(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
(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’.
No. 191, in schedule 16, page 265, line 45, after ‘managers’, insert ‘or employees’.
No. 193, in schedule 16, page 266, line 4, leave out ‘in shares’.
No. 194, in schedule 16, page 270, line 42, at end insert
‘, and for this purpose a person has an interest in the body if he has an interest in the body within the meaning of Part 5 of the Legal Services Act 2007 (see sections 72 and 109 of that Act).’.
No. 195, in schedule 16, page 272, line 10, leave out ‘in shares’.
No. 196, in schedule 16, page 272, line 35, leave out ‘in shares’.
No. 93, in schedule 16, page 273, line 3, at end insert—
‘( ) Where powers conferred by Part 2 of Schedule 1 to the 1974 Act are exercisable in relation to a person within paragraph (a), (b) or (c) of sub-paragraph (3), they continue to be so exercisable after the person has ceased to be a person within the paragraph in question.’
No. 94, in schedule 16, page 273, line 38, at end insert—
‘After that paragraph insert—
“Disciplinary powers of the Society
14B (1) This paragraph applies where the Society is satisfied that a recognised body, or a manager or employee of a recognised body, has failed to comply with a requirement imposed by or by virtue of this Act or any rules applicable to that person by virtue of section 9 of this Act.
(2) The Society may do one or both of the following—
(a) give the person a written rebuke;
(b) direct the person to pay a penalty not exceeding £2,000.
(3) The Society may publish details of any action it has taken under sub-paragraph (2)(a) or (b), if it considers it to be in the public interest to do so.
(4) Where the Society takes action against a person under sub-paragraph (2)(b), or decides to publish under sub-paragraph (3) details of such action under sub-paragraph (2)(a) or (b), it must notify the person in writing that it has done so.
(5) A penalty imposed under sub-paragraph (2)(b) does not become payable until—
(a) the end of the period during which an appeal against the decision to impose the penalty, or the amount of the penalty, may be made under paragraph 14C, or
(b) if such an appeal is made, such time as it is determined or withdrawn.
(6) The Society may not publish under sub-paragraph (3) details of any action under sub-paragraph (2)(a) or (b)—
(a) during the period within which an appeal against—
(i) the decision to take the action,
(ii) in the case of action under sub-paragraph (2)(b), the amount of the penalty, or
(iii) the decision to publish the details,
may be made under paragraph 14C, or
(b) if such an appeal has been made, until such time as it is determined or withdrawn.
(7) The Society must make rules—
(a) prescribing the circumstances in which the Society may decide to take action under sub-paragraph (2)(a) or (b);
(b) about the practice and procedure to be followed by the Society in relation to such action;
(c) governing the publication under sub-paragraph (3) of details of action taken under sub-paragraph (2)(a) or (b);
and the Society may make such other rules in connection with the exercise of its powers under this paragraph as it considers appropriate.
(8) Before making rules under sub-paragraph (7), the Society must consult the Tribunal.
(9) A penalty under this paragraph may be recovered as a debt due to the Society, and is to be forfeited to Her Majesty.
(10) The Lord Chancellor may, by order, amend paragraph (b) of sub-paragraph (2) so as to substitute for the amount for the time being specified in that paragraph such other amount as may be specified in the order.
(11) Before making an order under sub-paragraph (10), the Lord Chancellor must consult the Society.
(12) An order under sub-paragraph (10) is to be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.
(13) This paragraph is without prejudice to any power conferred on the Society, or any other person, to make an application or complaint to the Tribunal.
14C (1) A person may appeal against—
(a) a decision by the Society to rebuke that person under paragraph 14B(2)(a) if a decision is also made to publish details of the rebuke;
(b) a decision by the Society to impose a penalty on that person under paragraph 14B(2)(b) or the amount of that penalty;
(c) a decision by the Society to publish under paragraph 14B(3) details of any action taken against that person under paragraph 14B(2)(a) or (b).
(2) Subsections (9)(b), (10)(a) and (b), (11) and (12) of section 46 of the 1974 Act (Tribunal rules about procedure for hearings etc) apply in relation to appeals under this paragraph as they apply in relation to applications or complaints, except that subsection (11) of that section is to be read as if for “the applicant” to “application)” there were substituted “any party to the appeal”.
(3) Rules under section 46(9)(b) of the 1974 Act may, in particular, make provision about the period during which an appeal under this paragraph may be made.
(4) On an appeal under this paragraph, the Tribunal has power to make an order which—
(a) affirms the decision of the Society;
(b) revokes the decision of the Society;
(c) in the case of a penalty imposed under paragraph 14B(2)(b), varies the amount of the penalty;
(d) in the case of a recognised body, contains provision for any of the matters mentioned in paragraph 18(2);
(e) in the case of a manager or employee of a recognised body, contains provision for any of the matters mentioned in paragraph 18A(2);
(f) makes such provision as the Tribunal thinks fit as to payment of costs.
(5) Where, by virtue of sub-paragraph (4)(e), an order contains provision for any of the matters mentioned in sub-paragraph (2)(c) of paragraph 18A, sub-paragraphs (4) and (5) of that paragraph apply as if the order had been made under sub-paragraph (2)(c) of that paragraph.
(6) An appeal from the Tribunal shall lie to the High Court, at the instance of the Society or the person in respect of whom the order of the Tribunal was made.
(7) The High Court shall have power to make such order on an appeal under this paragraph as it may think fit.
(8) Any decision of the High Court on an appeal under this section shall be final.
(9) This paragraph is without prejudice to any power conferred on the Tribunal in connection with an application or complaint made to it.”’.
No. 95, in schedule 16, page 275, line 29, after ‘solicitor’, insert ‘or employee of a solicitor’.
No. 96, in schedule 16, page 275, line 30, leave out ‘his practice as a’ and insert ‘the practice carried on by that’.
No. 197, in schedule 16, page 275, line 47, at end insert—
‘( ) 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 of the Legal Services Act 2007 (see sections 72 and 109 of that Act).’.
No. 97, in schedule 16, page 277, line 2, after ‘solicitor’, insert
‘or any employee of the solicitor who is an authorised person’.
No. 98, in schedule 16, page 277, line 23, at end insert—
‘(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 of its business as a recognised body shall be void.’.
No. 99, in schedule 16, page 280, line 35, leave out ‘or employee’.
No. 100, in schedule 16, page 280, line 37, leave out ‘or employee’.—[Bridget Prentice.]
Bridget Prentice: I beg to move amendment No. 101, in schedule 16, page 281, line 18, after ‘etc)’, insert ‘—
(a) for sub-paragraph (1) substitute—
“(1) Where a recognised body acts as such for a client, any communication, document, material or information is privileged from disclosure in like manner as if the recognised body had at all material times been a solicitor acting for the client.”, and
(b) ’.
The Chairman: With this, it will be convenient to discuss Government amendments Nos. 102, 18 to 27, 103 to 105 and 107.
Bridget Prentice: The amendments ensure that the provisions in the Bill and in five other statutory provisions are consistent with the common law on legal professional privilege. The Bill already provides that the clients of ABS firms should have the same degree of LPP protection as the clients of any other type of legal service provider. That was set out in what used to be subsections (3) to (7) of clause 182.
However, both the Bar Council and the Law Society raised the possibility that certain terms in that provision might not reflect fully the current state of the common law of LPP. The wording reflected similar wording used in other statutory provisions that ensure LPP protection for clients of certain legal services providers, such as recognised bodies and licensed conveyancers. We have looked carefully at that and have decided to modify what is now clause 191, as well as the other relevant provisions.
The amendments essentially do two things. First, they remove the reference to legal proceedings in the relevant provisions, because the law provides clients with LPP protection in certain circumstances outside of legal proceedings. Secondly, they expand the reference to communication, because again the law provides clients with LPP protection in certain circumstances, regarding not only communications but documents, material or other information.
Therefore the amendments ensure LPP protection for the clients of ABS firms, so that firms do not operate at a competitive disadvantage compared with other types of provider. They essentially modify five earlier provisions about LPP. Those provisions ensure protection for the clients of other legal service providers, licensed conveyancers, bodies recognised by the Council for Licensed Conveyancers, bodies recognised by the Law Society, patent attorneys, trade mark attorneys and certain authorised practitioners under the Courts and Legal Services Act 1990.
Together the amendments ensure that clients of all of those providers have the LPP protection equivalent to the clients of solicitors. That means that both types of clients are equally protected, no matter where they go for legal services, and no type of provider will get a competitive advantage over other providers as a result.
The hon. Member for North Southwark and Bermondsey asked about consultation. We have consulted not only the legal professions but the consumer organisations, too. I express particular thanks to both the Bar Council and the Law Society. I suspect that most people would say that that would be an unusual thing for me to do, but in this instance they have been extremely helpful. The Bar Council even went so far as to provide opinion from a legal expert on the subject, which was shared with us, and that opinion informed our reconsideration of the amendments. The Law Society has also provided valuable input. It is a good example of how a co-operative approach can achieve the desired result, for which I am grateful to them all.
8.45 pm
Simon Hughes: Thank you, as always, Sir Nicholas, for conducting what is not the most easy stage of our proceedings in such an extremely professional manner.
Everyone will be reassured by what the Minister said in response to my general point about the amendments. People will be reassured that the Minister has the confidence of both key professional bodies and others who were consulted, who all signed up and came to an agreement. Changing the small print can sometimes conceal a multitude of unexpected consequences, but if all those brains and interests have come together to say that the proposal is wonderful, who are we to presume otherwise?
Amendment agreed to.
Bridget Prentice: I beg to move amendment No. 324, in schedule 16, page 281, line 40, leave out ‘and’ and insert—
‘( ) in that subsection for “officers” substitute “managers”, and’.
The Chairman: With this it will be convenient to discuss Government amendment No. 325.
Bridget Prentice: These amendments are even more straightforward than the previous ones. They replace references in the Courts and Legal Services Act 1990 to “officers” of recognised bodies with “managers” of recognised bodies, ensuring consistency with previous amendments to the Administration of Justice Act 1985. The hon. Member for North Southwark and Bermondsey will be pleased that at least the terminology used in relation to Law Society regulated practices is consistent in those two Acts.
Amendment agreed to.
Amendment made: No. 325, in schedule 16, page 281, line 46, at end insert ‘and
( ) in subsection (9), after the definition of “foreign lawyer” insert—
““manager”, in relation to a body, has the same meaning as in the Legal Services Act 2007 (see section 208 of that Act);”.’.—[Bridget Prentice.]
Schedule 16, as amended, agreed to.
Simon Hughes: On a point of order, Sir Nicholas. I want to ask one or two brief questions about clauses 182, 192, 194, 195 and 198, to which there are no amendments. I hope that that is helpful to the Committee.
The Chairman: I have asked the Clerk to make a note of that request.
Clauses 179 to 181 ordered to stand part of the Bill.
 
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