Legal Services Bill [HL]

House of Lords

Session 2006 - 07
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Other Bills before Parliament

Legal Services Bill [HL]

Legal Services Bill [HL]
Part 1 — The regulatory objectives
1

A
Bill
To
Make provision for the establishment of the Legal Services Board and in
respect of its functions; to make provision for, and in connection with, the
regulation of persons who carry on certain legal activities; to make provision
for the establishment of the Office for Legal Complaints and for a scheme to
consider and determine legal complaints; to make provision about claims
management services and about immigration advice and immigration
services; to make provision in respect of legal representation provided free of
charge; to make provision about the application of the Legal Profession and
Legal Aid (Scotland) Act 2006; to make provision about the Scottish legal
services ombudsman; and for connected purposes.
Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—
Part 1
The regulatory objectives
1
The regulatory objectives
(1)
In this Act a reference to “the regulatory objectives” is a reference to the
objectives of—
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(a)
supporting the constitutional principle of the rule of law;
(b)
improving access to justice;
(c)
protecting and promoting the interests of consumers;
(d)
promoting competition in the provision of services within subsection
(2);
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(e)
encouraging an independent, strong, diverse and effective legal
profession;
(f)
increasing public understanding of the citizen’s legal rights and duties;
(g)
promoting and maintaining adherence to the professional principles.

HL Bill 9 54/2

Legal Services Bill [HL]
Part 2 — The Legal Services Board
2

(2)
The services within this subsection are services such as are provided by
authorised persons (including services which do not involve the carrying on of
activities which are reserved legal activities).
(3)
The “professional principles” are—
(a)
that authorised persons should act with independence and integrity,
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(b)
that authorised persons should maintain proper standards of work,
(c)
that authorised persons should act in the best interests of their clients,
(d)
that persons who exercise before any court a right of audience, or
conduct litigation in relation to proceedings in any court, by virtue of
being authorised persons should comply with their duty to the court to
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act with independence in the interests of justice, and
(e)
that the affairs of clients should be kept confidential.
(4)
In this section “authorised persons” means authorised persons in relation to
activities which are reserved legal activities.
Part 2
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The Legal Services Board
Constitution
2
The Legal Services Board
(1)
There is to be a body corporate called the Legal Services Board (“the Board”).
(2)
Schedule 1 is about the Board.
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General functions
3
The Board’s duty to promote the regulatory objectives etc
(1)
In discharging its functions the Board must comply with the requirements of
this section.
(2)
The Board must, so far as is reasonably practicable, act in a way—
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(a)
which is compatible with the regulatory objectives, and
(b)
which the Board considers most appropriate for the purpose of meeting
those objectives.
(3)
The Board must have regard to—
(a)
the principles under which regulatory activities should be transparent,
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accountable, proportionate, consistent and targeted only at cases in
which action is needed,
(b)
any other principle appearing to it to represent the best regulatory
practice, and
(c)
the public interest.
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4
Standards of regulation, education and training
The Board must assist in the maintenance and development of standards in
relation to—

Legal Services Bill [HL]
Part 2 — The Legal Services Board
3

(a)
the regulation by approved regulators of persons authorised by them
to carry on activities which are reserved legal activities, and
(b)
the education and training of persons so authorised.
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Corporate governance
In managing its affairs, the Board must have regard to such generally accepted
5
principles of good corporate governance as it is reasonable to regard as
applicable to it.
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Annual report
(1)
The Board must prepare a report (“the annual report”) for each financial year.
(2)
The annual report must deal with—
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(a)
the discharge of the Board’s functions,
(b)
the extent to which, in the Board’s opinion, the Board has met the
regulatory objectives, and
(c)
such other matters as the Secretary of State may from time to time
direct.
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(3)
As soon as reasonably practicable after the end of each financial year, the Board
must give the Secretary of State a copy of the annual report prepared for that
year.
(4)
The Secretary of State must lay a copy of the annual report before Parliament.
(5)
In this section “financial year” means—
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(a)
the period beginning with the day on which the Board is established
and ending with the next following 31 March, and
(b)
each successive period of 12 months.
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Supplementary powers
The Board may do anything calculated to facilitate, or incidental or conducive
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to, the carrying out of any of its functions.
Consumer Panel
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The Consumer Panel
(1)
The Board must establish and maintain a panel of persons (to be known as “the
Consumer Panel”) to represent the interests of consumers.
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(2)
The Board must appoint to the Consumer Panel such consumers, or persons
representing the interests of consumers, as the Board considers appropriate.
(3)
The Board must appoint one of the members of the Consumer Panel to be the
chairman of the Panel.
(4)
The Board must secure that the membership of the Consumer Panel is such as
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to give a fair degree of representation to both—
(a)
those who are using (or are or may be contemplating using), in
connection with businesses carried on by them, services provided by

Legal Services Bill [HL]
Part 2 — The Legal Services Board
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persons who are authorised persons in relation to activities which are
reserved legal activities, and
(b)
those who are using (or are or may be contemplating using) such
services otherwise than in connection with businesses carried on by
them.
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(5)
The Consumer Panel must not include any person who is—
(a)
a member of the Board or of its staff;
(b)
a member of the Office for Legal Complaints (see Part 6), an
ombudsman appointed by it or a member of its staff appointed under
paragraph 11 of Schedule 15;
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(c)
a member of the governing body, or of the staff, of an approved
regulator;
(d)
an authorised person in relation to an activity which is a reserved legal
activity;
(e)
a person authorised, by a person designated under section 5(1) of the
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Compensation Act 2006 (c. 29), to provide services which are regulated
claims management services (within the meaning of that Act);
(f)
an advocate in Scotland;
(g)
a solicitor in Scotland;
(h)
a member of the Bar of Northern Ireland; or
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(i)
a solicitor of the Court of Judicature of Northern Ireland.
(6)
The chairman and other members of the Consumer Panel are to be—
(a)
appointed on terms and conditions determined by the Board, and
(b)
paid by the Board in accordance with provision made by or under the
terms of appointment.
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9
Committees and the procedure of the Consumer Panel
(1)
The Consumer Panel may make such arrangements as it thinks fit for
committees established by the Panel to give advice to the Panel about matters
relating to the carrying out of the Panel’s functions.
(2)
The Consumer Panel may make such other arrangements for regulating its
30
own procedure, and for regulating the procedure of the committees
established by it, as it thinks fit.
(3)
Those arrangements may include arrangements as to quorums and as to the
making of decisions by a majority.
(4)
The committees established by the Consumer Panel may include committees
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the membership of which includes persons who are not members of the Panel.
(5)
The membership of every committee established by the Consumer Panel must
contain at least one person who is a member of the Panel.
(6)
Where a person who is not a member of the Consumer Panel is a member of a
committee established by it, the Board may pay to that person such
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remuneration and expenses as the Board may determine.
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Representations by the Consumer Panel
(1)
The Board must consider any representations made to it by the Consumer
Panel.

Legal Services Bill [HL]
Part 3 — Reserved legal activities
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(2)
If the Board disagrees with a view expressed, or proposal made, in the
representations, it must give the Consumer Panel a notice to that effect stating
its reasons for disagreeing.
(3)
The Consumer Panel may publish such information as it thinks fit about any
representations made by it to the Board.
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(4)
Where the Consumer Panel publishes information about any representations
made by it, the Board must publish any notice it gives under subsection (3) in
respect of those representations.
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Advice and research functions of the Consumer Panel
(1)
The Consumer Panel may, at the request of the Board—
10
(a)
carry out research for the Board;
(b)
give advice to the Board.
(2)
The Board must consider any advice given and the results of any research
carried out under this section.
(3)
The Consumer Panel may publish such information as it thinks fit about advice
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it gives, and about the results of research carried out by it, under this section.
Part 3
Reserved legal activities
Reserved legal activities
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Meaning of “reserved legal activity” and “legal activity”
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(1)
In this Act “reserved legal activity” means—
(a)
the exercise of a right of audience;
(b)
the conduct of litigation;
(c)
reserved instrument activities;
(d)
probate activities;
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(e)
notarial activities;
(f)
the administration of oaths.
(2)
Schedule 2 makes provision about what constitutes each of those activities.
(3)
In this Act “legal activity” means—
(a)
an activity which is a reserved legal activity within the meaning of this
30
Act as originally enacted, and
(b)
any other activity which consists of one or both of the following—
(i)
the provision of legal advice or assistance in connection with the
application of the law or with any form of resolution of legal
disputes;
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(ii)
the provision of representation in connection with any matter
concerning the application of the law or any form of resolution
of legal disputes.
(4)
But “legal activity” does not include any activity of a judicial or quasi-judicial
nature (including acting as a mediator).
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Legal Services Bill [HL]
Part 3 — Reserved legal activities
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(5)
For the purposes of subsection (3) “legal dispute” includes a dispute as to any
matter of fact the resolution of which is relevant to determining the nature of
any person’s legal rights or liabilities.
(6)
Section 23 makes provision for adding legal activities to the reserved legal
activities.
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Carrying on the activities
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Entitlement to carry on a reserved legal activity
(1)
The question whether a person is entitled to carry on an activity which is a
reserved legal activity is to be determined solely in accordance with the
provisions of this Act.
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(2)
A person is entitled to carry on an activity (“the relevant activity”) which is a
reserved legal activity where—
(a)
the person is an authorised person in relation to the relevant activity, or
(b)
the person is an exempt person in relation to that activity.
(3)
Subsection (2) is subject to section 22 (transitional protection for non-
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commercial bodies).
Offences
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Offence to carry on a reserved legal activity if not entitled
(1)
It is an offence for a person to carry on an activity (“the relevant activity”)
which is a reserved legal activity unless that person is entitled to carry on the
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relevant activity.
(2)
In proceedings for an offence under subsection (1), it is a defence for the
accused to show that the accused did not know, and could not reasonably have
been expected to know, that the offence was being committed.
(3)
A person who is guilty of an offence under subsection (1) is liable—
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(a)
on summary conviction, to imprisonment for a term not exceeding 12
months or a fine not exceeding the statutory maximum (or both), and
(b)
on conviction on indictment, to imprisonment for a term not exceeding
2 years or a fine (or both).
(4)
A person who is guilty of an offence under subsection (1) by reason of an act
30
done in the purported exercise of a right of audience, or a right to conduct
litigation, in relation to any proceedings or contemplated proceedings is also
guilty of contempt of the court concerned and may be punished accordingly.
(5)
In relation to an offence under subsection (1) committed before the
commencement of section 154(1) of the Criminal Justice Act 2003 (c. 44), the
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reference in subsection (3)(a) to 12 months is to be read as a reference to 6
months.
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Carrying on of a reserved legal activity: employers and employees etc
(1)
This section applies for the interpretation of references in this Act to a person
carrying on an activity which is a reserved legal activity.
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Legal Services Bill [HL]
Part 3 — Reserved legal activities
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(2)
References to a person carrying on an activity which is a reserved legal activity
include a person (“E”) who—
(a)
is an employee of a body or other person (“B”), and
(b)
carries on the activity in E’s capacity as such an employee.
(3)
For the purposes of subsection (2), it is irrelevant whether B is entitled to carry
5
on the activity.
(4)
B does not carry on an activity which is a reserved legal activity by virtue of E
carrying it on in E’s capacity as an employee of B, unless the provision of
relevant services to the public or a section of the public (with or without a view
to profit) is part of B’s business.
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(5)
Relevant services are services which consist of or include reserved legal
activities carried on by employees of B in their capacity as employees of B.
(6)
The Secretary of State may by order make provision about—
(a)
what does or does not constitute a section of the public;
(b)
the circumstances in which the provision of relevant services to the
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public or a section of the public does or does not form part of B’s
business.
(7)
The Secretary of State may make an order under subsection (6) only on the
recommendation of the Board.
(8)
If B is a body, references to an employee of B include references to a manager
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of B.
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Offence to pretend to be entitled
(1)
It is an offence for a person—
(a)
wilfully to pretend to be entitled to carry on any activity which is a
reserved legal activity when that person is not so entitled, or
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(b)
with the intention of implying falsely that that person is so entitled, to
take or use any name, title or description.
(2)
A person who is guilty of an offence under subsection (1) is liable—
(a)
on summary conviction, to imprisonment for a term not exceeding 12
months or a fine not exceeding the statutory maximum (or both), and
30
(b)
on conviction on indictment, to imprisonment for a term not exceeding
2 years or a fine (or both).
(3)
In relation to an offence under subsection (1) committed before the
commencement of section 154(1) of the Criminal Justice Act 2003 (c. 44), the
reference in subsection (2)(a) to 12 months is to be read as a reference to 6
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months.
Interpretation
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Authorised persons
(1)
For the purposes of this Act “authorised person”, in relation to an activity (“the
relevant activity”) which is a reserved legal activity, means —
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