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Legal Services Bill [HL]


Legal Services Bill [HL]
Schedule 11 — Licensing rules
Part 1 — Licensing procedure

173

 

Schedule 11

Section 81

 

Licensing rules

Part 1

Licensing procedure

Applications for licences

5

1     (1)  

Licensing rules must make provision about the form and manner in which

applications for licences are to be made, and the fee which is to accompany

an application.

      (2)  

They may make provision about—

(a)   

the information which applications must contain, and

10

(b)   

the documents which must accompany applications.

Determination of applications

2     (1)  

Licensing rules must make the following provision about the determination

of applications for licences.

      (2)  

Before the end of the decision period the licensing authority must—

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(a)   

decide the application,

(b)   

notify the applicant of its decision, and

(c)   

if it decides to refuse the application, set out in the notice the reasons

for the refusal.

      (3)  

The decision period is the period of 6 months beginning with the day on

20

which the application is made to the licensing authority.

      (4)  

The licensing authority may, on one or more occasions, give the applicant a

notice (an “extension notice”) extending the decision period by a period

specified in the notice.

      (5)  

But—

25

(a)   

an extension notice may only be given before the time when the

decision period would end, but for the extension notice, and

(b)   

the total decision period must not exceed 9 months.

      (6)  

An extension notice must set out the reasons for the extension.

Review of determination

30

3          

Licensing rules must make provision for review by the licensing authority

of—

(a)   

a decision to refuse an application for a licence;

(b)   

if a licence is granted, the terms of the licence.

Period of licence and renewal

35

4     (1)  

The licensing rules may make provision—

 

 

Legal Services Bill [HL]
Schedule 11 — Licensing rules
Part 1 — Licensing procedure

174

 

(a)   

limiting the period for which any licence is (subject to the provision

of this Part of this Schedule and of the licensing rules) to remain in

force;

(b)   

about the renewal of licences, including provision about the form

and manner in which an application for the renewal is to be made,

5

and the fee which is to accompany an application.

      (2)  

The licensing rules may make provision about—

(a)   

the information which applications for renewal must contain, and

(b)   

the documents which must accompany applications.

      (3)  

Licensing rules must provide that a licence issued to a licensed body by the

10

licensing authority ceases to have effect if the licensed body is issued with a

licence by another licensing authority.

Continuity of licences

5     (1)  

Licensing rules may make provision about the effect, on a licence issued to

a partnership or other unincorporated body (“the existing body”), of any

15

change in the membership of the existing body.

      (2)  

The provision which may be made includes provision for the existing body’s

licence to be transferred where the existing body ceases to exist and another

body succeeds to the whole or substantially the whole of its business.

Modification of licences

20

6     (1)  

Licensing rules must make provision about the form and manner in which

applications are to be made for modification of the terms of a licence under

section 84, and the fee which is to accompany the application.

      (2)  

They may make provision as to the circumstances in which the licensing

authority may modify the terms of a licence under section 84 without an

25

application being made.

      (3)  

They must make provision for review by the licensing authority of—

(a)   

a decision to refuse an application for modification of the terms of a

licence;

(b)   

if the licensing authority makes licensing rules under sub-paragraph

30

(2), a decision under those rules to modify the terms of a licence.

Modifications under section 104 or 105

7     (1)  

Licensing rules must make provision about the form and manner in which

applications are to be made under section 104 or 105, and the fee which is to

accompany the application.

35

      (2)  

They may make provision as to the matters to which the licensing authority

must have regard in determining whether to make an order under section

104, or to revoke or modify such an order.

      (3)  

They must make provision for review by the licensing authority of—

(a)   

a decision to refuse an application under those sections;

40

(b)   

the terms of any order made under section 104 or any decision under

section 105.

 

 

Legal Services Bill [HL]
Schedule 11 — Licensing rules
Part 2 — Structural requirements

175

 

8     (1)  

Licensing rules must make the following provision in relation to licensed

bodies to which section 104 applies (“special bodies”), and in relation to

which an order under section 104 has been made.

      (2)  

If a special body becomes a special body of a different kind, it must notify

the licensing authority of that fact before the end of the relevant period.

5

      (3)  

If a special body ceases to be a special body, it must notify the licensing

authority of that fact before the end of the relevant period.

      (4)  

The relevant period is the period of 30 days (or such longer period as may be

specified in licensing rules) beginning with the day on which the body first

became a special body of a different kind, or ceased to be a special body.

10

      (5)  

Licensing rules may make provision requiring a special body to provide the

licensing authority with such information relevant to the matters mentioned

in section 104(5) as may be specified in the licensing rules.

Part 2

Structural requirements

15

Management

9     (1)  

Licensing rules must require a licensed body to comply with the following

requirement at all times.

      (2)  

At least one of the licensed body’s managers must be an individual who is

an authorised person in relation to a licensed activity.

20

      (3)  

No manager of the licensed body may be a person who under this Part of this

Act is disqualified from acting as a manager of a licensed body.

10    (1)  

Licensing rules may make further provision as to—

(a)   

the managers of licensed bodies, and

(b)   

the arrangements for the management by them of the licensed body

25

and its activities.

      (2)  

They must not require all the managers of a licensed body to be authorised

persons in relation to a reserved legal activity.

Head of Legal Practice

11    (1)  

Licensing rules must include the following requirements.

30

      (2)  

A licensed body must at all times have an individual—

(a)   

who is designated as Head of Legal Practice, and

(b)   

whose designation is approved by the licensing authority.

      (3)  

A designation of an individual as Head of Legal Practice has effect only

while the individual—

35

(a)   

consents to the designation,

(b)   

is an authorised person in relation to one or more of the licensed

activities, and

(c)   

is not under this Part of this Act disqualified from acting as Head of

Legal Practice of a licensed body.

40

 

 

Legal Services Bill [HL]
Schedule 11 — Licensing rules
Part 2 — Structural requirements

176

 

      (4)  

The licensing authority may approve a person’s designation only if it is

satisfied that the person is a fit and proper person to carry out the duties

imposed by section 89 in relation to that body.

      (5)  

The licensing authority may approve a person’s designation in the course of

determining an application for a licence under section 82.

5

      (6)  

If the licensing authority is satisfied that the person designated as a licensed

body’s Head of Legal Practice has breached a duty imposed by section 89, it

may withdraw its approval of that person’s designation.

12    (1)  

Licensing rules must make provision about—

(a)   

the procedures and criteria that will be applied by the licensing

10

authority when determining under paragraph 11(4) whether an

individual is a fit and proper person;

(b)   

the procedures and criteria that will be applied by the licensing

authority in determining under paragraph 11(6) whether to

withdraw its approval;

15

(c)   

the procedure which is to apply where a licensed body ceases to

comply with the requirement imposed by virtue of paragraph 11(2).

      (2)  

Rules made in accordance with sub-paragraph (1)(c) may in particular

provide that the requirement imposed by virtue of paragraph 11(2) is

suspended until such time as may be specified by the licensing authority if

20

the licensed body complies with such other requirements as may be

specified in the rules.

Head of Finance and Administration

13    (1)  

Licensing rules must include the following requirements.

      (2)  

A licensed body must at all times have an individual—

25

(a)   

who is designated as Head of Finance and Administration, and

(b)   

whose designation is approved by the licensing authority.

      (3)  

A designation of an individual as Head of Finance and Administration has

effect only while the individual—

(a)   

consents to the designation, and

30

(b)   

is not under this Part of this Act disqualified from acting as Head of

Finance and Administration of a licensed body.

      (4)  

The licensing authority may approve a person’s designation only if it is

satisfied that the person is a fit and proper person to carry out the duties

imposed by section 90 in relation to that body.

35

      (5)  

The licensing authority may approve a person’s designation in the course of

determining an application for a licence under section 82.

      (6)  

If the licensing authority is satisfied that the person designated as a licensed

body’s Head of Finance and Administration has breached a duty imposed

by section 90, it may withdraw its approval of that person’s designation.

40

14    (1)  

Licensing rules must make provision about—

(a)   

the procedures and criteria that will be applied by the licensing

authority when determining under paragraph 13(4) whether an

individual is a fit and proper person;

 

 

Legal Services Bill [HL]
Schedule 11 — Licensing rules
Part 3 — Practice requirements

177

 

(b)   

the procedures and criteria that will be applied by the licensing

authority in determining under paragraph 13(6) whether to

withdraw its approval;

(c)   

the procedure which is to apply where a licensed body ceases to

comply with the requirement imposed by virtue of paragraph 13(2).

5

      (2)  

The rules made in accordance with sub-paragraph (1)(c) may in particular

provide that the requirement imposed by virtue of sub-paragraph 13(2) is

suspended until such time as may be specified by the licensing authority if

the licensed body complies with such other requirements as may be

specified in the rules.

10

Part 3

Practice requirements

Practising address

15    (1)  

Licensing rules must require a licensed body, other than one to which sub-

paragraph (3) applies, at all times to have a practising address in England

15

and Wales.

      (2)  

For this purpose “practising address”, in relation to a licensed body, means

an address from which the body provides services which consist of or

include the carrying on of reserved legal activities.

      (3)  

This sub-paragraph applies to a licensed body—

20

(a)   

which is a company or limited liability partnership, and

(b)   

the registered office of which is situated in England and Wales (or in

Wales).

Licensed activities

16         

Licensing rules must provide that a licensed body may carry on a licensed

25

activity only through a person who is entitled to carry on the activity.

Compliance with regulatory arrangements etc

17    (1)  

Licensing rules must include the following provision.

      (2)  

A licensed body must at all times have suitable arrangements in place to

ensure that—

30

(a)   

it, and its managers and employees, comply with the duties imposed

by section 169, and

(b)   

it, and any person to whom sub-paragraph (3) applies, maintain the

professional principles set out in section 1(3).

      (3)  

This sub-paragraph applies to any manager or employee of the licensed

35

body who is an authorised person in relation to an activity which is a

reserved legal activity.

      (4)  

A licensed body must at all times have suitable arrangements in place to

ensure that non-authorised persons subject to the duty imposed by section

88 in relation to the licensed body comply with that duty.

40

      (5)  

Licensing rules may make provision as to the arrangements which are

suitable for the purposes of rules made under sub-paragraphs (2) and (4).

 

 

Legal Services Bill [HL]
Schedule 11 — Licensing rules
Part 4 — Regulation

178

 

Disqualified employees

18    (1)  

Licensing rules must include the following requirement.

      (2)  

A licensed body may not employ a person who under this Part of this Act is

disqualified from being an employee of a licensed body.

Indemnification arrangements and compensation arrangements

5

19    (1)  

For the purpose of giving effect to indemnification arrangements and

compensation arrangements, licensing rules may—

(a)   

authorise or require the licensing authority to establish and maintain

a fund or funds;

(b)   

authorise or require the licensing authority to take out and maintain

10

insurance with authorised insurers;

(c)   

require licensed bodies or licensed bodies of any specific description

to take out and maintain insurance with authorised insurers.

      (2)  

In this paragraph “authorised insurer” has the same meaning as in section

63.

15

Accounts

20    (1)  

The licensing rules must make provision as to the treatment of money within

sub-paragraph (2), and the keeping of accounts in respect of such money.

      (2)  

The money referred to in sub-paragraph (1) is money (including money held

on trust) which is received, held or dealt with by the licensed body, its

20

managers and employees for clients or other persons.

Part 4

Regulation

Fees

21    (1)  

The licensing rules must require licensed bodies to pay periodical fees to the

25

licensing authority.

      (2)  

The rules may provide for the payment of different fees by different

descriptions of licensed body.

Financial penalties

22         

The licensing rules must make provision as to—

30

(a)   

the acts and omissions in respect of which the licensing authority

may impose a penalty under section 93, and

(b)   

the criteria and procedure to be applied by the licensing authority in

determining whether to impose a penalty under that section, and the

amount of any penalty.

35

Disqualifications

23    (1)  

Licensing rules must make provision as to the criteria and procedure to be

applied by the licensing authority in determining whether a person should

be disqualified under section 97.

 

 

Legal Services Bill [HL]
Schedule 11 — Licensing rules
Part 4 — Regulation

179

 

      (2)  

Licensing rules must make provision—

(a)   

for a review by the licensing authority of a determination by the

licensing authority that a person should be disqualified;

(b)   

as to the criteria and procedure to be applied by the licensing

authority in determining whether a person’s disqualification should

5

cease to be in force;

(c)   

requiring the licensing authority to notify the Board of any

determination by the licensing authority that a person should be

disqualified, of the results of any review of that determination, and

of any decision by the licensing authority that a person’s

10

disqualification should cease to be in force.

Suspension or revocation of licence under section 99

24    (1)  

Licensing rules must make the following provision.

      (2)  

The licensing authority may suspend or revoke a licensed body’s licence

under section 99 in the following cases.

15

      (3)  

The first case is that the licensed body becomes a body which is not a

licensable body.

      (4)  

The second case is that the licensed body fails to comply with licensing rules

made under paragraph 16 (carrying on of licensed activities).

      (5)  

The third case is that—

20

(a)   

a non-authorised person holds a restricted interest in the licensed

body—

(i)   

as a result of the person taking a step in circumstances where

that constitutes an offence under paragraph 24(1) of Schedule

13 (whether or not the person is charged with or convicted of

25

an offence under that paragraph),

(ii)   

in breach of conditions imposed under paragraph 17, 28, or

33 of that Schedule, or

(iii)   

the person’s holding of which is subject to an objection by the

licensing authority under paragraph 31 or 36 of that

30

Schedule,

(b)   

if the relevant licensing rules make the provision mentioned in

paragraph 38(1)(a) of that Schedule, a non-authorised person has

under those rules an interest in shares in the body which exceeds the

share limit, or

35

(c)   

if the relevant licensing rules make the provision mentioned in

paragraph 38(1)(b) of that Schedule, the total proportion of shares in

the licensed body in which non-authorised persons have an interest

exceeds the limit specified in the rules.

      (6)  

The fourth case is that a non-authorised person subject to the duty in section

40

88 in relation to the licensed body fails to comply with that duty.

      (7)  

The fifth case is that the licensed body, or a manager or employee of the

licensed body, fails to comply with the duties imposed by section 169.

      (8)  

The sixth case is that—

(a)   

the licensed body fails to comply with licensing rules made under

45

paragraph 9(3) or 18 (prohibition on disqualified managers and

employees), and

 

 

 
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