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 4 — Regulation of approved regulators
22

(10)
The Board must make rules as to the persons a specified person may appoint
for the purposes of subsection (3).
42
Intervention directions: enforcement
(1)
If at any time it appears to the Board that an approved regulator has failed to
comply with an obligation imposed on it by, or by virtue of, an intervention
5
direction or section 41(2), the Board may make an application to the High
Court under this section.
(2)
If, on an application under subsection (1), the High Court decides that the
approved regulator has failed to comply with the obligation in question, it may
order the approved regulator to take such steps as the High Court directs for
10
securing that the obligation is complied with.
(3)
This section is without prejudice to any other powers conferred on the Board
by this Part.
43
Revocation of intervention directions
(1)
An intervention direction has effect until such time as it is revoked by the
15
Board (whether on the application of the approved regulator or otherwise).
(2)
Part 2 of Schedule 8 makes provision about the procedure which must be
complied with before an intervention direction is revoked and the manner in
which notice of the revocation is to be given.
Cancellation of approval
20
44
Cancellation of designation as approved regulator
(1)
The Secretary of State may by order cancel a body’s designation as an
approved regulator—
(a)
in relation to all the reserved legal activities in relation to which it is an
approved regulator, or
25
(b)
in relation to one or more, but not all, of those reserved legal activities,

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

Legal Services Bill [HL]
Part 4 — Regulation of approved regulators
23

(4)
In this section “the prescribed fee”, in relation to an application, means the fee
specified in, or determined in accordance with, rules made by the Board, with
the consent of the Secretary of State.
(5)
The Board may recommend that an order is made cancelling a body’s
designation as an approved regulator in relation to one or more reserved legal
5
activities if it is satisfied—
(a)
that an act or omission of an approved regulator (or a series of such acts
or omissions) has had, or is likely to have, an adverse impact on one or
more of the regulatory objectives, and
(b)
that, in all the circumstances of the case, it is appropriate to cancel the
10
body’s designation in relation to the activity or activities in question.
(6)
The Board may not determine that it is appropriate to cancel a body’s
designation in relation to an activity or activities unless it is satisfied that the
matter cannot be adequately addressed by the Board exercising the powers
available to it under sections 30 to 42.
15
(7)
Schedule 9 makes further provision about the making of recommendations
under subsection (5).
(8)
If the Secretary of State decides not to make an order in response to a
recommendation made under subsection (3) or (5), the Secretary of State must
give the Board notice of the decision and the reasons for it.
20
(9)
The Secretary of State must publish a notice given under subsection (8).
(10)
The Board may not make a recommendation under subsection (5) in respect of
a body’s designation as an approved regulator in relation to a reserved legal
activity at any time when, by virtue of Part 2 of Schedule 5 (protection of rights
during a transitional period), any person is being treated as authorised by the
25
body to carry on that activity.
45
Cancellation of designation: further provision
(1)
This section applies where a body (“the former regulator”) has its designation
in relation to one or more reserved legal activities cancelled by an order under
section 44.
30
(2)
The Secretary of State may by order make—
(a)
such modifications of provisions made by or under any enactment
(including this Act or any enactment passed after this Act), prerogative
instrument or other instrument or document, and
(b)
such transitional or consequential provision,
35

as the Secretary of State considers necessary or expedient in consequence of the
cancellation.
(3)
The Secretary of State may, by order, make transfer arrangements.
(4)
“Transfer arrangements” are arrangements in accordance with which each
person authorised by the former regulator who consents to the arrangements
40
is, from the time the cancellation takes effect, treated as being authorised to
carry on each protected activity by either—
(a)
a relevant approved regulator, in relation to the protected activity, who
consents to the transfer arrangements, or

Legal Services Bill [HL]
Part 4 — Regulation of approved regulators
24

(b)
the Board acting in its capacity as a relevant approved regulator in
relation to the protected activity by virtue of an order made under
section 61.
(5)
The transfer arrangements—
(a)
must make such provision as is necessary to ensure that, where a
5
person is treated under those arrangements as being authorised to
carry on a protected activity by the new regulator, that person is subject
to the regulatory arrangements of the new regulator;
(b)
may make provision requiring amounts held by the former regulator
which represent amounts paid to it by way of practising fees by the
10
persons to whom the transfer arrangements apply (or a part of the
amounts so held) to be paid to the new regulator and treated as if they
were amounts paid by those persons by way of practising fees to the
new regulator.
(6)
Subsection (5)(a) is subject to any transitional provision which may be made by
15
the transfer arrangements, including provision modifying the regulatory
arrangements of the new regulator as they apply to persons to whom the
transfer arrangements apply.
(7)
The Secretary of State may make an order under this section only if—
(a)
the Board has made a recommendation in accordance with section 46,
20
and
(b)
the order is in the same form as, or in a form which is not materially
different from, the draft order annexed to that recommendation.
(8)
For the purposes of this section—
(a)
a person is “authorised by the former regulator” if immediately before
25
the time the cancellation takes effect the person is authorised by the
former regulator (other than by virtue of a licence under Part 5) to carry
on an activity which is a reserved legal activity to which the
cancellation relates, and
(b)
in relation to that person—
30
(i)
the activity which that person is authorised to carry on as
mentioned in paragraph (a) is a “protected activity”, and
(ii)
“the new regulator” means the approved regulator within
paragraph (a) or (b) of subsection (4).
(9)
In this section “practising fee”, in relation to an approved regulator, means a
35
fee payable by a person under the approved regulator’s regulatory
arrangements in circumstances where the payment of the fee is a condition
which must be satisfied for that person to be authorised by the approved
regulator to carry on one or more activities which are reserved legal activities.
(10)
But for the purposes of this section “practising fee” does not include a fee
40
payable by a licensed body to its licensing authority under licensing rules.
46
The Board’s power to recommend orders made under section 45
(1)
The Board may recommend to the Secretary of State that the Secretary of State
make an order under section 45 in the form of a draft order prepared by the
Board and annexed to the recommendation.
45
(2)
Before making a recommendation under this section, the Board must publish a
draft of—

Legal Services Bill [HL]
Part 4 — Regulation of approved regulators
25

(a)
the proposed recommendation, and
(b)
the proposed draft order.
(3)
The draft must be accompanied by a notice which states that representations
about the proposals may be made to the Board within a specified period.
(4)
Before making the recommendation, the Board must have regard to any
5
representations duly made.
(5)
If the draft order to be annexed to the recommendation differs from the draft
published under subsection (2)(b) in a way which in the opinion of the Board
is material, the Board must, before making the recommendation, publish the
draft order along with a statement detailing the changes made and the reasons
10
for those changes.
47
Cancellation of designation: powers of entry etc
(1)
This section applies where a body (“the former regulator”) has its designation
in relation to one or more reserved legal activities cancelled by an order under
section 44.
15
(2)
The Board may request the former regulator to provide assistance to the new
regulator and the Board, for the purpose of continuing regulation.
(3)
On an application by a person appointed by the Board to act on its behalf, a
judge of the High Court, Circuit judge or justice of the peace may issue a
warrant authorising that person to—
20
(a)
enter and search the premises of the former regulator, and
(b)
take possession of any written or electronic records found on the
premises.
(4)
A person so authorised may, for the purpose of continuing regulation, take
copies of written or electronic records found on a search carried out by virtue
25
of the warrant.
(5)
The judge or justice of the peace may not issue the warrant unless satisfied that
its issue is necessary or desirable for the purpose of continuing regulation.
(6)
The Secretary of State must make regulations—
(a)
specifying further matters which a judge or justice of the peace must be
30
satisfied of, or matters which a judge or justice of the peace must have
regard to, before issuing a warrant, and
(b)
regulating the exercise of a power conferred by a warrant issued under
subsection (3) or by subsection (4) (whether by restricting the
circumstances in which a power may be exercised, by specifying
35
conditions to be complied with in the exercise of a power, or otherwise).
(7)
Regulations under subsection (6)(b) must in particular make provision as to
circumstances in which written or electronic records of which a person has
taken possession by virtue of a warrant issued under subsection (3) may be
copied or must be returned.
40
(8)
But the Secretary of State may not make regulations under subsection (6)
unless—
(a)
they are made in accordance with a recommendation made by the
Board, or

Legal Services Bill [HL]
Part 4 — Regulation of approved regulators
26

(b)
the Secretary of State has consulted the Board about the making of the
regulations.
(9)
The Board must make rules as to the persons it may appoint for the purposes
of subsection (3).
(10)
For the purposes of this section—
5
“authorised by the former regulator”, “protected activity” and “new
regulator” have the same meaning as for the purposes of section 45;
“the purpose of continuing regulation” means the purpose of enabling
persons authorised by the former regulator to continue to be authorised
and regulated in relation to the protected activity.
10
Policy statements
48
The Board’s policy statements
(1)
The Board must prepare and issue a statement of policy with respect to the
exercise of its functions under—
(a)
section 30 (performance targets and monitoring);
15
(b)
section 31 (directions);
(c)
section 34 (public censure);
(d)
section 36 (financial penalties);
(e)
sections 40 (intervention directions);
(f)
section 44 (cancellation of designation as approved regulator);
20
(g)
section 75 (cancellation of designation as licensing authority by order).
(2)
The Board may prepare and issue a statement of policy with respect to any
other matter.
(3)
The Board’s policy in determining what the amount of a penalty under section
36 should be must include having regard to—
25
(a)
the seriousness of the act or omission (or series of acts or omissions) in
question, and
(b)
the extent to which it was deliberate or reckless.
(4)
The Board may at any time alter or replace any statement issued under this
section.
30
(5)
If a statement is altered or replaced, the Board must issue the altered or
replacement statement.
(6)
In exercising or deciding whether to exercise any of its functions, the Board
must have regard to any relevant policy statement published under this
section.
35
(7)
The Board must publish a statement issued under this section.
(8)
The Board may make a reasonable charge for providing a person with a copy
of a statement.
49
Policy statements: procedure
(1)
Before issuing a statement under section 48, the Board must publish a draft of
40
the proposed statement.

Legal Services Bill [HL]
Part 4 — Regulation of approved regulators
27

(2)
The draft must be accompanied by a notice which states that representations
about the proposals may be made to the Board within a specified period.
(3)
Before issuing the statement, the Board must have regard to any
representations duly made.
(4)
If the statement differs from the draft published under subsection (1) in a way
5
which is, in the opinion of the Board, material, the Board must publish details
of the differences.
(5)
The Board may make a reasonable charge for providing a person with a copy
of a draft published under subsection (1).
Practising fees
10
50
Control of practising fees charged by approved regulators
(1)
In this section “practising fee”, in relation to an approved regulator, means a
fee payable by a person under the approved regulator’s regulatory
arrangements in circumstances where the payment of the fee is a condition
which must be satisfied for that person to be authorised by the approved
15
regulator to carry on one or more activities which are reserved legal activities.
(2)
An approved regulator may only apply amounts raised by practising fees for
one or more of the permitted purposes.
(3)
The Board must make rules specifying the permitted purposes.
(4)
Those rules must, in particular, provide that the following are permitted
20
purposes—
(a)
the regulation, accreditation, education and training of relevant
authorised persons and those wishing to become such persons,
including—
(i)
the maintaining and raising of their professional standards, and
25
(ii)
the giving of practical support, and advice about practice
management, in relation to practices carried on by such
persons;
(b)
the payment of a levy imposed on the approved regulator under
section 166;
30
(c)
the participation by the approved regulator in law reform and the
legislative process;
(d)
the provision by relevant authorised persons, and those wishing to
become relevant authorised persons, of reserved legal services,
immigration advice or immigration services to the public free of charge;
35
(e)
the promotion of the protection by law of human rights and
fundamental freedoms;
(f)
the promotion of relations between the approved regulator and
relevant national or international bodies, governments or the legal
professions of other jurisdictions.
40
(5)
A practising fee is payable under the regulatory arrangements of an approved
regulator only if the Board has approved the level of the fee.
(6)
The Board must make rules containing provision—

Legal Services Bill [HL]
Part 4 — Regulation of approved regulators
28

(a)
about the form and manner in which applications for approval for the
purposes of subsection (5) must be made and the material which must
accompany such applications;
(b)
requiring applicants to have consulted such persons as may be
prescribed by the rules in such manner as may be so prescribed before
5
such an application is made;
(c)
about the procedures and criteria that will be applied by the Board
when determining whether to approve the level of a fee for the
purposes of subsection (5).
(7)
Rules under subsection (6)(c) must, in particular, contain—
10
(a)
provision requiring the Board, before it determines an application for
approval of the level of a fee, to consult such persons as it considers
appropriate about the impact of the proposed fee on persons providing
non-commercial legal services;
(b)
provision about the time limit for the determining of an application.
15
(8)
In this section “relevant authorised persons”, in relation to an approved
regulator, means persons who are authorised by the approved regulator to
carry on activities which are reserved legal activities.
Regulatory conflict
51
Regulatory conflict with approved regulators
20
(1)
The regulatory arrangements of an approved regulator must make such
provision as is reasonably practicable to prevent regulatory conflicts.
(2)
For the purposes of this section and section 52, a regulatory conflict is a conflict
between—
(a)
a requirement of the approved regulator’s regulatory arrangements,
25
and
(b)
a requirement of the regulatory arrangements of another approved
regulator.
(3)
Subsection (4) applies where a body is authorised by an approved regulator
(“the entity regulator”) to carry on an activity which is a reserved legal activity.
30
(4)
If a conflict arises between—
(a)
a requirement of the regulatory arrangements of the entity regulator, in
relation to the body authorised by the entity regulator or an employee
or manager of the body (“an entity requirement”), and
(b)
a requirement of the regulatory arrangements of another approved
35
regulator in relation to an employee or manager of the body who is
authorised by it to carry on a reserved legal activity (“an individual
requirement”),

the entity requirement prevails over the individual requirement.
52
Modification of provision made about regulatory conflict
40
(1)
An approved regulator (“the applicant regulator”) may make an application
under this section if it considers that the regulatory arrangements of another
approved regulator (“the conflicting regulator”) do not make appropriate
provision to prevent a regulatory conflict with the applicant regulator.