House of Lords portcullis
House of Lords
Session 2006 - 07
Internet Publications
Other Bills before Parliament

Legal Services Bill [HL]


Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 2 — The Administration of Justice Act 1985 (c. 61)

255

 

98         

In paragraph 18 (powers of Tribunal with respect to recognised bodies)—

(a)   

in sub-paragraph (1) after “this Schedule” insert “(other than

paragraph 16(1A)”,

(b)   

in paragraph (b) of that sub-paragraph omit “section 34 of the 1974

Act or with”,

5

(c)   

omit paragraph (d) of that sub-paragraph and the “or” immediately

preceding it,

(d)   

in sub-paragraph (2) omit “not exceeding £3,000”, and

(e)   

omit sub-paragraphs (3) and (4).

99         

After that paragraph insert—

10

“18A  (1)  

Where, on the hearing of any complaint made to it under

paragraph 16(1A) of this Schedule, the Tribunal is satisfied that a

manager or employee of a recognised body—

(a)   

has been convicted as mentioned in paragraph (a) of

paragraph 16(1A),

15

(b)   

has failed to comply with any requirement imposed by or

by virtue of this Act or any rules applicable to the relevant

person by virtue of section 9 of this Act, or

(c)   

has acted as mentioned in paragraph (c) of paragraph

16A(1A),

20

           

the Tribunal may, if it thinks fit, make one or more of the orders

referred to in sub-paragraph (2).

      (2)  

Those orders are—

(a)   

an order directing the payment by the relevant person of a

penalty to be forfeited to Her Majesty;

25

(b)   

an order requiring the Society to consider taking such steps

as the Tribunal may specify in relation to the relevant

person;

(c)   

if the person is not a solicitor or a registered European

lawyer, an order which states one or more of the matters

30

mentioned in sub-paragraph (3);

(d)   

an order requiring the Society to refer to an appropriate

regulator any matter relating to the conduct of the relevant

person.

      (3)  

The matters referred to in sub-paragraph (2)(c) are—

35

(a)   

that as from the specified date—

(i)   

no solicitor or registered European lawyer shall

employ or remunerate, in connection with his

practice as a solicitor or registered European

lawyer, the person with the respect to whom the

40

order is made, and

(ii)   

no recognised body, or manager or employee of

such a body, shall employ or remunerate that

person, in connection with the business of the

recognised body,

45

   

except in accordance with a Society permission;

(b)   

that as from the specified date no recognised body shall,

except in accordance with a Society permission, permit the

 

 

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 2 — The Administration of Justice Act 1985 (c. 61)

256

 

person with respect to whom the order is made to be a

manager of the body;

(c)   

that as from the specified date no recognised body or

manager or employee of such a body shall, except in

accordance with a Society permission, permit the person

5

with respect to whom the order is made to have an interest

in the body.

      (4)  

Section 44(2) of the Act of 1974, paragraph 16(1)(d) and (1A)(d) of

this Schedule and paragraph 14(3A) of Schedule 14 to the Courts

and Legal Services Act 1990 apply in relation to an order under

10

sub-paragraph (2)(c) as they apply in relation to an order under

section 43(2) of that Act.

      (5)  

For the purposes of sub-paragraph (2)(d) an “appropriate

regulator” in relation to the relevant person means—

(a)   

if the person is an authorised person in relation to a

15

reserved legal activity for the purposes of the Legal

Services Act 2007, any relevant approved regulator (within

the meaning of that Act) in relation to that person, and

(b)   

if the person carries on activities which are not reserved

legal activities, any body which regulates the carrying on

20

of such activities by the person.”

100        

In paragraph 20 (powers of Tribunal in respect of legal aid complaints), in

sub-paragraph (1)—

(a)   

after “solicitor” in both places insert “or registered European

lawyer”,

25

(b)   

for “an officer” substitute “a manager”, and

(c)   

for “director” substitute “manager”.

101        

In paragraph 21 (revocation of recognition by reason of default by

director)—

(a)   

in sub-paragraph (1), in paragraph (a) for “director” substitute

30

“manager”,

(b)   

in paragraph (b) of that sub-paragraph for “director” (in both places)

substitute “manager”,

(c)   

in paragraph (c) of that sub-paragraph for “director” (in both places)

substitute “manager”,

35

(d)   

in sub-paragraph (3) for “director” (in both places) substitute

“manager”, and

(e)   

after that sub-paragraph insert—

    “(4)  

The reference in paragraph (c) of sub-paragraph (1) to a

person employed by a recognised body includes a

40

reference to a person who was so employed at the time of

the conduct leading to the making of the order referred to

in that paragraph.”

102        

After paragraph 22 insert—

“22A  (1)  

In section 56(5) of the 1974 Act (general principles for

45

determination of remuneration), the references to a solicitor are to

be construed as including, in relation to general principles relating

to the remuneration of recognised bodies, any authorised person

who is a manager or employee of a recognised body.

 

 

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 2 — The Administration of Justice Act 1985 (c. 61)

257

 

      (2)  

For this purpose “authorised person” means a person, other than

a solicitor, 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).”

103        

In paragraph 23 (orders as to remuneration for non-contentious business) in

5

paragraph (b) for “an officer” substitute “a manager (within the meaning of

Schedule 2 to the Administration of Justice Act 1985)”.

104        

In paragraph 24 (effect of contentious business agreements) for “officers”

substitute “managers”.

105        

In paragraph 25 (effect of supervening incapacity on contentious business

10

agreements)—

(a)   

in sub-paragraph (1)(b) after “corporate)” insert “or the body has

entered administration within the meaning of paragraph 1(2)(b) of

Schedule B1 to the Insolvency Act 1986”,

(b)   

in sub-paragraphs (2) and (3)—

15

(i)   

for “taxation” (in each place) substitute “assessment”, and

(ii)   

for “taxing officer” (in each place) substitute “costs officer”,

and

(c)   

in sub-paragraph (3) for “any officer” substitute “any manager”.

106        

In paragraph 26 (taxations with respect to contentious business)—

20

(a)   

in the paragraph heading for “Taxations” substitute “Assessments”,

(b)   

the existing paragraph becomes sub-paragraph (1) and in that sub-

paragraph —

(i)   

for “taxation” substitute “assessment”,

(ii)   

for “taxing officer” substitute “costs officer”, and

25

(iii)   

for “any solicitor, being an officer” substitute “any authorised

person, being a manager”, and

(c)   

after that sub-paragraph insert—

    “(2)  

In this paragraph “authorised person” means an

authorised person, in relation to an activity which is a

30

reserved legal activity, within the meaning of the Legal

Services Act 2007.”

107        

In paragraph 29 (actions to recover costs), in paragraph (a) for “any officer”

substitute “a manager”.

108        

In paragraph 31 (bank accounts) omit “or (2)”.

35

109        

After that paragraph insert—

“31A       

Where rules made under section 32(1) of the 1974 Act are applied

to managers or employees in accordance with section 9(2)(fb) of

this Act, section 85 of the 1974 Act shall apply in relation to a

manager or employee to which the rules are applied who keeps an

40

account with a bank in pursuance of any such rules as it applies in

relation to a solicitor who keeps such an account in pursuance of

rules under section 32.”

110   (1)  

Paragraph 32 (intervention by Society) is amended as follows.

      (2)  

In sub-paragraph (1)(a)—

45

(a)   

for “Council are” substitute “Society is”, and

 

 

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 2 — The Administration of Justice Act 1985 (c. 61)

258

 

(b)   

after “recognised body” insert “or a manager of such a body”.

      (3)  

For sub-paragraph (1)(c) substitute—

“(c)   

a relevant insolvency event occurs in relation to a

recognised body; or”.

      (4)  

In sub-paragraph (1)(d)—

5

(a)   

for “Council have” substitute “Society has”,

(b)   

for “officer” substitute “manager”, and

(c)   

for “that body’s” to the end substitute—

“(i)   

that body’s business,

(ii)   

any trust of which that body is or was a

10

trustee,

(iii)   

any trust of which the manager or

employee is or was a trustee in his capacity

as such a manager or employee, or

(iv)   

the business of another body in which the

15

manager or employee is or was a manager

or employee or the practice (or former

practice) of the manager or employee; or”.

      (5)  

After sub-paragraph (1)(d) insert—

“(e)   

the Society is satisfied that it is necessary to exercise the

20

powers conferred by Part 2 of Schedule 1 to the 1974 Act

(or any of them) in relation to a recognised body to

protect—

(i)   

the interests of clients (or former or potential

clients) of the recognised body,

25

(ii)   

the interests of the beneficiaries of any trust of

which the recognised body is or was a trustee, or

(iii)   

the interests of the beneficiaries of any trust of

which a person who is or was a manager or

employee of the recognised body is or was a trustee

30

in that person’s capacity as such a manager or

employee;”.

      (6)  

After sub-paragraph (1) insert—

   “(1A)  

For the purposes of this paragraph a relevant insolvency event

occurs in relation to a recognised body if—

35

(a)   

a resolution for a voluntary winding-up of the body is

passed without a declaration of solvency under section 89

of the Insolvency Act 1986;

(b)   

the body enters administration within the meaning of

paragraph 1(2)(b) of Schedule B1 to that Act;

40

(c)   

an administrative receiver within the meaning of section

251 of that Act is appointed;

(d)   

a meeting of creditors is held in relation to the body under

section 95 of that Act (creditors’ meeting which has the

effect of converting a members’ voluntary winding up into

45

a creditors’ voluntary winding up);

(e)   

an order for the winding up of the body is made.”

      (7)  

Omit sub-paragraph (2).

 

 

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 2 — The Administration of Justice Act 1985 (c. 61)

259

 

111        

For paragraph 33 (further grounds for intervention)—

(a)   

for paragraph (a) substitute—

“(a)   

the Society is satisfied that there has been undue

delay—

(i)   

on the part of a recognised body in

5

connection with any matter in which it is or

was acting on behalf of a client or with any

trust of which it is or was a trustee, or

(ii)   

on the part of a person who is or was a

manager or employee of a recognised body

10

in connection with any trust of which the

manager or employee is or was a trustee in

his capacity as such an employee or

trustee;”, and

(b)   

in paragraph (c) for “Council regard” substitute “Society regards”.

15

112        

In paragraph 34 (powers of intervention on revocation of recognition etc), in

subsection (1) omit “corporate” (in both places).

113        

In paragraph 35 (provision relating to the application of Part 2 of Schedule 1

to the Solicitors Act 1974)—

(a)   

in paragraph (a) omit “corporate”, and

20

(b)   

omit “and” at the end of paragraph (b) and after paragraph (c)

insert—

“(d)   

paragraph 6(2)(a) of that Schedule is to be

construed as including a reference to sums of

money held by or on behalf of the recognised body

25

in connection with any trust of which a person who

is or was a manager or employee of the recognised

body is or was a trustee in his capacity as such a

manager or employee;

(e)   

paragraph 9 of that Schedule is to be construed—

30

(i)   

as if sub-paragraph (1) included a reference

to documents in the possession or under the

control of the recognised body in

connection with any trust of which a person

who is or was a manager or employee of the

35

recognised body is or was a trustee in his

capacity as such a manager or employee,

and

(ii)   

as applying to such a manager or employee

and documents and property in his

40

possession or under his control in

connection with such a trust as it applies to

a solicitor and documents and property in

the possession or under the control of the

solicitor;

45

(f)   

paragraph 11(1) of that Schedule is to be construed

as including a power for the Society to apply to the

High Court for an order for the appointment of a

new trustee to a trust in substitution for a person

who is a trustee, in his capacity as a manager or

50

employee of the recognised body; and

 

 

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 3 — The Courts and Legal Services Act 1990 (c. 41)

260

 

(g)   

paragraph 13A of that Schedule is to be read as if

the references to a former partner were

references—

(i)   

in the case of a recognised body which is a

partnership, to a former partner in the

5

partnership, and

(ii)   

in any other case to a manager or former

manager of the recognised body.”

114        

In paragraph 36 (privilege from disclosure etc) in sub-paragraph (3) for “an

officer” substitute “a manager”.

10

Part 3

The Courts and Legal Services Act 1990 (c. 41)

115        

Schedule 14 to the Courts and Legal Services Act 1990 (foreign lawyers:

partnerships and recognised bodies) is amended in accordance with this

Part of this Schedule.

15

116        

In paragraph 1 (interpretation) omit the definitions of “the Council” and

“controlled trust”.

117        

In paragraph 2 (application for registration)—

(a)   

for “Council” in each place substitute “Society”,

(b)   

in sub-paragraph (1)(b) for “the Master of the Rolls” substitute “the

20

Legal Services Board”,

(c)   

in sub-paragraph (2) for “Law Society” substitute “Society”,

(d)   

in sub-paragraph (4)—

(i)   

for “Master of the Rolls” substitute “Legal Services Board”,

and

25

(ii)   

in paragraph (a) after “including” insert “the form of the

register and”, and

(e)   

omit sub-paragraph (5).

118        

In paragraph 3 (duration of registration) in sub-paragraphs (2) and (3)(c) for

“Council” substitute “Society”.

30

119        

In paragraph 5 (intervention in practices)—

(a)   

in sub-paragraph (3)(a) and (b) for “Council have” substitute

“Society has”,

(b)   

in sub-paragraph (3)(c) and (i) for “Council are” substitute “Society

is”,

35

(c)   

in sub-paragraph (4)(a) for “Council are” substitute “Society is”,

(d)   

in sub-paragraph (5)(a)(ii) for “controlled trust” substitute “trust”,

and

(e)   

in sub-paragraph (5)(c) for “Council regard” substitute “Society

regards”.

40

120        

In paragraph 6(1) (compensation fund)—

(a)   

for “Council are” substitute “Society is”,

(b)   

in paragraph (a), after “loss” insert “or hardship”,

(c)   

in paragraph (b), after “suffer” insert “loss or”, and

 

 

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 3 — The Courts and Legal Services Act 1990 (c. 41)

261

 

(d)   

after paragraph (c) insert “or

(d)   

that a person has suffered or is likely to suffer loss

or hardship in consequence of an act or omission

on the part of a registered foreign lawyer, or of an

employee of a registered foreign lawyer, in such

5

other circumstances as may be prescribed by rules

made by the Society for the purposes of this

paragraph,”.

121        

In paragraph 7 (contributions to the fund)—

(a)   

in sub-paragraph (1) for “Council” substitute “Society”,

10

(b)   

in sub-paragraph (2)(b)—

(i)   

for “clients’ money” (in both places) substitute “money to

which this paragraph applies”, and

(ii)   

omit the words from “of such amount” to the end,

(c)   

after sub-paragraph (2) insert—

15

   “(2A)  

The special levy is payable at a rate determined in

accordance with rules made by the Society for the

purposes of this sub-paragraph.

     (2B)  

Rules made for the purposes of sub-paragraph (2A) may in

particular provide for the rate of the special levy to be

20

determined by reference to—

(a)   

the amount of money to which this paragraph

applies held or received by the registered foreign

lawyer during the period specified in the

application and the length of time it was so held, or

25

(b)   

the category of registered foreign lawyers to which

the registered foreign lawyer belongs.

     (2C)  

The Society may require a registered foreign lawyer to pay

to the Society an additional contribution (the

“extraordinary levy”) at such times, and at such rate, as the

30

Society may determine in accordance with rules made by

the Society for the purposes of this sub-paragraph.

     (2D)  

Rules made for the purposes of sub-paragraph (2C) may in

particular provide for the rate of the extraordinary levy to

be determined by reference to—

35

(a)   

the amount of money to which this paragraph

applies held or received by the registered foreign

lawyer during such period as may be determined

in accordance with the rules and the length of time

for which it was so held, or

40

(b)   

the category of registered foreign lawyers to which

the registered foreign lawyer belongs.

     (2E)  

Rules made for the purposes of sub-paragraph (2A) or (2C)

may provide for the rate payable to be nil.”,

(d)   

in sub-paragraph (3)—

45

(i)   

for “Council” substitute “Society”, and

(ii)   

after “special” insert “or extraordinary”,

(e)   

in sub-paragraph (4) for “Master of the Rolls” substitute “Legal

Services Board”, and

 

 

 
previous section contents continue
 
House of Lords home page Houses of Parliament home page House of Commons home page search page enquiries

© Parliamentary copyright 2006
Revised 24 November 2006