Legal Services Bill [HL]

House of Lords

Session 2006 - 07
Internet Publications
Other Bills before Parliament

Legal Services Bill [HL]

Legal Services Bill [HL]
Part 4 — Regulation of approved regulators
36

(a)
a person who has permission under Part 4 of the Financial
Services and Markets Act 2000 (c. 8) to effect or carry out
contracts of insurance of a relevant class;
(b)
an EEA firm (within the meaning of that Act) of the kind
mentioned in paragraph 5(d) of Schedule 3 to that Act, which
5
has permission under paragraph 15 of that Schedule (as a result
of qualifying for authorisation under paragraph 12 of that
Schedule) to effect or carry out contracts of a relevant class;
(c)
a person who does not fall within paragraph (a) or (b) and who
may lawfully effect or carry out contracts of insurance of a
10
relevant class in a member State other than the United
Kingdom;
“regulated person” has the meaning given by section 20;
“relevant authorised person” means a person authorised by the Board
(other than by the grant of a licence under Part 5) to carry on one or
15
more activities which are reserved legal activities.
(6)
For the purposes of this section—
(a)
a contract of insurance is of a relevant class if it insures against a risk
arising from accident, credit, legal expenses, general liability to third
parties, sickness, suretyship or miscellaneous financial loss, and
20
(b)
the definition of “authorised insurer” in subsection (5) must be read
with section 22 of the Financial Services and Markets Act 2000, and any
relevant order under that section, and with Schedule 2 to that Act.
64
Cancellation of the Board’s designation under section 61(1)(c)
(1)
This section applies in relation to an order under section 61(1)(c) (cancellation
25
of Board’s designation as an approved regulator).
(2)
Where such an order is made, section 45 (other than subsection (4)(b)) and
section 46 (transfer arrangements etc on cancellation of approved regulator’s
designation) apply in relation to the Board and relevant authorised persons as
they apply to an approved regulator whose designation is cancelled under
30
section 44 and persons authorised by that approved regulator to carry on
activities which are reserved legal activities.
(3)
In this section “relevant authorised persons” has the same meaning as in
section 63.
65
The Board’s power to recommend orders made under section 61
35
(1)
The Board may recommend to the Secretary of State that the Secretary of State
make an order under section 61 in the form of a draft order prepared by the
Board and annexed to the recommendation.
(2)
Before making a recommendation under this section, the Board must give each
of the persons listed in subsection (3) a notice containing—
40
(a)
a copy of the proposed recommendation,
(b)
a copy of the proposed draft order, and
(c)
a statement specifying a period within which representations may be
made about the proposals.
(3)
Those persons are—
45
(a)
the Secretary of State,

Legal Services Bill [HL]
Part 4 — Regulation of approved regulators
37

(b)
the OFT,
(c)
the Consumer Panel,
(d)
the Lord Chief Justice, and
(e)
such other persons as the Board considers it reasonable to consult
regarding the proposals.
5
(4)
The Board must publish a notice given under subsection (2).
(5)
Before making the recommendation, the Board must have regard to any
representations duly made (whether by persons within subsection (3) or
otherwise).
(6)
If the draft order to be annexed to the recommendation differs from the draft
10
contained in the notice under subsection (2) in a way which is, in the opinion
of the Board, material, the Board must, before making the recommendation,
publish the draft order along with a statement detailing the changes made and
the reasons for those changes.
66
Effect of the Board’s designation as an approved regulator
15
(1)
The powers of the Board under sections 30 to 50 and 54 (regulatory powers in
respect of approved regulators) are not exercisable by it in relation to the Board
in its capacity as an approved regulator.
(2)
In section 52 references to an approved regulator do not include the Board in
its capacity as an approved regulator.
20
(3)
Sections 56 to 60 (reports by OFT etc) do not apply in relation to the Board in
its capacity as an approved regulator.
67
Regulatory conflict and the Board as approved regulator
(1)
An approved regulator may make a request under subsection (4) if it considers
that the regulatory arrangements of the Board (in its capacity as an approved
25
regulator) do not make appropriate provision to prevent a conflict between—
(a)
a requirement of those regulatory arrangements, and
(b)
a requirement of the regulatory arrangements of the approved
regulator.
(2)
An affected person in relation to an approved regulator may request the
30
approved regulator to exercise its powers under subsection (1).
(3)
An affected person in relation to the Board may make a request under
subsection (4) if the person considers that the regulatory arrangements of the
Board (in its capacity as an approved regulator) do not make appropriate
provision to prevent a conflict between—
35
(a)
a requirement of those regulatory arrangements, and
(b)
a requirement of the regulatory arrangements of an approved
regulator.
(4)
The request is a request made to the Board (in its capacity as an approved
regulator) that it reconsider the provision made by its regulatory arrangements
40
to prevent a regulatory conflict with the conflicting regulator.
(5)
An affected person in relation to the Board may make an application under
subsection (6) if the person considers that the regulatory arrangements of an

Legal Services Bill [HL]
Part 4 — Regulation of approved regulators
38

approved regulator do not make appropriate provision to prevent a conflict
between—
(a)
a requirement of those regulatory arrangements, and
(b)
a requirement of the regulatory arrangements of the Board (in its
capacity as an approved regulator).
5
(6)
The application is an application to the Board for it to exercise its powers under
section 31 to direct the approved regulator—
(a)
to take steps to modify, in such manner as may be specified in the
direction, the provision made by its regulatory arrangements to
prevent a regulatory conflict with the Board (in its capacity as an
10
approved regulator), or
(b)
if its regulatory arrangements do not make any such provision, to make
such provision as may be specified in the direction to prevent such a
conflict.
(7)
An affected person in relation to an approved regulator (other than the Board)
15
may make a request under subsection (8) if the person considers that the
regulatory arrangements of the approved regulator do not make appropriate
provision to prevent a conflict between—
(a)
a requirement of those regulatory arrangements, and
(b)
a requirement of the regulatory arrangements of the Board (in its
20
capacity as an approved regulator).
(8)
The request is a request to the approved regulator that it reconsider the
provision made by its regulatory arrangements to prevent a regulatory conflict
with the Board.
(9)
The Board (in its capacity as an approved regulator) and any other approved
25
regulator must consider any request made to it under this section.
(10)
Subsections (5) to (8) of section 52 apply in relation to an application under
subsection (6) as they apply in relation to an application under that section,
except that—
(a)
references to the applicant regulator are to be read as references to the
30
person who made the application, and
(b)
references to the conflicting regulator are to be construed in accordance
with this section.
(11)
In this section—
“affected person” in relation to the Board or any other approved
35
regulator, means—
(a)
any person authorised by the body to carry on a reserved legal
activity, or
(b)
an employee or manager of such a person;
“conflicting regulator” means—
40
(a)
in a case within subsection (1), the approved regulator making
the request, and
(b)
in a case within subsection (3) or (5), the approved regulator
whose regulatory arrangements are considered to conflict with
those of the Board.
45

Legal Services Bill [HL]
Part 4 — Regulation of approved regulators
39

Functions of approved regulators etc
68
Modification of the functions of approved regulators etc
(1)
The Secretary of State may by order modify, or make other provision relating
to, the functions of an approved regulator or any other body (other than the
Board).
5
(2)
The Secretary of State may make an order under subsection (1) only if—
(a)
the Board has made a recommendation under this section,
(b)
a draft order was annexed to the recommendation, and
(c)
the order is in the same form as, or a form not materially different from,
that draft order.
10
(3)
The Board may make a recommendation under this section only with a view to
an order being made which enables the body to which it relates to do one or
more of the following—
(a)
to become designated by an order under Part 2 of Schedule 4 as an
approved regulator, or designated by an order under Part 1 of Schedule
15
10 as a licensing authority, in relation to one or more reserved legal
activities;
(b)
to authorise persons or any category of persons (whether corporate or
unincorporate) to carry on one or more activities which are reserved
legal activities in relation to which the body is (at the time the
20
authorisation has effect) designated as an approved regulator, or to
make regulatory arrangements;
(c)
to carry out its role as an approved regulator (including its role, if any,
as a licensing authority) more effectively or efficiently;
(d)
to become a qualifying regulator under Part 1 of Schedule 18;
25
(e)
if it is a designated qualifying regulator under section 86A of the
Immigration and Asylum Act 1999 (c. 33), to authorise persons to
provide any additional advice or services the provision of which
amounts to the provision of immigration advice or immigration
services.
30
(4)
Subsections (2) (other than paragraph (a)), (3) and (4) of section 63 apply in
relation to an order under this section as they apply in relation to an order
under section 61(1)(b) in relation to the Board.
(5)
An order under this section also may make provision in relation to—
(a)
the provision of immigration advice or immigration services, and
35
(b)
persons authorised to provide such advice and services by the body to
which the order relates,

corresponding to the provision which may be made by virtue of section 63(2)
to (4) in relation to reserved legal activities and persons authorised to carry on
those activities.
40
(6)
An order under this section may modify provisions made by or under any
enactment (including this Act or any Act passed after this Act), prerogative
instrument or other instrument or document.
(7)
Any provision made by an order under this section may be expressed to be
conditional upon—
45
(a)
the body to which the order relates being designated by an order under
Part 2 of Schedule 4 as an approved regulator, or by an order under Part

Legal Services Bill [HL]
Part 5 — Alternative business structures
40

1 of Schedule 10 as a licensing authority, in relation to one or more
reserved legal activities specified in the proposed draft order, or
(b)
the body to which the order relates becoming a designated qualifying
regulator under section 86A of the Immigration and Asylum Act 1999
(c. 33).
5
(8)
The powers to make an order conferred by this section are without prejudice
to any powers (statutory or non-statutory) which an approved regulator or
other body may have apart from this section.
69
Procedural requirements relating to recommendations under section 68
(1)
A recommendation may be made under section 68 only with the consent of the
10
approved regulator or other body to which the recommendation relates.
(2)
Before making a recommendation under that section, the Board must publish
a draft of—
(a)
the proposed recommendation, and
(b)
the proposed draft order.
15
(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
representations duly made.
(5)
If the draft order to be annexed to the recommendation differs from the draft
20
published under subsection (2)(b) in a way which is, in the opinion of the
Board, material, the Board must, before making the recommendation, publish
the draft order along with a statement detailing the changes made and the
reasons for those changes.
Part 5
25
Alternative business structures
Introductory
70
Carrying on of activities by licensed bodies
(1)
The provisions of this Part have effect for the purpose of regulating the
carrying on of reserved legal activities and other activities by licensed bodies.
30
(2)
In this Act “licensed body” means a body which holds a licence in force under
this Part.
71
“Licensable body”
(1)
For the purposes of this Act, a body is a “licensable body” if—
(a)
at least one manager of the body is an individual who is a non-
35
authorised person, or
(b)
at least one person who has an interest in shares in the body is a non-
authorised person.

Legal Services Bill [HL]
Part 5 — Alternative business structures
41

(2)
For the purposes of this Act, whether a person has an interest in shares in any
description of body is to be determined in accordance with section 820 of the
Companies Act 2006 (c. 46).
(3)
In this Act “shares” means—
(a)
in relation to a body with a share capital, allotted shares (within the
5
meaning of the Companies Acts);
(b)
in relation to a body with capital but no share capital, rights to share in
the capital of the body;
(c)
in relation to a body without capital, interests—
(i)
conferring any right to share in the profits, or liability to
10
contribute to the losses, of the body, or
(ii)
giving rise to an obligation to contribute to the debts or
expenses of the body in the event of a winding up.
Licensing authorities
72
Licensing authorities and relevant licensing authorities
15
(1)
In this Act “licensing authority” means—
(a)
the Board, or
(b)
an approved regulator which is designated as a licensing authority
under Part 1 of Schedule 10 and whose licensing rules are approved for
the purposes of this Act.
20
(2)
For the purposes of this Act—
(a)
the Board is a licensing authority in relation to all reserved legal
activities, and
(b)
an approved regulator within subsection (1)(b) is a licensing authority
in relation to any reserved legal activity in relation to which the
25
designation is made.
(3)
The Board—
(a)
may delegate any of its functions as a licensing authority to such
persons as it considers appropriate;
(b)
must take such steps as are necessary to ensure an appropriate financial
30
and organisational separation between the activities of the Board that
relate to the carrying out of its functions as a licensing authority and the
other activities of the Board.
(4)
In this Part “relevant licensing authority”—
(a)
in relation to a licensed body, means the licensing authority by which
35
the licensed body is authorised to carry on an activity which is a
reserved legal activity;
(b)
in relation to an applicant for a licence, means the licensing authority to
which the application is made.
73
Designation of approved regulator as licensing authority
40
Part 1 of Schedule 10 makes provision for approved regulators to be
designated, by order, as licensing authorities in relation to one or more
reserved legal activities.