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

Legal Services Bill [HL]


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

56

 

Special kinds of body

103     

Trade union exemptions

(1)   

Paragraphs 11 to 14 of Schedule 11 (Head of Legal Practice and Head of

Finance and Administration) do not apply in relation to a licensed body which

is a trade union.

5

(2)   

Schedule 13 (ownership) does not apply in relation to an applicant for a licence,

or a licensed body, which is a trade union.

104     

Power to modify application of licensing rules etc to special bodies

(1)   

This section applies to a licensed body (or an applicant for a licence) which is—

(a)   

a trade union,

10

(b)   

a not for profit body,

(c)   

a community interest company,

(d)   

a low-risk body (see section 106), or

(e)   

a body of such other description as may be prescribed by order made

by the Secretary of State on the recommendation of the Board.

15

(2)   

A body to which this section applies may apply to the relevant licensing

authority, in accordance with its licensing rules, for the authority to make an

order under this section.

(3)   

The licensing authority may make one or both of the following orders—

(a)   

that the authority’s licensing rules apply in relation to the body with

20

such modifications as may be specified in the order;

(b)   

that Schedule 13 does not apply in relation to the body, or applies in

relation to the body with such modifications as may be specified in the

order.

(4)   

On an application under subsection (2), the licensing authority may make any

25

order which the authority—

(a)   

has power to make under subsection (3), and

(b)   

considers appropriate in all the circumstances of the case,

   

whether or not it is the order for which the applicant applied.

(5)   

In deciding what order (if any) is appropriate in all the circumstances of the

30

case, the licensing authority must in particular have regard to—

(a)   

the reserved legal activities and non-reserved activities which the body

carries on (or proposes to carry on),

(b)   

the nature of the persons to whom the body provides (or proposes to

provide) services,

35

(c)   

any non-authorised persons who have an interest in shares in the

licensed body or hold a material interest in the licensed body, or are

managers of the body, and

(d)   

any other matter specified in the authority’s licensing rules.

(6)   

If the licensing authority makes an order under subsection (3), the authority’s

40

licensing rules or Schedule 13 or both (as the case may be) have effect in

relation to that body in accordance with that order.

(7)   

The licensing authority may not make an order under subsection (3)(a) in

relation to provisions of its licensing rules made in accordance with—

 
 

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

57

 

(a)   

section 81(4)(a) to (4)(f), or

(b)   

the paragraphs of Schedule 11 listed in subsection (8).

(8)   

The paragraphs mentioned in subsection (7)(b) are—

(a)   

paragraphs 2 and 3 (determination and review of applications for a

licence);

5

(b)   

paragraphs 7 and 8 (applications under this section);

(c)   

paragraphs 9(3), 18 and 23 (disqualifications);

(d)   

paragraph 10(2) (management);

(e)   

paragraph 16 (carrying on of licensed activities);

(f)   

paragraph 24(1), (2), (3) and (8) (grounds for suspending and revoking

10

licences);

(g)   

paragraph 24(10) and (11) (procedure for suspending or revoking

licence);

(h)   

paragraph 26(2) (review of decision to suspend or revoke licence).

(9)   

The licensing authority may not make an order under subsection (3)(a) which

15

results in its licensing rules, as they apply in relation to the body to which the

order relates, not making the provision required by the following paragraphs

of Schedule 11

(a)   

paragraph 1 (applications for licences);

(b)   

paragraph 4(3) (renewal of licences);

20

(c)   

paragraph 6 (modification of licence);

(d)   

paragraph 20 (accounts).

105     

Modifications under section 104: supplementary

(1)   

This section applies where a licensing authority has made an order under

section 104 in relation to a body to which that section applies.

25

(2)   

The licensing authority must revoke the order under section 104 if it becomes

aware that the body in respect of which the order was made is no longer a body

to which that section applies.

(3)   

The licensing authority may revoke or otherwise modify an order under

section 104

30

(a)   

on the application of the body in relation to which the order was made,

or

(b)   

of its own motion.

(4)   

It may do so only if it considers it appropriate to do so in all the circumstances

of the case, having regard to the matters mentioned in section 104(5).

35

106     

“Low risk body”

(1)   

A body (“B”) is a low risk body if the management condition and the

ownership condition are satisfied in relation to it.

(2)   

The management condition is that the number of managers of the body who

are non-authorised persons is less than 10% of the total number of managers.

40

(3)   

The ownership condition is that—

(a)   

the proportion of shares in B in which non-authorised persons have an

interest is less than 10%, and

 
 

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

58

 

(b)   

the proportion of the voting power in B which non-authorised persons

are entitled to exercise, or control the exercise of, is less than 10%, and

(c)   

if B has a parent undertaking (“P”)—

(i)   

the proportion of shares in P in which non-authorised persons

have an interest is less than 10%, and

5

(ii)   

the proportion of the voting power in P which non-authorised

persons are entitled to exercise, or control the exercise of, is less

than 10%.

(4)   

For the purposes of this section—

“parent undertaking” has the same meaning as in the Financial Services

10

and Markets Act 2000 (c. 8) (see section 420);

“voting power”, in relation to a body which does not have general

meetings at which matters are decided by the exercise of voting rights,

means the right under the constitution of the body to direct the overall

policy of the body or alter the terms of its constitution.

15

107     

Foreign bodies

The Secretary of State may by order make provision for the modification of any

provision of this Part in its application to a body of persons formed under, or

in so far as the body is recognised by, law having effect outside the United

Kingdom.

20

Interpretation

108     

Interpretation of Part 5

In this Part—

“licensed activity”, in relation to a licensed body, means an activity—

(a)   

which is a reserved legal activity, and

25

(b)   

which the licensed body is authorised to carry on by virtue of its

licence;

“non-authorised person” means a person who is not an authorised person

in relation to any activity which is a reserved legal activity, and is not a

registered foreign lawyer (within the meaning of section 89 of the

30

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

“non-reserved activity” means an activity which is not a reserved legal

activity;

“relevant appellate body”, in relation to decisions made by a licensing

authority under this Part, means the body having power to hear

35

appeals from those decisions (whether by virtue of an order under

section 79 or otherwise).

 
 

Legal Services Bill [HL]
Part 6 — Legal Complaints

59

 

Part 6

Legal Complaints

Complaints procedures of authorised persons

109     

Complaints procedures of authorised persons

(1)   

The regulatory arrangements of an approved regulator must make provision

5

requiring each relevant authorised person—

(a)   

to establish and maintain procedures for the resolution of relevant

complaints, or

(b)   

to participate in, or make arrangements to be subject to, such

procedures established and maintained by another person,

10

   

and provision for the enforcement of that requirement.

(2)   

The provision made for the purposes of subsection (1) must satisfy such

requirements as the Board may, from time to time, specify for the purposes of

that subsection.

(3)   

In this section—

15

“relevant authorised person”, in relation to an approved regulator, means

a person in relation to whom the approved regulator is a relevant

approved regulator;

“relevant complaint”, in relation to a relevant authorised person, means a

complaint which—

20

(a)   

relates to an act or omission of that person, and

(b)   

may be made under the scheme provided for by this Part.

(4)   

The Board must publish any requirements specified by it for the purposes of

subsection (2).

(5)   

This section applies in relation to the licensing rules of the Board as it applies

25

in relation to the regulatory arrangements of an approved regulator except that

subsection (3) has effect as if for the definition of “relevant authorised person”

there were substituted—

““relevant authorised person”, in relation to the Board, means a

person licensed by the Board under Part 5;”.

30

Overview of the scheme

110     

Overview of the scheme

(1)   

This Part provides for a scheme under which complaints which—

(a)   

relate to an act or omission of a person (“the respondent”) in carrying

on an activity, and

35

(b)   

are within the jurisdiction of the scheme (see section 122),

   

may be resolved quickly and with minimum formality by an independent

person.

(2)   

Under the scheme—

(a)   

redress may be provided to the complainant, but

40

(b)   

no disciplinary action may be taken against the respondent.

 
 

Legal Services Bill [HL]
Part 6 — Legal Complaints

60

 

(3)   

Section 154 prevents provision relating to redress being included in the

regulatory arrangements of an approved regulator, or licensing rules made by

the Board in its capacity as a licensing authority.

(4)   

But neither the scheme nor any provision made by this Part affects any power

of an approved regulator, or the Board in its capacity as a licensing authority,

5

to take disciplinary action.

(5)   

“Disciplinary action” means the imposition of sanctions, in respect of a breach

of conduct rules or discipline rules, on a person who is an authorised person in

relation to an activity which is a reserved legal activity.

The Office for Legal Complaints

10

111     

The Office for Legal Complaints

(1)   

There is to be a body corporate called the Office for Legal Complaints (in this

Act referred to as “the OLC”).

(2)   

Schedule 15 is about the OLC.

112     

The ombudsman scheme

15

(1)   

The scheme provided for by this Part is to be administered by the OLC in

accordance with this Part and with scheme rules made under this Part.

(2)   

In this Part “scheme rules” means rules made by the OLC.

(3)   

The scheme is to be operated under a name (which must include the word

“ombudsman”) chosen by the OLC, and is referred to in this Act as “the

20

ombudsman scheme”.

113     

General obligations

(1)   

In discharging its functions the OLC must comply with the requirements of

this section.

(2)   

The OLC must, so far as is reasonably practicable, act in a way—

25

(a)   

which is compatible with the regulatory objectives, and

(b)   

which it considers most appropriate for the purpose of meeting those

objectives.

(3)   

The OLC must have regard to—

(a)   

any principles appearing to it to represent the best practice of those

30

who administer ombudsman schemes, and

(b)   

the public interest.

114     

Corporate governance

In managing its affairs, the OLC must have regard to such generally accepted

principles of good corporate governance as it is reasonable to regard as

35

applicable to it.

 
 

 
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