Office of Public Sector Information
the complaint is determined or otherwise resolved in favour of the respondent; and
where the ombudsman is satisfied that the respondent took all reasonable steps to try and resolve the complaint under the respondent’s complaints procedures.
351.Section 136(4) defines the scope of the respondent’s complaints procedures.
352.In accordance with section 136(5), scheme rules may also provide for case fees to be reduced, waived or refunded in other circumstances. This subsection also allows the rules to set different charges for different stages of a complaint.
353.Scheme rules can provide that unpaid case fees incur interest and, by virtue of section 136(6), unpaid case fees can be recovered by the OLC as a debt.
354.The OLC will, as is the procedure with all scheme rules, be obliged to consult and gain the Board’s approval before making rules on case fees under this section and, in addition, (by virtue of section 155) must also obtain the consent of the Lord Chancellor.
355.This section makes provision for the ombudsman’s powers in making a determination. The governing principle, set out in section 137(1), is that the ombudsman must determine a complaint according to what is fair and reasonable in all the circumstances of the case. Sections 137(2) and 137(3) set out the directions which the ombudsman may make in a determination, namely:
that the respondent make an apology to the complainant;
that the respondent’s fees for the services to which the complaint relates are limited to a specified amount (and any other action be taken, such as a refund, which may be necessary to give effect to this);
that the respondent pay compensation for loss, inconvenience or distress;
that the respondent at their own expense secure rectification of any specified error, omission or other deficiency in connection with the matter under complaint; or
that the respondent at their own expense take such other action in the interests of the complainant as the direction may specify.
356.Section 137(4) allows for any amount payable pursuant to a determination to bear interest. Section 137(5) provides that the powers of the ombudsman in making a determination are not confined to cases where the complainant may have a cause of action in negligence (and so may be available in cases of “simple” inadequate professional service).
357.This section ensures the total value of the directions made under section 137(2)(c) to (e) on the determination of a complaint under the ombudsman scheme does not exceed £30,000 (excluding interest – see subsection (3)). Prior to the commencement of the Act, the highest level of compensation in the legal sector was £15,000.
358.Section 138(2) explains “total value” as the aggregate of the amount of any compensation payable, plus the amount of expenses reasonably incurred by the respondent in rectifying any specified error, omission or deficiency. It does not include any reduction in the level of fees payable, or associated refund etc, by virtue of a direction under section 137(2)(b).
359.This section empowers the Lord Chancellor, by order, to amend the limit on the total value of directions imposed by section 138, on the recommendation of an “interested body” (the OLC, the Board or the Consumer Panel). The body recommending alteration of the limit must first publish its proposed recommendation and consider representations made in respect of it. If asked to do so by the Lord Chancellor, an interested body must consider whether it is appropriate to make a recommendation under this section.
360.In determining a complaint the ombudsman is required to prepare a written statement of the determination (section 140(1)). Section 140(2) sets out the detail of what should be included in this statement, and section 140(3) lists the people and bodies to whom the statement must be supplied. If the determination is accepted by the complainant, it is binding on both parties (section 140(4)), and no further legal proceedings can be instituted with regard to the matter that was the subject of the complaint (section 140(11)); but if the complainant does not notify acceptance within the time specified for this purpose, the complainant is to be taken as having rejected the determination (section 140(5) and 140(8)). However, there may be circumstances where a person is unable to reply to the determination within the time specified and sections 140(6) and 140(7) provide for this. On acceptance or rejection by the complainant, the ombudsman must give notice to those parties set out in section 140(7), and the ombudsman’s certificate of determination is evidence that the determination was duly made under the scheme (sections 140(9) and 140(10)).
361.This section makes provision for enforcement of directions made by an ombudsman. The complainant or an ombudsman can apply to the High Court or a county court. The court may order that any amount due under a direction to refund fees or pay compensation, including interest, is recoverable as if the amount were payable under an order of the court. If the respondent fails to comply with any other direction pursuant to a determination, the court may, on the application of the complainant or an ombudsman, order the respondent to take such steps as the court directs to comply with it. An ombudsman may only make an application with the complainant’s consent and only in circumstances specified by scheme rules (section 141(5)).
362.This section makes provision governing reporting of any order for enforcement of directions made by a court under section 141. The court must give the OLC notice of any order made against a person, and the OLC in turn must make arrangements to inform any relevant approved regulators, and may require the approved regulator to report on what action it has taken. If, in such a case, an ombudsman is not satisfied with the action taken, then it may inform the Board.
363.In the course of consideration of a complaint, it may become apparent that there is a possibility that a respondent, or other person in relation to the matter concerned, has breached their regulator’s rules of conduct. Where the ombudsman is of such an opinion, this section allows the ombudsman to notify that person’s regulator, and to notify the complainant that they have done this. The regulator can be required to report to the ombudsman on the actions it takes. If the ombudsman, on studying the report, is of the opinion that the approved regulator is seriously or persistently failing to enforce its rules of conduct, the ombudsman may report this to the Board.
364.Section 144(1) requires scheme rules to set out that the OLC, an ombudsman or a member of the OLC’s staff must disclose information to an approved regulator. The information to be disclosed must be specified in the rules, as must the circumstances in which it must be disclosed. Each approved regulator must provide in its regulatory arrangements for the provision of information to the OLC, an ombudsman or members of the OLC’s staff, of such description and in such circumstances as may be specified in the arrangements (section 144(2)). The Board may specify requirements which arrangements under section 144(2) or rules under section 144(1) must fulfil (and must publish any such requirements). In specifying those requirements, the Board must take into account the need, so far as is reasonably practicable, to avoid duplication of investigations and to ensure that the OLC assists approved regulators and vice versa (section 144(4) to 144(6)). Sections 144(7) and 144(8) impose a mutual obligation on the OLC and on approved regulators to consult one another in relation to draft rules/provisions of the kind described in sections 144(1) and 144(2), and, when seeking the Board’s consent to those rules/provisions, to identify any ongoing objections on the part of the other party.
365.Section 145(1) requires each approved regulator to make provision in its regulatory arrangements that all authorised persons regulated by it must provide co-operation and assistance to the ombudsmen in relation to an investigation, consideration or determination of a complaint; and this must include provision for enforcing that requirement. The Board may specify requirements which such provision must satisfy (subsection 145(2)), and must publish any such requirements (subsection 145(3)).
366.Where an authorised person fails to co-operate with an ombudsman as stated in section 146 the ombudsman can notify that person’s approved regulator. The regulator may be required to report to the ombudsman on the action it takes; and if the ombudsman is of the opinion that the approved regulator is seriously or persistently failing to enforce its rules of conduct, the ombudsman may report this to the Board (and may do so even if the complaint is subsequently withdrawn).
367.This section empowers an ombudsman to require such information and/or documents from parties to a complaint as the ombudsman may specify, before the end of such period (which must be a reasonable period) as the ombudsman may specify, and in such manner or form as the ombudsman may specify (sections 147(1) and 147(2)); provided that the ombudsman considers that the information necessary to determine the complaint (section 147(3)). The ombudsman may take copies of or extracts from a document and, in the absence of a document may require the person asked to produce it to state to the best of that person’s knowledge and belief where it is (sections 147(4) and 147(5)). None of these powers may be used to compel disclosure which could not be compelled in civil proceedings before the High Court (section 147(6)).
368.This section follows the approach and structure of sections 142 and section 146. Where the ombudsman considers that an authorised person has failed to co-operate with an ombudsman as required by section 147, the ombudsman can notify that person’s authorising body, which can be required to report to the ombudsman on the actions it takes. If the ombudsman is of the opinion that the authorising body is seriously or persistently failing to enforce its rules of conduct, the ombudsman may report this to the Board (and may do so even if the complaint is subsequently withdrawn).
369.This section applies if a party, other than the authorised person (the defaulter), has failed to co-operate with an ombudsman as required by section 147. In such a case, the ombudsman may inform the court (which in this case means the High Court –section 149(7)) of the person’s failure to comply with the request for information. However (by virtue of sections 149(5) and 149(6)), where the defaulter is an authorised person, the ombudsman must first be satisfied that each relevant authorising body to which a report was made under section 148 has been given a reasonable opportunity to take action, and that the defaulter has continued to be in default. The High Court may thereupon enquire into the case, and if satisfied that the defaulter has failed without reasonable excuse to comply with the requirement, it may deal with the defaulter (and, in the case of bodies corporate and other legal persons, any directors or similar persons) as if the defaulter were in contempt (section 149(4)).
370.The OLC may publish a report about the investigation, consideration and determination of any particular case if it considers it appropriate. The report may not contain the complainant’s name or any other identifying information, unless the complainant consents to the inclusion of that information.
371.Under this section, “restricted information” is any information that has been collected during an investigation of a complaint. This section protects the complainant in that all such information is classed as confidential and, except as listed under section 152, must not be disclosed except to the extent that it is excluded information. Excluded information is information which was obtained more than 70 years before the date of disclosure, or which is already available to the public, or which is in an appropriately “anonymised” form so that information relating to a particular individual cannot be ascertained from it.
372.This section makes exceptions to section 151. First, one restricted person (i.e. the OLC, an ombudsman or a member of the OLC’s staff – see section 151(2)) may disclose restricted information to another restricted person (section 152(1)). Second, restricted information may be disclosed for the purposes of the investigation in the course of which, or for the purposes of which, it was obtained (section 152(2)); and third, restricted information may be disclosed for a variety of specific and limited purposes listed in section 152(3), with the possibility (section 152(3)(g)) of additional purposes being added by order made by the Lord Chancellor.
373.The section also confers on the Lord Chancellor a power to make an order preventing the disclosure of information in circumstances or for purposes prescribed in the order.
374.This section amends the Data Protection Act 1998 to ensure that Part 6 of the Legal Services Act is able to operate compatibly with it by exempting personal data processed by the OLC in complaints handling from the subject information provisions where application of those provisions would prejudice the proper discharge of the complaints handling functions. This will ensure that frivolous applications do not impact adversely on the ombudsman scheme. This amendment is similar to provision made in the 1998 Act for certain other regulators and ombudsmen and will ensure that privileged information may be disclosed in certain specific situations.
375.This section makes provision placing OLC proceedings and publications on a par with court proceedings for the purposes of the law of defamation.
376.This section requires the consent of the Board prior to any scheme rules being made or modified by the OLC. It also specifically requires the consent of the Lord Chancellor to rules under section 136 which impose charges on respondents to complaints. The OLC is required to consult on its proposed rules before seeking the necessary consent: the consultation requirements are in section 205.
377.Under this section the Board has the power to direct the OLC to amend any of its rules. The direction may be in general terms or it may require a specific modification. Before making a direction under section 156(1)(b) to make a specific modification, the Board must give the OLC a formal notice that gives details of the proposed modifications, and must publish that notice and take account of any representations made (section 156(2)). In such a case the consultation procedure under section 205 is disapplied, as is the requirement to obtain the Board’s consent (section 156(3)).
378.The OLC is to be the single point of entry for all complaints. This is subject to the requirement, in section 126, that complaints (except in specified circumstances) must, in the first place, be considered under the respondent’s internal complaints procedures.
379.The OLC will investigate complaints and provide redress, but it will report any possible misconduct to the relevant approved regulator, which will take any necessary disciplinary action. There is therefore a clear split between the power to consider redress (OLC), and consideration of disciplinary action (approved regulators). As part of the provision for this split, this section prohibits approved regulators from including in their regulatory arrangements any provision relating to redress (defined in section 157(4)).
380.In accordance with section 157(5) the prohibition on provision relating to redress does not prevent provision for certain types of arrangements: compensation arrangements, indemnification arrangements and certain regulatory arrangements (as specified in section 158).
381.Transitional arrangements cover proceedings in respect of complaints under way at the date of commencement of the OLC’s operations, which are made by order under section 211 (sections 157(2) and 157(3)).
382.Section 158 makes clear that section 157 does not prohibit approved regulators from making provision in their regulatory arrangements requiring, or authorising the approved regulator to require, an authorised person to take certain action of a type described in sections 158(1)(a) to (f). That action is to investigate whether there are any persons who may have a claim for redress against the relevant authorised person (section 158(1)(a)), to report back to the approved regulator on the outcome (section 158(1)(b)), to identify any affected persons who may have a claim and notify them that they may have a claim (sections 158(1)(c) and (d)), and to provide any affected persons with information about the authorised person’s complaints procedures and the ombudsman scheme and ensure that the complaints procedures operate as if the affected person had made a formal complaint (sections 158(1)(e) and (f)). The intention behind the section is to ensure that approved regulators are not prevented by section 157 from making provisions – subject to the Board’s approval – requiring authorised persons to take proactive steps in cases where a number of clients may have been affected by the relevant authorised persons’ acts or omissions and may have a claim for redress against them.
383.This section abolishes the offices of Legal Services Complaints Commissioner and Legal Services Ombudsman. Until this section is commenced, the Legal Services Ombudsman will examine the handling of individual complaints by legal professional bodies on behalf of members of the public, and the Legal Services Complaints Commissioner will examine the Law Society’s capability to handle complaints made about its members efficiently and effectively. The complaints handling scheme which this Act establishes replaces these offices.
384.This section extends Part 6 of the Act to bring claims management services within the ombudsman scheme complaints handling jurisdiction. Although the provision of regulated claims management services is not designated as a reserved legal activity, this section brings those persons authorised under Part 2 of the Compensation Act 2006 within the ombudsman scheme’s jurisdiction on the same basis as authorised persons in relation to an activity which is a reserved legal activity.
385.For the purposes of Part 6, the claims management regulator is treated as an approved regulator, and regulated claims management services are treated as a reserved legal activity. This affects, among other things, the definition of a lay person in Schedule 15, which is to be read as excluding a person authorised under Part 2 of the 2006 Act (so that a person who is or has been authorised under Part 2 of the 2006 Act may not be appointed as Chief Ombudsman).
386.This Part of the Act makes provision for the funding of the Board and OLC by way of levy on the approved regulators, including requirements for rules to be made by the Board clarifying when the levy is to be made payable, and the amount payable as well as the circumstances in which the levy may be waived.
387.It also defines the type of guidance that the Board may give. It makes provision allowing the Board to enter into voluntary arrangements for the purpose of improving standards in the provision of legal services, and provision for extending the jurisdiction of the OLC to a further range of complaints. This Part also provides that information obtained by the Board (whether in its capacity as an approved regulator or licensing authority or otherwise) may be used by the Board for any purpose connected to the exercise of its functions.
388.Section 162(1) sets out a non-exhaustive list of matters about which the Board may give guidance. This guidance may include information or advice, and section 162(3) allows the Board to give financial or other assistance to persons who provide that information or advice. The Board will be able to publish its guidance and offer copies for sale. Following any guidance being issued, the Board may consider the extent to which an approved regulator has complied with such guidance when exercising its regulatory functions. Section 162(6) requires that, when the Board acts as approved regulator or a licensing authority under Part 5 of the Act, it must have regard to any guidance it has issued under this section.
389.This section allows the Board to enter into voluntary arrangements with any person for the purposes of improving standards and promoting best practice in the legal services sector.
390.This section gives the OLC a power, subject to an order made by the Lord Chancellor, to establish a complaints scheme which is separate from the ombudsman scheme under Part 6. A scheme set up under this section can make provision in relation to complaints about acts or omissions of persons providing legal services who are not authorised persons. Such a scheme is referred to as a “voluntary scheme” and the rules under this section are referred to as “voluntary scheme rules”. The Lord Chancellor’s order can limit the kinds of complaint that come within the scheme by reference to the description of the complainant, the respondent, or the legal services to which the complaint relates. The voluntary scheme can provide redress to consumers but cannot be used to discipline respondents. Section 164(9) makes clear that the consent requirements and the Board’s powers in respect of rules (in sections 155 and 156 respectively) apply to voluntary scheme rules in the same way as they apply to scheme rules. Section 164(8) makes clear that section 131, which establishes vicarious responsibility in respect of matters which are the subject of complaints, applies for the purposes of the voluntary scheme as it applies for the purposes of the ombudsman scheme.
391.This section sets out the procedure for making an order under section 164(2). The Lord Chancellor can only make such an order upon recommendation by one of the interested bodies (the OLC, the Board or the Consumer Panel). Following a request from the Lord Chancellor an interested body must consider whether it is appropriate to make a recommendation. Before making a recommendation, an interested body must publish the draft recommendation and invite and consider representations from the public. Upon receipt of a recommendation the Lord Chancellor must consider whether to follow it. If the Lord Chancellor decides not to follow a recommendation the Lord Chancellor must publish reasons for this.
392.This section sets out the circumstances in which complaints may be determined and provides for a way in which further detail of the voluntary scheme is provided. A complaint may be determined under the voluntary jurisdiction scheme only if the complainant falls within a class of persons specified in voluntary scheme rules, if the complainant wants the voluntary scheme to deal with their complaint, if (at the time of the act or omission complained of) the respondent was participating in the scheme and if (when the complaint is made) the respondent has not withdrawn from the scheme.
393.Further, complaints received and determined under the auspices of the voluntary jurisdiction scheme will be dealt with in accordance with standard terms fixed by the OLC with the Board’s consent. In particular, standard terms may provide for the payment of a fee to the OLC by persons participating in the scheme and/or awards of costs on the determination of a complaint (including awards in favour of the OLC to provide a contribution to its costs in dealing with the complaint).
394.Under this section, “restricted information” is any information obtained by the Board in the exercise of its functions. A restricted person is the Board (including in its capacity as approved regulator or licensing authority) or a person authorised by the Board to carry out its functions. Restricted information must not be disclosed by a restricted person or by any person who has received the information from a restricted person. Section 168 provides an exception to this rule. Restricted information does not include “excluded information”, namely information which was obtained more than 70 years before the date of disclosure, or which is already available to the public, or which is in an appropriately “anonymised” form so that information relating to a particular individual cannot be ascertained from it.
395.This section makes exceptions to section 167. The first is that a restricted person may disclose restricted information to another restricted person. The second is that restricted information may be disclosed for the purposes of enabling the Board to exercise its functions. Section 168(3) sets out a list of further specific and limited circumstances in which restricted information may be disclosed, with the possibility (section 168(3)(g)) of additional purposes being added by order made by the Lord Chancellor. Such orders may only be made in order to allow disclosure to persons (other than approved regulators) who exercise regulatory functions. The section also allows the Lord Chancellor to prevent the disclosure of restricted information under section 167 by order for the purposes prescribed in that order.
396.This section sets out a list of permitted persons and allows for the disclosure of information by them to the Board to enable or assist it in exercising its functions. The section prohibits the disclosure of information where it contravenes the Data Protection Act 1988, where it is prohibited by Part 1 of the Regulation of Investigatory Powers Act 2000 or, if it is being disclosed on behalf of the Commissioners for Her Majesty’s Revenue and Customs, where it has not been authorised by the Commissioners. The section allows the Lord Chancellor to designate other persons as persons who can disclose information to the Board, where their functions are of a public nature.
397.This section amends the Data Protection Act 1998 to ensure that the Legal Services Act 2007 is able to operate compatibly with it by exempting personal data processed by the Legal Services Board from the subject information provisions, where application of those provisions would prejudice the proper discharge of the functions. This will ensure that the Board is able to use its information powers to the benefit of the public by highlighting areas of concern. This amendment is similar to provision made in the 1998 Act for certain other regulators and ombudsmen, for example the Financial Services Authority.
398.This section sets out the mechanism by which the Board and the OLC receive funding to meet their expenditure in carrying out their functions. The Lord Chancellor may pay sums to the Board or the OLC to cover their expenditure under or for the purposes of the Act. The Lord Chancellor may also pay sums to the Board to cover expenditure for the purposes of its functions under any other enactment. This is to ensure that the Board can, via the levy, recover amounts in respect of expenditure resulting from functions which it has under other Acts by virtue of amendments made by this Act. The Lord Chancellor may determine the manner in which, and times at which, sums are to be paid and may impose conditions on the payments.
399.This section makes provision for a levy. The purpose of the levy is to cover:
expenditure by the Board under or for the purposes of the Act or any other enactment;
expenditure by the OLC under or for the purposes of the Act; and
expenditure of the Lord Chancellor on the establishment of the Board and the OLC.
400.This expenditure is met in the first instance by sums paid by the Lord Chancellor’s grant under section 172. The levy, which is paid into the Consolidated Fund, recoups this expenditure from the “leviable bodies”. The leviable bodies are the approved regulators, the person designated as the regulator in relation to claims management services under the Compensation Act 2006, and such other persons as the Lord Chancellor may prescribe by order (section 173(5)). The Board must be satisfied that the rules concerning the apportionment of the levy are fair and proportionate. To ensure that expenditure is not recovered twice, the expenditure to which the levy relates is the difference between the total of the expenditure of the Board and OLC and the expenditure of the Lord Chancellor (for the establishment of the Board and OLC) and the total of any sums received by the Board and OLC as:
application fees;
charges for providing statements, guidance, rules;
sums received in the Board’s capacity as approved regulator;
sums received in the Board’s capacity as licensing authority;
amounts received by the OLC by way of charges paid by respondents;
costs paid to the OLC in relation to complaints;
amounts paid to the Board in respect of voluntary arrangements; and
amounts paid to the Board under paragraph 7(g) of the Schedule to the Compensation Act 2006.
401.The OLC’s leviable expenditure excludes any cost incurred that may reasonably be attributed to the exercise of its functions under sections 164, 165 and 166.
402.In addition, the levy rules require the Board to calculate the apportionment of the levy among the bodies which are required to pay it, and to notify those bodies of their liability to pay the levy and of the times it is payable.
403.In addition, the levy rules require the Board to calculate the apportionment of the levy among approved regulators and to notify approved regulators of their liability to pay the levy and the times at which it is to be paid.
404.All monies received by the Board or the OLC must be paid into the Consolidated Fund. This section lists the different sources of income of the Board and OLC that must be paid into the Consolidated Fund.
405.This Part makes provision regarding the Board’s relationship with the Solicitors Disciplinary Tribunal. This Part also makes provision regarding the register of trade mark attorneys and the register of patent attorneys. It makes provision about legal professional privilege and amendments to the Immigration and Asylum Act 1999. It furthermore provides for the amendment of legislation relating to the Law Society and the Council for Licensed Conveyancers.
406.Under this section all authorised persons, and all managers and employees of authorised persons, have a statutory duty to comply with the regulatory arrangements applicable to them. Section 176(3) confirms that regulatory arrangements include those that the Board makes in its capacity as licensing authority.
407.This section introduces Schedule 16 which amends the Solicitors Act 1974, the Administration of Justice Act 1985 and the Courts and Legal Services Act 1990 to update the Law Society’s regulatory framework and powers. Part 1 of Schedule 16 amends the 1974 Act; Part 2 amends the 1985 Act; and Part 3 amends the 1990 Act. A large number of the amendments are minor and consequential changes so that the terminology of the three Acts being amended is consistent with the Legal Services Act 2007, along with changes of references to the Council of the Law Society so that they refer to the Law Society, as the approved regulator, which follows on from the requirement in section 30 to maintain arrangements providing for an appropriate separation between the representative and regulatory roles. The notes below do not deal in detail with the paragraphs which solely or mainly make such amendments, but concentrate on those paragraphs making more substantive changes.
408.As part of the change to a new structure with the Board as oversight regulator, the functions of the Master of the Rolls in respect of the approval of rules and regulations made by the Law Society, and as an appellate authority in relation to certain Law Society decisions, are removed (provision for the necessary amendments to the 1974 Act, among other things, is made by paragraphs 4, 5, 8, 16, 17, 20, 30, 31, 32, 34, 38, 41, 47 and 51). As the relevant rules fall within the definition of regulatory arrangements, as set out at section 21 of the Legal Services Act 2007, they must be approved by the Board under the provision made in Schedule 4; and the route of appeal for decisions previously appealed to the Master of the Rolls is instead to the High Court.
409.Paragraph 3, along with paragraphs 15, 22 and 36 expand the regulatory remit of the Law Society to enhance its powers over Sole Practitioners and give it new powers over employees of solicitors or recognised bodies. They require a Sole Practitioner to be approved for status as such by virtue of an application for an endorsement on their practising certificate to that effect. They also make related regulatory provisions which allow the Law Society to place conditions on a Sole Practitioners practising rights and to suspend recognition as a sole practitioner. This will allow the Society to specify, for example, that a Sole Practitioner is not allowed to provide a specific type of legal service or to suspend their Sole Practitioner status if the Society considers it is no longer appropriate for him to be recognised as such. Various other minor amendments related to these substantive changes have been included in Schedule 16 in recognition of these enhanced powers (for example, new section 10A(2)(b) of the 1974 Act (contained in paragraph 10)).
410.Employees of solicitors are covered in paragraph 36. This allows the Law Society regulatory control over employees of solicitors in respect of professional practice, conduct and discipline. For example, if an employee breaches the rules under section 34 of the 1974 Act (as amended) in relation to accountants’ reports, the Law Society can make a complaint to the Solicitor’s Disciplinary Tribunal in respect of that employee. Under paragraph 46 of Schedule 16 (new section 44D of the 1974 Act or paragraph 103 of Schedule 16 (new section 14B) to the 1985 Act), action can be taken against an employee of a solicitor.
411.Paragraph 4 removes the requirement in section 2 of the 1974 Act that the Lord Chancellor and the Master of the Rolls must approve the training regulations made by the Law Society. It also removes references to training “articles” from section 2.
412.Paragraph 5 amends section 3 of the 1974 Act so as to transfer the Master of the Rolls’ functions in respect of the admission of solicitors to the Law Society. Paragraph 8 amends section 8 of the 1974 Act so as to transfer to the High Court the Master of the Rolls’ appellate functions in respect of Law Society decisions concerning the restoration of a solicitor’s name to the roll.
413.Paragraphs 9 and 10 substitute new provisions for the existing sections 9 and 10 of the 1974 Act, which deal with applications for and the issuing of practising certificates. The new provisions provide that certificates will only be issued in accordance with regulations made by the Law Society under section 28 of the 1974 Act. A new section 10A requires the Law Society to keep a register of all solicitors holding practising certificates.
414.Paragraph 14 replaces section 13 of the 1974 Act with a new provision that provides that the High Court will have jurisdiction in respect of appeals in connection with the issue of practising certificates. Paragraphs 16 and 17 amend sections 13A and 13B of the 1974 Act so as to transfer from the Master of the Rolls to the High Court responsibility for handling appeals against the imposition of conditions on practising certificates and the suspension of practising certificates.
415.Paragraph 21 amends section 17 of the 1974 Act so as to remove the requirement that the Law Society publish details of the termination of the suspension of a solicitor’s practising certificate in the London Gazette on the application of the solicitor in question. Paragraph 30 amends section 28 of the 1974 Act so as to allow the Law Society to make regulations covering a broad range of matters relating to the right to practise as a solicitor.
416.Paragraph 31 amends section 31 of the 1974 Act so as to allow the Law Society to make rules regarding the fitness to practise of solicitors, and to remove the requirement that rules made regarding the professional practice, conduct and discipline of solicitors be approved by the Master of the Rolls in order to have effect. The Board takes over the Master of the Rolls’ function in this regard.
417.Paragraphs 33 to 35 cover sections 33, 33A and 34 of the 1974 Act, which deal with matters relating to solicitors’ accounts. These provisions have been amended in order to transfer certain rule-making powers from the Law Society Council to the Law Society itself, and to broaden the scope of these powers.
418.Paragraph 37 makes provision to allow the Law Society to make rules about how its compensation arrangements (including but not limited to the compensation fund) will operate. This removes the previous restrictions in the Solicitors Act 1974 so that there is greater flexibility about the circumstances in which grants of compensation may be made, what payments may be used for, and how monies may be collected.
419.Paragraph 41 amends section 41 of the 1974 Act so as to transfer to the High Court the Master of the Rolls’ functions in respect of appeals against decisions of the Law Society prohibiting a solicitor from employing certain persons. Paragraph 41 also widens the range of sanctions that can be imposed where a solicitor acts in contravention of section 41 of the 1974 Act.
420.Paragraph 43 extends the order-making powers of the Law Society and the Solicitors Disciplinary Tribunal under section 44 of the 1974 Act. The new order-making powers are consequent on the new forms of bodies that the Law Society may recognise and regulate under amendments to section 9 of the Administration of Justice Act 1985, found at paragraph 81 of this Schedule. The Law Society can now decide whether or not to order that non-solicitors are prohibited from being employed or remunerated by solicitors, registered European lawyers and recognised bodies, and also that they are prohibited from being managers of or from having an interest in recognised bodies. This flexibility will also ensure that, during the interim period before Part 5 of the Act (Alternative Business Structures) is fully commenced, the Law Society has the appropriate regulatory control over the up-to-25% non-lawyer managed legal disciplinary partnerships that are permitted by Schedule 16 amendments to previous legislation (see paragraph 430 of these Explanatory Notes, below).
421.Section 44(1) of the 1974 Act makes it an offence for any person in respect of whom a section 43 order is made, to seek employment or remuneration from a solicitor or recognised body, or to seek or acquire an interest in a recognised body. Section 44(2) of the 1974 Act, together with sub-paragraph (1)(d) of paragraph 16 and new sub-paragraph (1A)(d) of paragraph 16 (see amendment below) of Schedule 2 to the Administration of Justice Act 1985, and together with new sub-paragraph (3A) of paragraph 15 of the Courts and Legal Services Act 1990, allow complaints to be made to the Solicitors Disciplinary Tribunal where a solicitor, registered foreign lawyer, registered European lawyer, recognised body, or manager or employee or interest-holder in a recognised body breaches the section 43(2) order.
Legal Services Act 2007