PART 4 continued
(7) The Lord Chancellor may make an order under this section only if—
(a) the Board has made a recommendation in accordance with section 47, 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 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—
(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 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 payable by a licensed body to its licensing authority under licensing rules.
(1) The Board may recommend to the Lord Chancellor that the Lord Chancellor make an order under section 46 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 publish a draft of—
(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 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 for those changes.
(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 45.
(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—
(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 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 Lord Chancellor must make regulations—
(a) specifying further matters which a judge or justice of the peace must be 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 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.
(8) But the Lord Chancellor may not make regulations under subsection (6) unless—
(a) they are made in accordance with a recommendation made by the Board, or
(b) the Lord Chancellor 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—
“authorised by the former regulator”, “protected activity” and “new regulator” have the same meaning as for the purposes of section 46;
“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.
(1) The Board must prepare and issue a statement of policy with respect to the exercise of its functions under—
(a) section 31 (performance targets and monitoring);
(b) section 32 (directions);
(c) section 35 (public censure);
(d) section 37 (financial penalties);
(e) section 41 (intervention directions);
(f) section 45 (cancellation of designation as approved regulator);
(g) section 76 (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) In preparing a statement of policy, the Board must have regard to the principle that its principal role is the oversight of approved regulators.
(4) The statement of policy prepared under subsection (1) must—
(a) take account of the desirability of resolving informally matters which arise between the Board and an approved regulator, and
(b) specify how, in exercising the functions mentioned in that subsection, the Board will comply with the requirements of section 3(3) (regulatory activities to be proportionate, consistent and targeted only at cases in which action is needed, etc),
and, in preparing that statement, the Board must have regard to the principle that the Board should not exercise any of those functions by reason of an act or omission of an approved regulator unless the act or omission was unreasonable.
(5) The Board’s policy in determining what the amount of a penalty under section 37 should be must include having regard to—
(a) the seriousness of the failure in question, and
(b) the extent to which it was deliberate or reckless.
(6) The Board may at any time alter or replace any statement issued under this section.
(7) If a statement is altered or replaced, the Board must issue the altered or replacement statement.
(8) 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.
(9) The Board must publish a statement issued under this section.
(10) The Board may make a reasonable charge for providing a person with a copy of a statement.
(1) Before issuing a statement under section 49, the Board must publish a draft of the proposed statement.
(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 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).
(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 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 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
(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 173;
(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;
(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.
(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—
(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 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—
(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.
(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.
(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 53, a regulatory conflict is a conflict between—
(a) a requirement of the approved regulator’s regulatory arrangements, 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.
(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 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.
(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.
(2) An application under this section is an application made to the Board for the Board to exercise its powers under section 32 to direct the conflicting 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 applicant 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.
(3) An approved regulator must consider any request made by an affected person—
(a) for the approved regulator to reconsider the provision made by its regulatory arrangements to prevent a regulatory conflict with another approved regulator, or
(b) for the approved regulator to make an application under this section.
(4) An “affected person”, in relation to an approved regulator, means—
(a) a person authorised by the approved regulator to carry on a reserved legal activity;
(b) an employee or manager of such a person.
(5) Where an application is made under this section, the Board—
(a) must give the applicant regulator and the conflicting regulator an opportunity to make representations, and
(b) may consult any persons it considers appropriate.
(6) The Board must decide whether or not to give a warning notice in response to the application.
(7) The Board must make that decision before the end of the period of 6 months beginning with the day on which the application is received by it.
(8) The Board must give notice of its decision, and the reasons for it, to the applicant regulator and the conflicting regulator.
(9) For the purposes of this section “warning notice” means a notice given under paragraph 2(1) of Schedule 7 (warning of proposed direction under section 32).
(1) The regulatory arrangements of an approved regulator must make such provision as is reasonably practicable and, in all the circumstances, appropriate—
(a) to prevent external regulatory conflicts,
(b) to provide for the resolution of any external regulatory conflicts which arise, and
(c) to prevent unnecessary duplication of regulatory provisions made by an external regulatory body.
(2) For the purposes of this section, an external regulatory conflict is a conflict between—
(a) a requirement of the regulatory arrangements of the approved regulator, and
(b) a requirement of any regulatory provision made by an external regulatory body.
(3) For this purpose “external regulatory body” means a person (other than an approved regulator) who exercises regulatory functions in relation to a particular description of persons with a view to ensuring compliance with rules (whether statutory or non-statutory) by those persons.
(4) Regulatory arrangements made for the purposes of subsection (1)(b) may, with the consent of the Board, provide for the Board to exercise functions in connection with the resolution of conflicts.
(1) The Board may, by notice, require an approved regulator—
(a) to provide any information, or information of a description, specified in the notice, or
(b) to produce documents, or documents of a description, specified in the notice.
(2) A notice under subsection (1)—
(a) may specify the manner and form in which any information is to be provided;
(b) must specify the period within which any information is to be provided or document is to be produced;
(c) may require any information to be provided, or document to be produced, to the Board or to a person specified in the notice.
(3) The Board may, by notice, require a person representing the approved regulator to attend at a time and place specified in the notice to provide an explanation of any information provided or document produced under this section.
(4) The Board may pay to any person such reasonable costs as may be incurred by that person in connection with—
(a) the provision of any information, or the production of any document, by that person pursuant to a notice under subsection (1), or
(b) that person’s compliance with a requirement imposed under subsection (3).
(5) The Board, or a person specified under subsection (2)(c), may take copies of or extracts from a document produced pursuant to a notice under subsection (1).
(6) For the purposes of this section and section 56, references to an approved regulator include a body which was, but is no longer, an approved regulator.
(1) Where an approved regulator is unable to comply with a notice given to it under section 55(1), it must give the Board a notice to that effect stating the reasons why it cannot comply.
(2) If an approved regulator refuses, or otherwise fails, to comply with a notice under section 55(1), the Board may apply to the High Court for an order requiring the approved regulator to comply with the notice or with such directions for the like purpose as may be contained in the order.
(3) This section applies in relation to a person to whom a notice is given under section 55(3) as it applies in relation to an approved regulator to whom a notice is given under section 55(1).
(1) If the OFT is of the opinion that the regulatory arrangements of an approved regulator (or any part of them) prevent, restrict or distort competition within the market for reserved legal services to any significant extent, or are likely to do so, the OFT may prepare a report to that effect.
(2) A report under subsection (1)—
(a) must state what, in the OFT’s opinion, is the effect, or likely effect, on competition of the regulatory arrangements or part of them to which the report relates, and
(b) may contain recommendations as to the action which the Board should take for the purpose of ensuring that the regulatory arrangements of the approved regulator do not prevent, restrict or distort competition.
(3) Where the OFT makes a report under subsection (1), it must—
(a) give a copy of the report to the Board, the Consumer Panel and the approved regulator, and
(b) publish the report.
(4) Before publishing a report under subsection (3)(b), the OFT must, so far as practicable, exclude any matter which relates to the private affairs of a particular individual the publication of which, in the opinion of the OFT, would or might seriously and prejudicially affect the interests of that individual.
(5) The OFT may exercise any of the powers conferred on it by section 174(3) to (5) of the Enterprise Act 2002 (c. 40) (investigation powers) for the purpose of assisting it in exercising its functions under this section.
(6) For the purposes of the law of defamation, absolute privilege attaches to any report of the OFT under this section.
(1) This section applies where a report is made by the OFT under section 57 in respect of an approved regulator.
(2) The Board must allow the approved regulator a period of 28 days beginning with the day on which the copy of the report is given to the approved regulator under section 57, or such longer period as the Board may specify in a particular case, to make representations to the Board about the OFT’s report.
(3) The Consumer Panel may give the Board such advice as the Consumer Panel thinks fit regarding the OFT’s report.
(4) Having considered any representations made under subsection (2) and any advice given under subsection (3), the Board must notify the OFT of the action (if any) it proposes to take in response to the report.
(1) This section applies where the OFT is satisfied that the Board has failed to give full and proper consideration to a report made by the OFT, in respect of an approved regulator, under section 57.
(2) The OFT may give a copy of its report to the Lord Chancellor.
(3) The OFT must notify the Board and the approved regulator if it gives a copy of its report to the Lord Chancellor.
(4) On receiving a report under subsection (2), the Lord Chancellor must—
(a) give the Competition Commission a copy of the report, and
(b) seek its advice on what action (if any) should be taken by the Lord Chancellor under section 61.
(1) Where the Lord Chancellor seeks the advice of the Competition Commission under section 59, the Commission must investigate the matter.
(2) The Commission must then make its own report on the matter unless it considers that, as a result of any change of circumstances, no useful purpose would be served by a report.
(3) If the Commission decides in accordance with subsection (2) not to make a report, it must make a statement setting out the change of circumstances which resulted in that decision.
(4) The Commission must comply with subsection (2) or (3) within the period of 3 months beginning with the day on which it receives a copy of the OFT’s report under section 59(4)(a).
(5) A report made under this section must state the Commission’s conclusion as to whether any of the matters which is the subject of the report has or is likely to have the effect of preventing, restricting or distorting competition within the market for reserved legal services to a significant extent.
(6) A report under this section stating the Commission’s conclusion that there is, or is likely to be, such an effect must also—
(a) state whether or not the Commission considers that that effect is justified, and
(b) if it states that the Commission considers that it is not justified, state its conclusion as to what action, if any, ought to be taken by the Board.
(7) When determining under subsection (6)(b) any action to be taken by the Board, the Commission must ensure—
(a) that the action stated is action which the Board has power to take, and
(b) so far as reasonably possible, that the action stated is compatible with the functions conferred, and obligations imposed, on the Board by or under this Act.
(8) A report under this section must contain such an account of the Commission’s reasons for its conclusions as is expedient, in the opinion of the Commission, for facilitating proper understanding of them.
(9) Sections 109 to 115 of the Enterprise Act 2002 (c. 40) (investigation powers) apply in relation to an investigation under this section as they apply in relation to an investigation made on a reference made to the Commission under Part 3 of that Act (mergers), but as if—
(a) in section 110(4) of that Act, the reference to the publication of the report of the Commission on the reference concerned were a reference to the Commission making a report under subsection (2) or a statement under subsection (3), and
(b) in section 111(5)(b)(ii) of that Act the day referred to were the day on which the Commission makes that report or statement.
(10) If the Commission makes a report or a statement under this section it must—
(a) give a copy to the Lord Chancellor, the Board, the Consumer Panel and the approved regulator to which the OFT’s report relates, and
(b) publish the report or statement.
(1) The Lord Chancellor may direct the Board to take such action as the Lord Chancellor considers appropriate in connection with any matter raised in a report made by the OFT under section 57.
(2) Before giving a direction under subsection (1), the Lord Chancellor must consider any report from the Competition Commission under section 60 on that matter.
(3) When exercising the power to give a direction under subsection (1), the Lord Chancellor must ensure—
(a) that the action stated is action which the Board has power to take, and
(b) so far as reasonably possible, that the action stated in any direction is compatible with the functions conferred, and obligations imposed, on the Board by or under this Act.
(4) The Lord Chancellor must publish a direction given under this section.
(1) The Lord Chancellor may by order—
(a) designate the Board as an approved regulator in relation to one or more reserved legal activities;
(b) modify the functions of the Board, and make such other provision relating to those functions as the Lord Chancellor considers necessary or expedient, with a view to enabling the Board to discharge its functions as an approved regulator effectively and efficiently;
(c) cancel the Board’s designation as an approved regulator in relation to one or more reserved legal activities.
(2) But the Lord Chancellor may make an order under subsection (1) only if—
(a) the Board has made a recommendation in accordance with section 66, 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.
(3) If the Lord Chancellor decides not to make an order pursuant to a recommendation made under section 66, the Lord Chancellor must—
(a) give the Board a notice stating the reasons for that decision, and
(b) publish the notice.
(4) In discharging its functions as an approved regulator the Board must take such steps as are necessary to ensure an appropriate financial and organisational separation between the activities of the Board that relate to the carrying out of those functions and the other activities of the Board.
(5) An order under this section may make such modifications of provision made by or under any enactment (including this Act or any Act passed after this Act) as the Lord Chancellor considers necessary or expedient.
(1) This section applies in relation to an order under section 62(1)(a) (an order designating the Board as an approved regulator).
(2) Subject to subsection (3), the order may designate the Board as an approved regulator in relation to a reserved legal activity only where—
(a) a body’s designation as an approved regulator in relation to the activity is cancelled under section 45, or
(b) the activity becomes a reserved legal activity by virtue of an order under section 24.
(3) Subsection (2) does not prevent the order having effect in advance of an event within paragraph (a) or (b) of that subsection for the purpose of enabling the Board to authorise persons to carry on activities which constitute the reserved legal activity in question with effect from the occurrence of the event.
(4) The order must ensure that the Board, acting as an approved regulator, may make regulatory arrangements or modify its regulatory arrangements only with the approval of the Board (acting otherwise than in its capacity as an approved regulator or as a licensing authority under Part 5).
(1) This section applies in relation to an order under section 62(1)(b) (an order modifying the functions of the Board).
(2) The order may include (among other things) provision conferring on the Board powers to do any of the following—
(a) to authorise (otherwise than by the grant of a licence under Part 5) 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 Board is designated as an approved regulator;
(b) to make qualification regulations;
(c) to make provision as to the educational, training and other requirements to be met by regulated persons who are not relevant authorised persons;
(d) to make practice rules and conduct rules;
(e) to make disciplinary arrangements in relation to regulated persons (including discipline rules);
(f) to make rules requiring the payment of fees specified in or determined in accordance with the rules;
(g) to make indemnification arrangements;
(h) to make compensation arrangements;
(i) to make rules as to the treatment of money (including money held in trust) which is received, held or dealt with for clients, or other persons, by regulated persons, and as to the keeping by such persons of accounts in respect of such money;
(j) to take steps for the purpose of ascertaining whether or not the provisions of rules or regulations made, or any code or guidance issued, by the Board in its capacity as an approved regulator are being complied with, and to make rules requiring relevant authorised persons to produce documents and provide information for that purpose;
(k) to delegate any of the functions exercisable by the Board in its capacity as an approved regulator to such persons as it considers appropriate;
(l) to make regulations or rules providing for appeals to the High Court or another body against decisions made by the Board in its capacity as an approved regulator (including regulations or rules providing for a decision on such an appeal to be final and for orders as to payment of costs).