Office of Public Sector Information
SCHEDULE 16 continued PART 1 continued
(3C) Regulations about the keeping of the register under section 10A may (among other things)—
(a) make provision about the form in which the register is to be kept and the manner in which entries are to be made, altered and removed;
(b) require information of a specified kind to be included in entries in the register;
(c) require information (or information of a specified description) on the register to be made available to the public;
(d) specify the manner in which it is to be made so available and require it to be made so available during office hours and without charge.
(3D) Regulations under this section may make provision for appeals to the High Court against decisions made by the Society under the regulations.
(3E) In relation to an appeal under regulations made by virtue of subsection (3D), the High Court may make such order as it thinks fit as to payment of costs.
(3F) The decision of the High Court on such an appeal shall be final.
(3G) Regulations under this section may—
(a) provide for a person to exercise a discretion in dealing with any matter;
(b) include incidental, supplementary and consequential provision;
(c) make transitory or transitional provision and savings;
(d) make provision generally or only in relation to specified cases or subject to specified exceptions;
(e) make different provision for different cases.”
(6) Omit subsections (4) and (5).
31 (1) Section 31 (rules as to professional practice, conduct and discipline) is amended as follows.
(2) In subsection (1)—
(a) for “Council may, if they think fit,” substitute “Society may”,
(b) omit “, with the concurrence of the Master of the Rolls,”,
(c) after “conduct” insert “, fitness to practise”,
(d) for “Council” (in the second place) substitute “Society”, and
(e) after “being” insert “, or have been,”.
(3) After that subsection insert—
“(1A) The powers conferred on the Society by subsection (1) include power to make, in relation to solicitors, provision of a kind which the Society would be prohibited from making but for section 157(5)(c) of the Legal Services Act 2007 (exception from prohibition on approved regulators making provision for redress).”
(4) Omit subsections (3) and (4).
32 (1) Section 32 (accounts rules and trust accounts rules) is amended as follows.
(2) In subsection (1)—
(a) for “Council” (in the first place) substitute “Society”,
(b) omit “, with the concurrence of the Master of the Rolls”,
(c) for paragraphs (a) and (b) substitute—
“(a) as to the opening and keeping by solicitors of accounts at banks or with building societies for money within subsection (1A);
(aa) as to the operation by solicitors of accounts kept by their clients or other persons at banks or with building societies or other financial institutions;
(b) as to the keeping by solicitors of accounts containing information as to money received, held or paid by them for or on account of their clients or other persons (including money received, held or paid under a trust); and”,
(d) in paragraph (c) of that subsection—
(i) for “Council” substitute “Society”,
(ii) for “them” substitute “it”, and
(iii) after “being” insert “, or have been,”, and
(e) omit from “and the rules” to the end.
(3) After that subsection insert—
“(1A) The money referred to in subsection (1) is money (including money held on trust) which is received, held or dealt with for clients or other persons.”
(4) Omit subsection (2).
(5) In subsection (4)—
(a) for “Council” substitute “Society”,
(b) omit “or (2)”, and
(c) after “solicitor” (in both places) insert “or any of his employees”.
(6) In subsection (5) for “by virtue” to the end substitute “or a part of the rules.”
(7) Omit subsection (6).
33 (1) Section 33 (interest on clients' money) is amended as follows.
(2) For subsection (1) substitute—
“(1) Rules under section 32 may require a solicitor to pay interest, or sums in lieu of and equivalent to interest, to a client, any other person or any trust, for whom the solicitor holds money.”
(3) In subsection (2), omit from “and the rules” to the end.
(4) For subsection (3) substitute—
“(3) Except as provided by the rules, a solicitor is not liable to account to any client, other person or trust for interest received by the solicitor on money held at a bank or building society in an account which is for money received or held for, or on account of—
(a) the solicitor’s clients, other persons or trusts, generally, or
(b) that client, person or trust, separately.”
(5) For subsection (4) substitute—
“(4) Rules under section 32 may—
(a) prescribe the circumstances in which a solicitor may make arrangements to limit or exclude an obligation imposed on the solicitor by rules made by virtue of this section, and
(b) prescribe the requirements to be met by and in relation to those arrangements.”
34 (1) Section 33A (inspection of practice bank accounts etc) is amended as follows.
(2) In subsection (1)—
(a) for “Council” (in each place) substitute “Society”, and
(b) omit “, with the concurrence of the Master of the Rolls,”.
(3) In subsection (2) for “Council” substitute “Society”.
35 (1) Section 34 (accountants' reports) is amended as follows.
(2) For subsections (1) to (5A) substitute—
“(1) The Society may make rules requiring solicitors to provide the Society with reports signed by an accountant (in this section referred to as an “accountant’s report”) at such times or in such circumstances as may be prescribed by the rules.
(2) The rules may specify requirements to be met by, or in relation to, an accountant’s report (including requirements relating to the accountant who signs the report).”
(3) In subsection (6) for “this section or of any rules made under it” substitute “any rules made under this section”.
(4) Omit subsections (7) and (8).
(5) At the end insert—
“(9) Where an accountant, during the course of preparing an accountant’s report—
(a) discovers evidence of fraud or theft in relation to money held by a solicitor for a client or any other person (including money held on trust) or money held in an account of a client of a solicitor, or an account of another person, which is operated by the solicitor, or
(b) obtains information which the accountant has reasonable cause to believe is likely to be of material significance in determining whether a solicitor is a fit and proper person to hold money for clients or other persons (including money held on trust) or to operate an account of a client of the solicitor or an account of another person,
the accountant must immediately give a report of the matter to the Society.
(10) No duty to which an accountant is subject is to be regarded as contravened merely because of any information or opinion contained in a report under subsection (9).”
36 After section 34 insert—
(1) Rules made by the Society may provide for any rules made under section 31, 32, 33A or 34 to have effect in relation to employees of solicitors with such additions, omissions or other modifications as appear to the Society to be necessary or expedient.
(2) If any employee of a solicitor fails to comply with rules made under section 31 or 32, as they have effect in relation to the employee by virtue of subsection (1), any person may make a complaint in respect of that failure to the Tribunal.
(3) If any employee of a solicitor fails to comply with rules made under section 34, as they have effect in relation to the employee by virtue of subsection (1), a complaint in respect of that failure may be made to the Tribunal by or on behalf of the Society.
(1) Where rules made under section 32(1) have effect in relation to employees of solicitors by virtue of section 34A(1), section 85 applies in relation to an employee to whom the rules have effect who keeps an account with a bank or building society in pursuance of such rules as it applies in relation to a solicitor who keeps such an account in pursuance of rules under section 32.
(2) Subsection (3) applies where rules made under section 32—
(a) contain any such provision as is referred to in section 33(1), and
(b) have effect in relation to employees of solicitors by virtue of section 34A(1).
(3) Except as provided by the rules, an employee to whom the rules are applied is not liable to account to any client, other person or trust for interest received by the employee on money held at a bank or building society in an account which is for money received or held for, or on account of—
(a) clients of the solicitor, other persons or trusts, generally, or
(b) that client, person or trust, separately.
(4) Subsection (5) applies where rules made under section 33A(1) have effect in relation to employees of solicitors by virtue of section 34A(1).
(5) The Society may disclose a report on or information about the accounts of any employee of a solicitor obtained in pursuance of such rules for use—
(a) in investigating the possible commission of an offence by the solicitor or any employees of the solicitor, and
(b) in connection with any prosecution of the solicitor or any employees of the solicitor consequent on the investigation.
(6) Where rules made under section 34 have effect in relation to employees of solicitors by virtue of section 34A(1), section 34(9) and (10) apply in relation to such an employee as they apply in relation to a solicitor.”
37 For section 36 (compensation fund) substitute—
(1) The Society may make rules concerning the grant of compensation by the Society in respect of loss that a person has suffered, or is likely to suffer, as a result of—
(a) an act or omission of a solicitor or former solicitor;
(b) an act or omission of an employee or former employee of a solicitor or former solicitor;
(c) the exercise by the Society of any of its powers under Part 2 of Schedule 1.
(2) The rules may (among other things) make provision—
(a) as to the circumstances in which such grants may and may not be made;
(b) as to the form and manner in which a compensation claim is to be made;
(c) as to the procedure for determining compensation claims;
(d) for the making of grants in respect of a compensation claim before it is finally determined;
(e) for a grant to be made by way of loan in such circumstances and on such terms as may be prescribed in, or determined in accordance with, the rules;
(f) for a grant to be made by way of making good a deficiency in monies held in trust by the Society under paragraph 6 or 6A of Schedule 1;
(g) as to the minimum and maximum grants payable in respect of a compensation claim (or a claim of a prescribed description);
(h) for the Society to be subrogated, to such extent as may be prescribed, to any rights and remedies of a person to whom a grant is made in relation to the loss in respect of which the grant is made.
(3) The circumstances which may be prescribed by virtue of subsection (2)(a) include in particular—
(a) the nature of the loss;
(b) in a case within subsection (1)(a) or (b), the nature of the act or omission.
(4) For the purposes of subsection (2)(f), there is a deficiency if the monies mentioned in that subsection are insufficient to satisfy the claims of all persons with a beneficial interest in the monies.
(5) The Society may prepare and publish guidance as to the criteria it will apply in deciding whether to make a grant in respect of a compensation claim, or any part of a compensation claim.
(6) Where the Society decides—
(a) not to make a grant in respect of a compensation claim or any part of a compensation claim, or
(b) to make a grant of less than the amount claimed,
it must give reasons for its decision.
(7) Rules under subsection (1) which are not regulatory arrangements within the meaning of the Legal Services Act 2007 are to be treated as such arrangements for the purposes of that Act.
(8) In this section—
“compensation claim” means a claim for the Society to make a grant of the kind mentioned in subsection (1);
“prescribed” means prescribed in rules under subsection (1).
(1) Compensation rules may require or authorise the Society to establish or maintain a fund or funds (“compensation funds”) for the purpose of making grants in respect of compensation claims.
(2) Compensation rules may require solicitors, or solicitors of a description prescribed in the rules, to make contributions to compensation funds of such amounts, at such times and in such circumstances, as may be prescribed in or determined in accordance with the rules.
(3) Any amount payable by virtue of such a requirement may be recovered as a debt due to the Society.
(4) Subsection (2) does not apply to a solicitor who is a Crown Prosecutor.
(5) The Society may invest any money which forms part of a compensation fund in any investments in which trustees may invest under the general power of investment in section 3 of the Trustee Act 2000 (as restricted by sections 4 and 5 of that Act).
(6) The Society may insure with authorised insurers, in relation to compensation funds, for such purposes and on such terms as it considers appropriate.
(7) The Society may, in such circumstances and subject to such conditions as may be prescribed in or determined in accordance with compensation rules—
(a) borrow for the purposes of a compensation fund;
(b) charge investments which form part of a compensation fund as security for borrowing by the Society for the purposes of that fund.
(8) A compensation fund may be applied by the Society for the purposes mentioned in subsection (9) (in addition to the making of grants in respect of compensation claims).
(9) The purposes are—
(a) payment of premiums on insurance policies effected under subsection (6);
(b) repayment of money borrowed by the Society for the purposes of the fund and payment of interest on any money so borrowed;
(c) payment of any other costs, charges or expenses incurred by the Society in establishing, maintaining, protecting administering or applying the fund;
(d) payment of any costs, charges or expenses incurred by the Society in exercising its powers under Part 2 of Schedule 1;
(e) payment of any costs or damages incurred by the Society, its employees or agents as a result of proceedings against it or them for any act or omission of its or theirs in good faith and in the exercise or purported exercise of such powers.
(10) In this section—
“compensation claim” has the same meaning as in section 36;
“compensation fund” has the meaning given by subsection (1);
“compensation rules” means rules under section 36(1).”
38 In section 37 (professional indemnity)—
(a) in subsection (1) for “Council, with the concurrence of the Master of the Rolls,” substitute “Society”, and
(b) in subsection (3)(h)—
(i) for “Council” substitute “Society”,
(ii) for “they consider” substitute “it considers”, and
(iii) after “being” insert “, or have been,”.
39 Omit section 37A (redress for inadequate professional services).
40 Omit section 40 (solicitor not to commence or defend actions while in prison).
41 (1) Section 41 (employment by solicitor of person struck off or suspended) is amended as follows.
(2) After subsection (1A) insert—
“(1B) Where—
(a) a solicitor (“the employed solicitor”) is employed by another solicitor in accordance with a written permission granted under this section, and
(b) the employed solicitor is disqualified from practising as a solicitor by reason of a fact mentioned in subsection (1)(b) or (c),
section 20(1) does not apply in relation to anything done by the employed solicitor in the course of that employment.”
(3) In subsection (3)—
(a) for “Master of the Rolls who” substitute “High Court which”, and
(b) in paragraph (b) for “he” substitute “it”.
(4) In subsection (4) for “shall” to the end substitute “may—
(a) order that his name be struck off the roll,
(b) order that he be suspended from practice for such period as the Tribunal or court thinks fit, or
(c) make such other order in the matter as it thinks fit.”
(5) After that subsection insert—
“(4A) In relation to an appeal under subsection (3) the High Court may make such order as it thinks fit as to payment of costs.
(4B) The decision of the High Court on an appeal under subsection (3) shall be final.”
(6) Omit subsection (5).
42 (1) Section 43 (control of solicitors' employees and consultants) is amended as follows.
(2) For subsections (1), (1A) and (2) substitute—
“(1) Where a person who is or was involved in a legal practice but is not a solicitor—
(a) has been convicted of a criminal offence which is such that in the opinion of the Society it would be undesirable for the person to be involved in a legal practice in one or more of the ways mentioned in subsection (1A), or
(b) has, in the opinion of the Society, occasioned or been a party to, with or without the connivance of a solicitor, an act or default in relation to a legal practice which involved conduct on his part of such a nature that in the opinion of the Society it would be undesirable for him to be involved in a legal practice in one or more of the ways mentioned in subsection (1A),
the Society may either make, or make an application to the Tribunal for it to make, an order under subsection (2) with respect to that person.
(1A) A person is involved in a legal practice for the purposes of this section if the person—
(a) is employed or remunerated by a solicitor in connection with the solicitor’s practice;
(b) is undertaking work in the name of, or under the direction or supervision of, a solicitor;
(c) is employed or remunerated by a recognised body;
(d) is employed or remunerated by a manager or employee of a recognised body in connection with that body’s business;
(e) is a manager of a recognised body;
(f) has or intends to acquire an interest in such a body.
(2) An order made by the Society or the Tribunal under this subsection is an order which states one or more of the following—
(a) that as from the specified date—
(i) no solicitor shall employ or remunerate, in connection with his practice as a solicitor, the person with respect to whom the order is made,
(ii) no employee of a solicitor shall employ or remunerate, in connection with the solicitor’s practice, the person with respect to whom the order is made,
(iii) no recognised body shall employ or remunerate that person, and
(iv) no manager or employee of a recognised body shall employ or remunerate that person in connection with the business of that body,
except in accordance with a Society permission;
(b) that as from the specified date no recognised body or manager or employee of such a body shall, except in accordance with a Society permission, permit the person with respect to whom the order is made to be a manager of the body;
(c) that as from the specified date no recognised body or manager or employee of such a body shall, except in accordance with a Society permission, permit the person with respect to whom the order is made to have an interest in the body.
(2A) The Society may make regulations prescribing charges to be paid to the Society by persons who are the subject of an investigation by the Society as to whether there are grounds for the Society—
(a) to make an order under subsection (2), or
(b) to make an application to the Tribunal for it to make such an order.
(2B) Regulations under subsection (2A) may—
(a) make different provision for different cases or purposes;
(b) provide for the whole or part of a charge payable under the regulations to be repaid in such circumstances as may be prescribed by the regulations.
(2C) Any charge which a person is required to pay under regulations under subsection (2A) is recoverable by the Society as a debt due to the Society from the person.”
(3) In subsection (5) omit—
(a) “by any solicitor”, and
(b) the words from “but” to the end.
(4) After that subsection insert—
“(5A) In this section—
“manager”, in relation to a recognised body, has the same meaning as it has in relation to a body in the Legal Services Act 2007 (see section 207 of that Act);
“recognised body” means a body recognised under section 9 of the Administration of Justice Act 1985;
“specified date” means such date as may be specified in the order;
“Society permission” means permission in writing granted by the Society for such period and subject to such conditions as the Society may think fit to specify in the permission.
(5B) A person has an interest in a recognised body for the purposes of this section if the person has an interest in that body within the meaning of Part 5 of the Legal Services Act 2007 (see sections 72 and 109 of that Act).”
43 In section 44 (offences in connection with orders under section 43(2))—
(a) for subsection (1) substitute—
“(1) It is an offence for a person in respect of whom there is in force an order under section 43(2) which contains provision within section 43(2)(a)—
(a) to seek or accept any employment or remuneration from a solicitor, or an employee of a solicitor, in connection with the practice carried on by that solicitor without previously informing the solicitor or employee of the order;
(b) to seek or accept any employment or remuneration from a recognised body, or a manager or employee of a recognised body, in connection with that body’s business, without previously informing the body, or manager or employee, of the order.
(1A) It is an offence for a person in respect of whom there is in force an order under section 43(2) which contains provision within section 43(2)(b) to seek or accept a position as a manager of a recognised body, without previously informing that body of the order.
(1B) It is an offence for a person in respect of whom there is in force an order under section 43(2) which contains provision within section 43(2)(c) to seek or accept an interest in a recognised body from any person, without previously informing that person and (if different) the recognised body of the order.
(1C) A person guilty of an offence under subsection (1), (1A) or (1B) is liable on summary conviction to a fine not exceeding level 3 on the standard scale.”,
(b) in subsection (2) for “the employment of that person” substitute “the taking of any action”, and
(c) after subsection (4) insert—
“(5) In this section—
“manager” has the same meaning as in section 43;
“recognised body” means a body recognised under section 9 of the Administration of Justice Act 1985;
and for the purposes of subsection (1B) a person seeks or accepts an interest in a recognised body if the person seeks or accepts an interest which if it were obtained by the person would result in the person having an interest in that body within the meaning of Part 5 of the Legal Services Act 2007 (see sections 72 and 109 of that Act).”
44 For section 44B (examination of files) substitute—
(1) The Society may by notice require a person to whom this section applies—
(a) to provide information, or information of a description, specified in the notice, or
(b) produce documents, or documents of a description, specified in the notice.
(2) This section applies to—
(a) a solicitor;
(b) an employee of a solicitor;
(c) a recognised body;
(d) an employee or manager of, or a person with an interest in, a recognised body.
(3) The Society may give a notice under this section only if it is satisfied that it is necessary to do so for the purpose of investigating—
(a) whether there has been professional misconduct by a solicitor;
(b) whether a solicitor, or an employee of a solicitor, has failed to comply with any requirements imposed by or by virtue of this Act or any rules made by the Society;
(c) whether a recognised body, or any of its managers or employees has failed to comply with any requirement imposed by or by virtue of the Administration of Justice Act 1985 or any rules made by the Society and applicable to the body, manager or employee by virtue of section 9 of that Act;
(d) whether there are grounds for making, or making an application to the Tribunal for it to make, an order under section 43(2) with respect to a person who is or was involved in a legal practice (within the meaning of section 43(1A)).
(4) A notice under this section—
(a) may specify the time and place at which, and manner and form in which, the information is to be provided or document is to be produced;
(b) must specify the period within which the information is to be provided or the document produced;
(c) may require the information to be provided or document to be produced to the Society or to a person specified in the notice.
Legal Services Act 2007