Legalize / United Kingdom / Public General Act

Legal Services Act 2007

Type Public General Act

Publication 2007-10-30

Last updated 2025-01-01

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(3) If the licensing authority proposes to object to a person's holding of the restricted interest, it must give the person and the licensed body a warning notice.

(4) But the licensing authority may object to the person's holding of the restricted interest without giving a warning notice if it considers it necessary or desirable to do so for the purpose of protecting any of the regulatory objectives.

(5) The warning notice must—

(a) specify the reasons for the proposed objection, and

(b) state that representations may be made to the licensing authority within the prescribed period.

(6) The licensing authority must consider any representations made within the prescribed period.

(7) If the licensing authority objects to the person's holding of the restricted interest, it must notify the person and the licensed body of its objection as soon as reasonably practicable.

(8) The notice must—

(a) specify the reasons for the objection, and

(b) explain the effect of Part 5 of this Schedule.

37

(1) The person and the licensed body may before the end of the prescribed period appeal to the relevant appellate body against the objection.

(2) The relevant appellate body may dismiss or allow the appeal.

(3) If the relevant appellate body allows the appeal it may also—

(a) order the licensing authority to impose under paragraph 33 such conditions on the person's holding of the restricted interest as may be specified in the order, or

(b) remit the matter to the licensing authority.

(4) A party to the appeal may before the end of the prescribed period appeal to the High Court on a point of law arising from the decision of the relevant appellant body, but only with the permission of the High Court.

(5) The High Court may make such order as it thinks fit.

(6) If the person's holding of the restricted interest is subject to conditions as a result of an order made on an appeal under this paragraph, for the purposes of this Schedule the conditions are to be treated as having been imposed under paragraph 33.

Part 4 — Additional restrictions

38

(1) Licensing rules may provide that—

(a) a non-authorised person may not have a shareholding in a licensed body, or in a parent undertaking of a licensed body, which exceeds a limit specified in the rules (“the share limit”);

(b) a non-authorised person may not have an entitlement to exercise, or control the exercise of, voting rights in a licensable body, or a parent undertaking of a licensable body, which exceeds a limit specified in the rules (“the voting limit”);

(c) the total proportion of shares in a licensed body, or a parent undertaking of a licensed body, held by non-authorised persons may not exceed a limit specified in the rules;

(d) the total proportion of voting rights in a licensed body, or a parent undertaking of a licensed body, which non-authorised persons are entitled to exercise or control the exercise of, may not exceed a limit specified in the rules.

(2) Rules made under any paragraph of sub-paragraph (1) in relation to a licensed body and a parent undertaking may specify different limits in relation to the licensed body and the parent undertaking.

(3) Licensing rules made under sub-paragraph (1)(a) or (b) may provide that references in those rules to a person, in relation to a person's shareholding or entitlement to exercise or control the exercise of voting rights, are to—

(a) the person,

(b) any of the person's associates, or

(4) In relation to a licensed body which is a partnership, for the purposes of section 34 of the Partnership Act 1890 (c. 39) (dissolution by illegality) a breach of licensing rules made under sub-paragraph (1) does not make it unlawful for the business of the partnership to be carried on, or for the partners to carry it on in partnership.

39

(1) This paragraph applies in relation to a licensed body, or a parent undertaking of a licensed body, if licensing rules made by the relevant licensing authority make the provision mentioned in paragraph 38(1)(a) or (b) in relation to the body.

(2) Any non-authorised person who acquires—

(a) a shareholding in the body which exceeds the share limit, or

(b) an entitlement to exercise, or control the exercise of, voting rights in the body which exceeds the voting limit,

must notify the body (and, if the body is a parent undertaking of a licensed body, the licensed body) and the licensing authority of the acquisition within such period, after the person becomes aware of it, as may be specified by order made by the Lord Chancellor on the recommendation of the Board.

(3) It is an offence for a person to fail to comply with a requirement imposed by sub-paragraph (2).

(4) A person who is guilty of an offence under sub-paragraph (3) is liable on summary conviction to a fine not exceeding level 5 on the standard scale.

(5) It is a defence for a person charged with an offence under sub-paragraph (3) to show that at the time of the alleged offence the person had no knowledge of the facts by virtue of which the duty to notify arose.

40

(1) This paragraph applies if a person under the duty to notify imposed by paragraph 39(2)—

(a) had no knowledge of the facts by virtue of which that duty arose, but

(b) subsequently becomes aware of those facts.

(2) The person must give the body (and, if the body is a parent undertaking of a licensed body, the licensed body) and the licensing authority the required notification within such period, after the person becomes so aware, as may be specified by order made by the Lord Chancellor on the recommendation of the Board.

(3) A person who fails to comply with the duty to notify imposed by sub-paragraph (2) is guilty of an offence.

(4) A person who is guilty of an offence under sub-paragraph (3) is liable on summary conviction to a fine not exceeding level 5 on the standard scale.

Part 5 — Enforcement

Divestiture

The divestiture condition

41

(1) The divestiture condition is satisfied in relation to a non-authorised person and a licensed body if—

(a) the person holds a restricted interest in the licensed body in the circumstances mentioned in sub-paragraph (2), and

(b) the person holds that interest, in whole or in part, by virtue of the person's shareholding in a body corporate with a share capital (in this Part of this Schedule referred to as “the relevant shares”).

(2) The circumstances are that the person holds the restricted interest—

(a) as a result of the person taking a step in circumstances in which that constitutes an offence under paragraph 24(1) (whether or not the person is charged with or convicted of an offence under that paragraph),

(b) in breach of conditions imposed under paragraph 17, 28, or 33, or

(3) In sub-paragraph (1)(b), references to a person's shareholding are to be read in accordance with paragraph 3(3) or 4(2) (as the case may be).

42

(1) If the relevant licensing rules make the provision mentioned in paragraph 38(1)(a) or (b), the divestiture condition is also satisfied in relation to a non-authorised person and a licensed body if—

(a) the person's shareholding in the body, or a parent undertaking of the body, exceeds the share limit, and the body or parent undertaking (as the case may be) is a body corporate with a share capital, or

(b) the person's entitlement to exercise or control the exercise of voting rights in the body, or a parent undertaking of the body, exceeds the voting limit by virtue of the person holding shares in a body corporate with a share capital.

(2) In this Part of this Schedule, “excess shares” means

(a) in a case within sub-paragraph (1)(a), the number of shares by which the person's shareholding exceeds the share limit, and

(b) in a case within sub-paragraph (1)(b), the number of shares held by the person in excess of the number of shares the person could hold without the person's entitlement to exercise, or control the exercise of, voting rights exceeding the voting limit.

(3) References in this paragraph to a person's shareholding (or holding of shares) or entitlement are to be read in accordance with any applicable licensing rules made under paragraph 38(3).

Application for divestiture

43

(1) If the divestiture condition is satisfied in relation to a non-authorised person and a licensed body, the licensing authority may give the person a restriction notice under paragraph 44 and apply to the High Court for an order under paragraph 45.

(2) The licensing authority may not make an application to the High Court for an order under paragraph 45 unless—

(a) it has notified the person that it intends to do so if the divestiture condition is satisfied in relation to the person and the body at the end of the relevant period, and

(b) the relevant period has expired.

(3) The relevant period is such period (not less than the prescribed period) as may be specified in the notice.

Restriction notice

44

(1) A restriction notice is a notice directing that such of the relevant shares or excess shares (as the case may be) as are specified in the notice are, until further notice, subject to one or more of the following restrictions.

(2) The restrictions are—

(a) a transfer of (or agreement to transfer) those shares, or in the case of unissued shares a transfer of (or agreement to transfer) the right to be issued with them, is void;

(b) no voting rights are to be exercisable in respect of the shares;

(d) except in a liquidation, no payment is to be made of any sums due from the company on the shares, whether in respect of capital or otherwise.

(3) A copy of the restriction notice must be given to the body to whose shares it relates.

(4) A restriction notice ceases to have effect—

(a) in accordance with an order of the High Court under paragraph 45(4);

(b) if no application has been made to the High Court for an order under paragraph 45 before the end of such period as may be prescribed, at the end of that period;

Divestiture by High Court

45

(1) If the divestiture condition is satisfied by virtue of paragraph 41 the High Court may, on the application of the licensing authority, order the sale of the appropriate number of the relevant shares.

(2) The appropriate number of the relevant shares is the number of those shares, the sale of which will result in the non-authorised person no longer holding—

(a) a restricted interest in the licensed body, or

(b) if the non-authorised person holds more than one kind of restricted interest, a restricted interest the person's holding of which is within paragraph 41(2).

(3) If the divestiture condition is satisfied by virtue of paragraph 42 the High Court may, on the application of the licensing authority, order the sale of the excess shares.

(4) If shares are for the time being subject to any restriction under paragraph 44, the court may order that they are to cease to be subject to that restriction.

(5) If the divestiture condition is satisfied by virtue of paragraph 41(2)(b) or (c), no order may be made under sub-paragraph (1) or (4)—

(a) until the end of the period within which an appeal may be made against the imposition of the conditions or the objection, or

(b) if an appeal is made, until the appeal has been determined or withdrawn.

(6) If an order has been made under sub-paragraph (1) or (3) the court may, on the application of the licensing authority, make such further order relating to the sale or transfer of the shares as it thinks fit.

(7) If shares are sold in pursuance of an order under this paragraph, the proceeds of sale, less the costs of sale, must be paid into court for the benefit of the persons beneficially interested in them.

(8) Any such person may apply to the court for the whole or part of the proceeds to be paid to the person.

Conditions

Enforcement of conditions

46

(1) If a person holds a restricted interest in a licensed body in breach of conditions imposed under paragraph 17, 28 or 33, the licensing authority may make an application to the High Court for an order under this paragraph.

(2) The licensing authority may not make such an application unless—

(a) it has notified the person that it intends to do so if the conditions are not complied with before the end of the relevant period, and

(b) the relevant period has expired.

(3) The relevant period is such period (not less than the prescribed period) as may be specified in the notice.

(4) The High Court may, on the application of the licensing authority, make such order as the court thinks fit to secure compliance with the conditions to which the person's holding of the restricted interest is subject.

(5) No order may be made under this paragraph—

(a) until the end of the period within which an appeal may be made against the imposition of the conditions, or

(b) if an appeal is made, until the appeal has been determined or withdrawn.

Records of decisions

Duty to notify Board of decisions under this Schedule

47

(1) The relevant licensing authority must notify the Board where—

(a) it has objected under paragraph 19, 31, or 36 to a person's holding of a restricted interest, or

(b) it has imposed conditions under paragraph 17, 28, or 33 on a person's holding of a restricted interest.

(2) The notification must state—

(a) the reasons for the objection or imposition of conditions, and

(b) the kind of restricted interest to which the objection or conditions related.

(3) If the licensing authority takes any action under paragraph 43 in relation to a person notified to the Board under sub-paragraph (1), it must notify the Board of that fact.

(4) If there is an appeal to the relevant appellate body against the objection or imposition of conditions, the licensing authority must notify the Board of the outcome of that appeal (and any subsequent appeal to the High Court).

(5) If the licensing authority has imposed conditions on a person's holding of a restricted interest, it must notify the Board of any decision taken by it under paragraph 35 (variation and cancellation of conditions).

(6) The licensing authority must give the person and the licensed body concerned a copy of any notification it gives the Board under this paragraph.

48

(1) A licensing authority must notify the Board where under paragraph 16, 17, 27 or 28 it approves the holding of a restricted interest in a licensed body by a person included in the list kept by the Board under paragraph 51.

(2) The notification must state—

(a) if the approval was under paragraph 17 or 28, the conditions to which the approval was subject, and

(b) the reasons for the licensing authority's decision to approve the person's holding of the interest.

(3) If the approval was under paragraph 17 or 28 and there is an appeal to the relevant appellate body against the imposition of conditions, the licensing authority must notify the Board of the outcome of that appeal (and any subsequent appeal to the High Court).

(4) If the approval was under paragraph 17 or 28, the licensing authority must notify the Board of any decision taken by it under paragraph 35 (variation and cancellation of conditions).

(5) The licensing authority must give the person and the licensed body concerned a copy of any notification it gives the Board under this paragraph.

49

(1) This paragraph applies if the relevant licensing rules make the provision mentioned in paragraph 38(1)(a) or (b).

(2) The licensing authority may, if it considers it appropriate to do so in all the circumstances of the case, notify the Board where a non-authorised person acquires—

(a) a shareholding in a licensed body or parent undertaking of a licensed body which exceeds the share limit, or

(b) an entitlement to exercise, or control the exercise of, voting rights in a licensed body or parent undertaking of a licensed body which exceeds the voting limit.

(3) If the licensing authority proposes to make a notification under sub-paragraph (2), it must give the person and the licensed body a warning notice.

(4) The warning notice must—

(a) specify the reasons for the proposed notification, and

(b) state that representations may be made to the licensing authority within the prescribed period.

(5) The licensing authority must consider any representations made within the prescribed period.

(6) If the licensing authority notifies the Board under sub-paragraph (2), it must give the person concerned and the licensed body a copy of the notification and a notice stating the reasons for the notification.

(7) If the share limit or voting limit is breached in relation to a parent undertaking of a licensed body, references in sub-paragraphs (3) and (6) to the licensed body include the parent undertaking.

50

(1) The person concerned and the licensed body may before the end of the prescribed period appeal to the relevant appellate body against the notification.

(2) The relevant appellate body may—

(a) dismiss the appeal, or

(b) allow the appeal and order the person's name to be removed from the list kept by the Board under paragraph 51.

(3) A party to the appeal may before the end of the prescribed period appeal to the High Court on a point of law arising from the decision of the relevant appellant body, but only with the permission of the High Court.

(4) The High Court may make such order as it thinks fit.

(5) The licensing authority must notify the Board of the outcome of any appeal under this paragraph, and give the person concerned and the licensed body a copy of the notification.

(6) If the share limit or voting limit is breached in relation to a parent undertaking of a licensed body, references in sub-paragraphs (1) and (5) to the licensed body include the parent undertaking.

Board’s list of persons subject to objections and conditions

51

(1) The Board must keep a list of the persons in respect of which it receives a notification under paragraph 47(1) or 49(2).

(2) The list must record—

(a) in relation to a person notified to the Board under paragraph 47(1), the information included in the notification by virtue of paragraph 47(2) and any notification under paragraph 47(3), and

(b) in relation to any person included in the list, the information included in any notification relating to that person under paragraph 48.

(3) If the Board receives a notification under paragraph 47(4) or (5), 48(3) or (4) or 50(5) it must make such alterations to the list as it considers appropriate having regard to the decision of the licensing authority or the outcome of the appeal (which may include removing a person from the list).

(4) The Board must make the list kept by it under this paragraph available to every licensing authority.

SCHEDULE 14

Introductory

1

(1) This Schedule applies—

(a) where, in relation to a licensed body and the relevant licensing authority, one or more of the intervention conditions is satisfied;

(b) where a licence granted to a body has expired (and has not been renewed or replaced by the relevant licensing authority).

(2) The intervention conditions are—

(a) that the licensing authority is satisfied that one or more of the terms of the licensed body's licence have not been complied with;

(b) that a person has been appointed receiver or manager of property of the licensed body;

(d) that the licensing authority has reason to suspect dishonesty on the part of any manager or employee of the licensed body in connection with—

(i) that body's business,

(ii) any trust of which that body is or was a trustee,

(iii) any trust of which the manager or employee of the body is or was a trustee in that person's capacity as such a manager or employee, or

(iv) the business of another body in which the manager or employee is or was a manager or employee, or the practice (or former practice) of the manager or employee;

(e) that the licensing authority is satisfied that there has been undue delay—

(i) on the part of the licensed body in connection with any matter in which it is or was acting for a client or with any trust of which it is or was a trustee, or

(ii) on the part of a person who is or was a manager or employee of the licensed body in connection with any trust of which that person is or was a trustee in that person's capacity as such a manager or employee,

and the notice conditions are satisfied;

(f) that the licensing authority is satisfied that it is necessary to exercise the powers conferred by this Schedule (or any of them) in relation to a licensed body to protect—

(i) the interests of clients (or former or potential clients) of the licensed body,

(ii) the interests of the beneficiaries of any trust of which the licensed body is or was a trustee, or

(iii) the interests of the beneficiaries of any trust of which a person who is or was a manager or employee of the licensed body is or was a trustee in that person's capacity as such a manager or employee.

(3) For the purposes of sub-paragraph (2) a relevant insolvency event occurs in relation to a licensed body if—

(a) a resolution for a voluntary winding-up of the body is passed without a declaration of solvency under section 89 of the Insolvency Act 1986 (c. 45);

(b) the body enters administration within the meaning of paragraph 1(2)(b) of Schedule B1 to that Act;

(d) a winding up becomes a creditors’ voluntary winding up under section 96 of that Act (conversion to creditors’ voluntary winding up);

(e) an order for the winding up of the body is made.

(4) The notice conditions referred to in sub-paragraph (2)(e) are—

(a) that the licensing authority has given the licensed body a notice inviting it to give an explanation within such period (of not less than 8 days) following the giving of the notice as may be specified in it;

(b) that the licensed body has failed within that period to give an explanation which the licensing authority regards as satisfactory; and

(c) that the licensing authority gives notice of the failure to the licensed body and (at the same time or later) notice that this Schedule applies in its case by virtue of sub-paragraph (2)(e).

(5) Where this Schedule applies in relation to a licensed body by virtue of sub-paragraph (1)(a) it continues to apply after the body's licence has been revoked or has otherwise ceased to have effect.

(6) For the purposes of this Schedule “licensed body” includes—

(a) a body whose licence is suspended;

(b) a body to whom this Schedule continues to apply by virtue of sub-paragraph (5);

Money: prohibition on payment

2

(1) The licensing authority may apply to the High Court for an order under sub-paragraph (2), and the High Court may make the order if it thinks fit.

(2) The order is that a person holding money on behalf of the licensed body may not make any payment of the money, except with the leave of the court.

(3) An order under sub-paragraph (2) may take effect in relation to a person—

(a) whether or not the person is named in the order;

(b) however the money is held;

(4) But an order under sub-paragraph (2) does not take effect in relation to a person until the licensing authority—

(a) has given the person a copy of the order, and

(b) (in the case of a bank or other financial institution) has indicated the branches at which it believes money to which the order relates is held.

(5) A person is not to be treated as having disobeyed an order under sub-paragraph (2) by making a payment of money if the court is satisfied that the person—

(a) exercised due diligence to ascertain whether it was money to which the order related, and

(b) failed to ascertain that the order related to it.

Money etc: vesting in licensing authority

3

(1) The sums of money to which this paragraph applies, and the right to recover or receive them, vest in the licensing authority if the licensing authority decides that they should do so.

(2) This paragraph applies to all sums of money held by or on behalf of the licensed body in connection with—

(a) its activities as a licensed body,

(b) any trust of which it is or was a trustee, or

(c) any trust of which a person who is or was a manager or employee of the licensed body is or was a trustee in that person's capacity as such a manager or employee.

(3) Sub-paragraph (1) applies whether the sums were received by the person holding them before or after the licensing authority's decision.

(4) Those sums and that right are held by the licensing authority—

(a) on trust to exercise the powers conferred by this Schedule in relation to them, and

(b) subject to that and to rules under paragraph 6, on trust for the persons beneficially entitled.

(5) The licensing authority must give the licensed body, and any other person in possession of sums of money to which this paragraph applies—

(a) a copy of the licensing authority's decision, and

(b) a notice prohibiting the payment out of those sums.

(6) A person to whom a notice under sub-paragraph (5) is given may apply to the High Court for an order directing the licensing authority to withdraw the notice.

(7) An application under sub-paragraph (6) must be made within 8 days of the licensing authority giving the person notice under sub-paragraph (5).

(8) The person must give not less than 48 hours notice of any application under sub-paragraph (6)—

(a) to the licensing authority, and

(b) if the notice under sub-paragraph (5) gives the name of a solicitor instructed by the licensing authority, to that solicitor.

(9) If the court makes the order, it may make any other order it thinks fit with respect to the matter.

(10) It is an offence for a person to whom a notice has been given under sub-paragraph (5) to pay out sums of money at a time when such payment is prohibited by the notice.

(11) A person who is guilty of an offence under sub-paragraph (10) is liable on summary conviction to a fine not exceeding level 3 on the standard scale.

4

(1) Any rights to which this paragraph applies shall vest in the licensing authority if the licensing authority decides that they should do so.

(2) This paragraph applies to any right to recover or receive debts due to the licensed body in connection with its business.

(3) Any sums recovered by the licensing authority by virtue of the exercise of rights vested under sub-paragraph (1) vest in the licensing authority and are held by it—

(a) on trust to exercise the powers conferred by this Schedule in relation to them, and

(b) subject to that and to rules under paragraph 6, on trust for the persons beneficially entitled.

(4) The licensing authority must give the licensed body, and any other person who owes a debt to which the order applies a copy of the licensing authority's decision.

5

(1) If the licensing authority takes possession of any sum of money to which paragraph 3 applies or by virtue of paragraph 4, it must pay it into a special account in the name of the licensing authority or a person nominated on its behalf.

(2) A person nominated under sub-paragraph (1) holds that sum—

(a) on trust to permit the licensing authority to exercise the powers conferred by this Schedule in relation to it, and

(b) subject to that and rules under paragraph 6, on trust for the persons beneficially entitled.

(3) A bank or other financial institution at which a special account is kept is under no obligation to ascertain whether it is being dealt with properly.

6

(1) The licensing authority may make rules governing its treatment of sums vested in it under paragraph 3 or 4(3).

(2) The rules may, in particular, make provision in respect of cases where the licensing authority, having taken such steps to do so as are reasonable in all the circumstances of the case, is unable to trace the person or persons beneficially entitled to any sum vested in the licensing authority under paragraph 3 or 4(3) (including provision which requires amounts to be paid into or out of any fund maintained by the licensing authority in connection with its compensation arrangements).

Money: information

7

(1) The licensing authority may apply to the High Court for an order requiring a person to give the licensing authority—

(a) information about any money held by the person on behalf of the licensed body, and the accounts in which it is held, or

(b) information relevant to identifying any money held by the licensed body or by another person on its behalf.

(2) The High Court may make the order if it is satisfied that there is reason to suspect—

(a) in a case within sub-paragraph (1)(a), that the person holds money on behalf of the licensed body, and

(b) in a case within sub-paragraph (1)(b), that the person has the information in question.

(3) This paragraph is without prejudice to paragraphs 2 to 6.

Notice to produce or deliver documents

8

(1) The licensing authority may give notice to the licensed body requiring it to produce or deliver all documents in its possession or under its control in connection with—

(a) its activities as a licensed body,

(b) any trust of which it is or was a trustee, or

(c) any trust of which a person who is or was a manager or employee of the licensed body is or was a trustee in that person's capacity as such a manager or employee.

(2) The notice may require the documents to be produced—

(a) to any person appointed by the licensing authority;

(b) at a time and place to be fixed by the licensing authority.

(3) The person appointed by the licensing authority may take possession of any such documents on behalf of the licensing authority.

(4) It is an offence for a person having possession of such documents to refuse, neglect or otherwise fail to comply with a notice under sub-paragraph (1).

(5) Sub-paragraph (4) does not apply where an application has been made to the High Court under paragraph 9(1)(a).

(6) A person who is guilty of an offence under sub-paragraph (4) is liable on summary conviction to a fine not exceeding level 3 on the standard scale.

Order to produce or deliver documents

9

(1) The High Court may, on the application of the licensing authority, make an order for production or delivery—

(a) in relation to a person required to produce documents under paragraph 8 and the documents the person was required to produce;

(b) if it is satisfied that there is reason to suspect that documents in relation to which the powers in paragraph 8 are exercisable have come into the possession or under the control of some person other than the licensed body, in relation to that person and those documents.

(2) An order for production or delivery is an order—

(a) requiring a person to produce or deliver documents to any person appointed by the licensing authority, at a time and place specified in the order, and

(b) authorising the appointed person to take possession of the documents on behalf of the licensing authority.

(3) The court may, on the application of the licensing authority, authorise a person appointed by the licensing authority to enter any premises (using such force as is reasonably necessary) to search for and take possession of—

(a) any documents to which an order for production or delivery relates;

(b) any property—

(i) in the possession of or under the control of the licensed body, or

(ii) in the case of an order under sub-paragraph (1)(b), which was in the possession or under the control of that body and has come into the possession or under the control of the person in respect of whom the order is made,

which the licensing authority reasonably requires for the purpose of accessing information contained in any such documents,

and to use property obtained under paragraph (b) for that purpose.

(4) It may do so on making the order for production or delivery, or at any later time.

Taking possession of documents etc under notice or order

10

(1) This paragraph applies where the licensing authority takes possession of documents or any other property under paragraph 8 or 9.

(2) On taking possession, it must give a notice to—

(a) the licensed body, and

(b) any other person from whom the documents or property were received or from whose possession they were taken.

(3) The notice must state that possession has been taken and specify the date on which possession was taken.

(4) A person to whom a notice under sub-paragraph (2) is given may apply to the High Court for an order directing the licensing authority to deliver the documents or other property to such person as the applicant requires.

(5) An application under sub-paragraph (4) must be made within 8 days of the licensing authority giving the person notice under sub-paragraph (2).

(6) The person must give not less than 48 hours notice of the application—

(a) to the licensing authority, and

(b) if the notice under sub-paragraph (2) gives the name of a solicitor instructed by the licensing authority, to that solicitor.

(7) The court may make any order it thinks fit.

Mail and other forms of communication

11

(1) The High Court, on the application of the licensing authority, may from time to time make a communications redirection order.

(2) A communications redirection order is an order that specified communications to the licensed body are to be directed, in accordance with the order, to the licensing authority or any person appointed by the licensing authority.

(3) For the purposes of this paragraph—

(a) “specified communications” means communications of such description as are specified in the order;

(b) the descriptions of communications which may be so specified include—

(i) communications in the form of a postal packet;

(ii) electronic communications;

(iii) communications by telephone.

(4) A communications redirection order has effect for such time not exceeding 18 months as is specified in the order.

(5) Where a communications redirection order has effect, the licensing authority or the person appointed by the licensing authority may take possession or receipt of the communications redirected in accordance with the order.

(6) Where a communications redirection order is made the licensing authority must pay to the designated payee the like charges (if any) as would have been payable for the redirection of the communications to which the order relates if the addressee—

(a) had permanently ceased to occupy or use the premises or other destination of the communications, and

(b) had applied to the designated payee to redirect the communications as mentioned in the order.

(7) For this purpose “the designated payee” means—

(a) in the case of an order relating to postal packets, the postal operator concerned, and

(b) in any other case, the person specified in the order as the designated payee.

(8) The High Court may, on the application of the licensing authority, authorise the licensing authority, or a person appointed by it, to take such steps as may be specified in the order in relation to any website purporting to be or have been maintained by or on behalf of the licensed body, if the High Court is satisfied that the taking of those steps is necessary to protect the public interest or the interests of clients (or potential or former clients) of the licensed body.

(9) In this paragraph “postal operator” and “postal packet” have the meaning given by section 27 of the Postal Services Act 2011.

(10) This paragraph does not apply where the powers conferred by this Part of this Schedule are exercisable by virtue of paragraph 1(2)(e).

Use of documents in licensing authority’s possession

12

(1) The licensing authority may apply to the High Court for an order as to the disposal or destruction of any document or other property in its possession by virtue of paragraph 8, 9 or 11.

(2) The court may make any order it thinks fit.

13

(1) The licensing authority may take copies of or extracts from any documents in its possession by virtue of paragraph 8, 9 or 11.

(2) If the licensing authority proposes to deliver such documents to any person, it may make the delivery conditional on the person giving a reasonable undertaking to supply copies or extracts to the licensing authority.

(3) Sub-paragraphs (1) and (2) are subject to any order made by the court under paragraph 10 or 12.

Trusts

14

(1) If the licensed body is a trustee of any trust, the licensing authority may apply to the High Court for an order for the appointment of a new trustee in substitution for it.

(2) If a person who is a manager or employee of the licensed body is a trustee of any trust in that person's capacity as such a manager or employee, the licensing authority may apply to the High Court for an order for the appointment of a new trustee in substitution for that person.

(3) The Trustee Act 1925 (c. 19) has effect in relation to an appointment of a new trustee under this paragraph as it has effect in relation to an appointment under section 41 of that Act.

General powers of licensing authority

15

The powers conferred by this Schedule in relation to sums of money, documents or other property may be exercised despite any lien on them or right to their possession.

16

The licensing authority may do all things which are reasonably necessary to facilitate the exercise of its powers under this Schedule.

Licensing authority’s costs

17

(1) Any costs incurred by the licensing authority for the purposes of this Schedule (including the costs of any person exercising powers under this Schedule on behalf of the licensing authority)—

(a) are to be paid by the licensed body, and

(b) may be recovered from the licensed body as a debt owing to the licensing authority.

(2) Sub-paragraph (1) is subject to any order for payment of costs that may be made on an application to the court under this Schedule.

18

(1) The High Court, on the application of the licensing authority, may order a liable party to pay a specified proportion of the costs mentioned in paragraph 17.

(2) For this purpose a “liable party” means—

(a) if the licensed body is a partnership, any former partner in the licensed body,

(b) in any other case, any manager or former manager of the licensed body.

(3) The High Court may make an order under this paragraph in respect of a liable party only if it is satisfied that the conduct (or any part of the conduct) by reason of which this Schedule applies was conduct carried on with the consent or connivance of, or was attributable to any neglect on the part of, the liable party.

(4) In this paragraph “specified” means specified in the order made by the High Court.

SCHEDULE 15

Membership

1

(1) The OLC is to consist of the following members—

(a) a chairman appointed by the Board with the approval of the Lord Chancellor, and

(b) at least 6, but not more than 8, other persons appointed by the Board after consultation with the chairman.

(2) The Lord Chancellor may by order amend sub-paragraph (1) by substituting, for the limit on the maximum number of persons for the time being specified in paragraph (b) of that sub-paragraph, a different limit.

2

(1) In appointing members of the OLC, the Board must ensure that a majority of the members of the OLC are lay persons.

(2) The chairman must be a lay person.

(3) In this Schedule a reference to a “lay person” is a reference to a person who has never been—

(a) an authorised person in relation to an activity which is a reserved legal activity,

(aa) an authorised person (within the meaning given in section 31 of the Financial Services and Markets Act 2000 (authorised persons)) in relation to regulated claims management activity (within the meaning given by section 417(1) of that Act (definitions)),

(b) an advocate in Scotland,

(d) a member of the Bar of Northern Ireland, or

(e) a solicitor of the Court of Judicature of Northern Ireland.

(4) For the purposes of sub-paragraph (3), a person is deemed to have been an authorised person in relation to an activity which is a reserved legal activity if that person has before the appointed day been—

(a) a barrister,

(b) a solicitor,

(d) a licensed conveyancer,

(e) granted a certificate issued by the Institute of Legal Executives authorising the person to practise as a legal executive,

(f) a registered patent attorney, within the meaning given by section 275(1) of the Copyright, Designs and Patents Act 1988 (c. 48),

(g) a registered trade mark attorney, within the meaning of the Trade Marks Act 1994 (c. 26), or

(h) granted a right of audience or right to conduct litigation in relation to any proceedings by virtue of section 27(2)(a) or section 28(2)(a) of the Courts and Legal Services Act 1990 (c. 41) (rights of audience and rights to conduct litigation).

(5) For the purpose of sub-paragraph (4)—

“appointed day” means the day appointed for the coming into force of section 13;

“licensed conveyancer” has the meaning given by section 11(2) of the Administration of Justice Act 1985 (c. 61).

3

(1) An ombudsman may be a member (but not chairman) of the OLC.

(2) In appointing members of the OLC, the Board must ensure that a majority of the members of the OLC are not ombudsmen.

4

In appointing members of the OLC, the Board must have regard to the desirability of securing that the OLC includes members who (between them) have experience in or knowledge of—

(a) the handling of complaints,

(b) the provision of legal services,

(d) consumer affairs,

(e) civil or criminal proceedings and the working of the courts,

(f) the maintenance of the professional standards of persons who provide legal services,

(g) non-commercial legal services,

(h) the differing needs of consumers, and

(i) the provision of claims management services (within the meaning of section 419A of the Financial Services and Markets Act 2000 (c. 8)).

Terms of appointment and tenure of members

5

A member of the OLC is to hold and vacate office in accordance with the terms and conditions of the member's appointment (subject to this Schedule).

6

(1) A member of the OLC must be appointed for a fixed period.

(2) The period for which a member is appointed must not exceed 5 years.

(3) A person who has held office as a member may be re-appointed once only, for a further period (whether consecutive or not) not exceeding 5 years.

7

If a member of the OLC who is a lay person becomes a person within paragraph (a) to (e) of paragraph 2(3), that person ceases to be a member of the OLC.

8

(1) A member may at any time—

(a) resign from office by giving notice to the Board;

(b) be removed from office by the Board.

(2) The Board may not under sub-paragraph (1)(b) remove a member (including the chairman) from office unless the Board is satisfied that the member—

(a) has failed without reasonable excuse to discharge the functions of the office for a continuous period of at least 6 months,

(b) has been convicted of an offence,

(c) is an undischarged bankrupt or is a person in relation to whom a moratorium period under a debt relief order applies (under Part 7A of the Insolvency Act 1986), or

(d) is otherwise unfit to hold the office or unable to discharge its functions.

(3) The chairman may be removed from office under sub-paragraph (1)(b) only with the consent of the Lord Chancellor.

(4) The Board must consult the chairman before removing a member (other than the chairman) under sub-paragraph (1)(b).

(5) The Board may not remove an ordinary member on the ground mentioned in paragraph (a) of sub-paragraph (2) more than 3 months after the end of the period mentioned in that paragraph.

9

The chairman ceases to be chairman upon ceasing to be a member of the OLC.

Remuneration etc of members

10

The chairman and other members of the OLC are to be paid by the Board in accordance with provision made by or under their terms of appointment.

11

The terms of appointment of the chairman or any other member may provide for the Board to pay, or make payments towards the provision of, a pension, allowance or gratuity to or in respect of that person.

12

If the Board thinks there are circumstances that make it right for a person ceasing to hold office as chairman or another member to receive compensation, the OLC may pay that person such compensation as the Board may determine.

Staff

13

The OLC may appoint such staff as it considers appropriate to assist in the performance of its functions.

14

Staff appointed under paragraph 13 are to be—

(a) appointed on terms and conditions determined by the OLC, and

(b) paid by the OLC in accordance with provision made by or under the terms of appointment.

15

A member of staff appointed under paragraph 13 may be a member (but not chairman) of the OLC.

16

The terms and conditions on which an ombudsman, or any member of staff appointed under paragraph 13, is appointed may provide for the OLC to pay, or make payments towards the provision of, a pension, allowance or gratuity to or in respect of that person.

17

The OLC may pay compensation for loss of employment to or in respect of an ombudsman (or former ombudsman), or a member (or former member) of staff appointed under paragraph 13.

Arrangements for assistance

18

(1) The OLC may make arrangements with such persons as it considers appropriate for assistance to be provided to it or to an ombudsman.

(2) Arrangements may include the paying of fees to such persons.

(3) The persons with whom the OLC may make arrangements include approved regulators; and the arrangements it may make include arrangements for assistance to be provided to an ombudsman in relation to the investigation and consideration of a complaint.

Committees

19

(1) The OLC may establish committees.

(2) Any committee so established may establish sub-committees.

(3) Only members of the OLC may be members of a committee or sub-committee.

(4) A majority of the members of a committee or sub-committee must be lay persons.

Proceedings

20

(1) The OLC may regulate its own procedure, and the procedure of its committees and sub-committees, including quorum.

(2) But the quorum of a committee or sub-committee must not be less than 3.

(3) The OLC must publish any rules of procedure made under this paragraph.

(4) This paragraph is without prejudice to any other power the OLC has under this Act to make rules.

21

The validity of any act of the OLC is not affected—

(a) by a vacancy in the office of chairman or amongst the other members, or

(b) by a defect in the appointment or any disqualification of a person as chairman or another member of the OLC.

Delegation of functions

22

(1) The OLC may authorise—

(a) the chairman or any other member of the OLC,

(b) a committee or sub-committee of the OLC,

(d) a member of the OLC's staff appointed under paragraph 13,

to exercise, on behalf of the OLC, such of its functions, in such circumstances, as it may determine.

(2) Sub-paragraph (1) does not apply to—

(a) the OLC's functions under section 118(1) (annual report),

(b) the OLC's functions under section 122 (appointment of Chief Ombudsman and assistant ombudsmen),

(d) any power or duty the OLC has to make rules under this Part of this Act.

(3) A committee may delegate functions (including functions delegated to the committee) to—

(a) a sub-committee,

(b) the chairman or any other member of the OLC,

(d) a member of the OLC's staff appointed under paragraph 13.

Budget

23

(1) The OLC must, before the start of each financial year, adopt an annual budget which has been approved by the Board.

(2) The OLC may, with the approval of the Board, vary the budget for a financial year at any time after its adoption.

(3) The annual budget must include an indication of—

(a) the distribution of resources deployed in the operation of the ombudsman scheme, and

(b) the amounts of income of the OLC arising or expected to arise from the operation of the scheme.

Land

24

(1) During the initial 5 year period, the OLC must not acquire or dispose of an interest in land, except with the approval of the Lord Chancellor.

(2) The initial 5 year period is the period of 5 years beginning with the day on which the appointment of the first Interim Chief Executive under paragraph 10 of Schedule 22 takes effect or the day on which the first appointment of a member of the OLC takes effect, whichever first occurs.

Borrowing

25

(1) The OLC must not borrow money, except—

(a) with the consent of the Board, or

(b) in accordance with a general authorisation given by the Board.

(2) The Board may not consent or give a general authorisation for the purposes of sub-paragraph (1), except with the consent of the Lord Chancellor.

Accounts

26

(1) The OLC must—

(a) keep proper accounts and proper records in relation to the accounts, and

(b) prepare in respect of each financial year a statement of accounts.

(2) Each statement of accounts must comply with any directions given by the Lord Chancellor, with the approval of the Treasury, as to—

(a) the information to be contained in it and the manner in which it is to be presented;

(b) the methods and principles according to which the statement is to be prepared;

(3) The OLC must give a copy of each statement of accounts to the Board before the end of the month of August next following the financial year to which the statement relates.

(4) The Board must give a copy of each statement received under sub-paragraph (3)—

(a) to the Lord Chancellor, and

(b) to the Comptroller and Auditor General.

(5) The Comptroller and Auditor General must—

(a) examine, certify and report on each statement of accounts which is received under sub-paragraph (4), and

(b) give a copy of the Comptroller and Auditor General's report to the Lord Chancellor.

(6) In respect of each financial year, the Lord Chancellor must lay before Parliament a document consisting of—

(a) a copy of the statement of accounts for that year, and

(b) a copy of the Comptroller and Auditor General's report on that statement.

(7) “Financial year” means—

(a) the period beginning with the day on which the OLC is established and ending with the next following 31 March, and

(b) each successive period of 12 months.

Status

27

(1) The OLC is not to be regarded—

(a) as the servant or agent of the Crown, or

(b) as enjoying any status, immunity or privilege of the Crown.

(2) Accordingly—

(a) the OLC's property is not to be regarded as property of or held on behalf of the Crown, and

(b) the staff appointed under paragraph 13 are not to be regarded as servants or agents of the Crown or as enjoying any status, immunity or privilege of the Crown.

Application of seal and proof of instruments

28

The application of the seal of the OLC is to be authenticated by the signature of any member of the OLC, or of its staff, who has been authorised (whether generally or specifically) by the OLC for the purpose.

29

Any contract or instrument which, if entered into or executed by an individual, would not need to be under seal, may be entered into or executed on behalf of the OLC by any person who has been authorised (whether generally or specifically) by the OLC for the purpose.

30

A document purporting to be duly executed under the seal of the OLC, or signed on its behalf—

(a) is to be received in evidence, and

(b) is to be taken to be executed or signed in that way, unless the contrary is proved.

Disqualification

31

(1) In Part 2 of Schedule 1 to the House of Commons Disqualification Act 1975 (c. 24) (bodies of which all members are disqualified) at the appropriate place insert— “ The Office for Legal Complaints. ”

(2) In Part 3 of that Schedule (other disqualifying offices) at the appropriate place insert— “ The Chief Ombudsman or an assistant ombudsman appointed under section 122 of the Legal Services Act 2007 (Chief Ombudsman and assistant ombudsmen appointed for the purposes of the ombudsman scheme). ”

(3) In Part 2 of Schedule 1 to the Northern Ireland Assembly Disqualification Act 1975 (c. 25) (bodies of which all members are disqualified) at the appropriate place insert— “ The Office for Legal Complaints. ”

(4) In Part 3 of that Schedule (other disqualifying offices) at the appropriate place insert— “ The Chief Ombudsman or an assistant ombudsman appointed under section 122 of the Legal Services Act 2007 (Chief Ombudsman and assistant ombudsmen appointed for the purposes of the ombudsman scheme). ”

Freedom of information

32

In Part 6 of Schedule 1 to the Freedom of Information Act 2000 (c. 36) (other public bodies and offices which are public authorities) at the appropriate place insert— “ The Office for Legal Complaints. ”

Public records

33

In Schedule 1 to the Public Records Act 1958 (c. 51) (definition of public records) at the appropriate place in Part 2 of the Table at the end of paragraph 3 insert— “ The Office for Legal Complaints. ”

Exemption from liability in damages

34

(1) This paragraph applies to—

(a) the OLC,

(b) a member of the OLC,

(d) a member of the OLC's staff appointed under paragraph 13.

(2) A person to whom this paragraph applies is not liable in damages for anything done or omitted in the exercise or purported exercise of the functions conferred on the person concerned by or by virtue of this or any other enactment.

(3) But sub-paragraph (2) does not apply—

(a) if it is shown that the act or omission was in bad faith, or

(b) so as to prevent an award of damages made in respect of an act or omission on the ground that the act or omission was unlawful as a result of section 6(1) of the Human Rights Act 1998 (c. 42).

SCHEDULE 16

Part 1 — The Solicitors Act 1974 (c. 47)

1

The Solicitors Act 1974 is amended in accordance with this Part of this Schedule.

2

In section 1A (practising certificates: employed solicitors)—

(a) omit “or” at the end of paragraph (b),

(b) in paragraph (c) omit “by the Council of the Law Society”, and

or (d) by any other person who, for the purposes of the Legal Services Act 2007, is an authorised person in relation to an activity which is a reserved legal activity (within the meaning of that Act).

3

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4

In section 2 (training regulations)—

(a) in subsection (1) omit “, with the concurrence of the Secretary of State, the Lord Chief Justice and the Master of the Rolls,”,

(b) in subsection (3)(a)—

(i) in sub-paragraph (i) omit “, whether by service under articles or otherwise,”,

(ii) in sub-paragraph (v) omit “articles may be discharged or”, and

(iii) in that sub-paragraph after “be” (in the second place) insert “ started or ”, and

5

In section 3 (admission as solicitor), in subsection (2)—

(a) for “Master of the Rolls” (in each place) substitute “ Society ”, and

(b) for “his” substitute “ its ”.

6

In section 6 (keeping of the roll) omit subsections (2) to (4).

7

In section 7 (entry of name and restoration of name struck off)—

(a) for paragraph (a) substitute—

(a) of written evidence of admission of any person as a solicitor by the Society,

, and

(b) for “Council” substitute “ Society ”.

8

(1) Section 8 (removal or restoration of name at solicitor's request) is amended as follows.

(2) In subsection (2) for “Council” substitute “ Society ”.

(3) In subsection (4) for “Master of the Rolls” substitute “ High Court ”.

(4) After that subsection insert—

(4A) In relation to an appeal under subsection (4) 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 (4) shall be final.

(5) Omit subsection (5).

9

For sections 9 and 10 (applications for and issue of practising certificates) substitute—

(9) (1) A person whose name is on the roll may apply to the Society to be issued with a practising certificate. (2) An application under this section may include an application for a sole solicitor endorsement. (3) An application under this section must be— (a) made in accordance with regulations under section 28, and (b) accompanied by the appropriate fee. (4) “The appropriate fee”, in relation to an application, means— (a) any fee payable under subsection (1) of section 11 in respect of the practising certificate applied for, and (b) any additional fee payable under subsection (4) of that section in respect of the application. (10) (1) Subject to the following provisions of this section, where an application is made in accordance with section 9, the Society must issue a practising certificate to the applicant if it is satisfied that the applicant— (a) is not suspended from practice, and (b) is complying with any prescribed requirements imposed on the applicant. (2) A practising certificate issued to an applicant of a prescribed description must be issued subject to any conditions prescribed in relation to applicants of that description. (3) In such circumstances as may be prescribed, the Society must, if it considers it is in the public interest to do so— (a) refuse to issue a practising certificate under this section, or (b) where it decides to issue a practising certificate, issue it subject to one or more conditions. (4) The conditions which may be imposed include— (a) conditions requiring the person to whom the certificate is issued to take specified steps that will, in the opinion of the Society, be conducive to the carrying on by that person of an efficient practice as a solicitor (including, if the certificate has a sole solicitor endorsement, an efficient practice as a sole solicitor); (b) conditions which prohibit that person from taking any specified steps, except with the approval of the Society. (5) In this section — - “prescribed” means prescribed by regulations under section 28; - “specified”, in relation to a condition imposed on a practising certificate, means specified in the condition.

10

After section 10 (as inserted by paragraph 9) insert—

(10A) (1) The Society must keep a register of all solicitors who hold practising certificates. (2) The register must contain— (a) the full name of each solicitor who holds a practising certificate, (b) in relation to each solicitor who holds a practising certificate, a statement as to whether there is in force a sole solicitor endorsement, and (c) such other information as may be specified in regulations under section 28(1)(d).

11

For section 11 (fee payable on issue of practising certificate) substitute—

(11) (1) Before a practising certificate is issued, there must be paid to the Society in respect of the certificate a fee of such amount as the Society may from time to time determine. (2) Different fees may be specified for different categories of applicant and in respect of different circumstances. (3) Subsection (4) applies where a solicitor makes an application for a practising certificate if— (a) the solicitor has failed to deliver an accountant's report required by rules under section 34(1) by such time or in such circumstances as may be prescribed by those rules, and (b) a practising certificate has not been issued by the Society to the solicitor since the Society became aware of the failure. (4) Where this subsection applies, the solicitor's application must be accompanied by an additional fee of such amount as the Society from time to time determines.

12

Omit section 12 (discretion of Society with respect to issue of practising certificates in special cases).

13

Omit section 12A (additional fee payable by certain solicitors on applying for practising certificates).

14

For section 13 (appeals in connection with issue of practising certificates) substitute—

(13) (1) A person who makes an application under section 9 may appeal to the High Court against— (a) a decision to refuse the application for a practising certificate, (b) if the application included an application for a sole solicitor endorsement, a decision to refuse the application for the endorsement, or (c) a decision to impose a condition on a practising certificate issued in consequence of the application. (2) A person who holds a practising certificate subject to a condition within section 10(4)(b) may appeal to the High Court against any decision by the Society to refuse to approve the taking of any step for the purposes of that condition. (3) The Society may make rules which provide, as respects any application under section 9 that is neither granted nor refused by the Society within such period as may be specified in the rules, for enabling an appeal to be brought under this section in relation to the application as if it had been refused by the Society. (4) On an appeal under subsection (1), the High Court may— (a) affirm the decision of the Society, (b) direct the Society to make a sole solicitor endorsement on the applicant's practising certificate and to issue that certificate subject to such conditions (if any) as the High Court may think fit, (c) direct the Society to issue a certificate to the applicant free from conditions or subject to such conditions as the High Court may think fit, (d) direct the Society not to issue a certificate, (e) if a certificate has been issued, by order suspend it, (f) if the certificate has been endorsed with a sole solicitor endorsement, by order suspend the endorsement, or (g) make such other order as the High Court thinks fit. (5) On an appeal under subsection (2), the High Court may— (a) affirm the decision of the Society, (b) direct the Society to approve the taking of one or more steps for the purposes of a condition within section 10(4)(b), or (c) make such other order as the High Court thinks fit. (6) In relation to an appeal under this section the High Court may make such order as it thinks fit as to payment of costs. (7) The decision of the High Court on an appeal under subsection (1) or (2) shall be final.

15

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16

(1) Section 13A (imposition of conditions while practising certificates are in force) is amended as follows.

(2) For subsections (2) to (5) substitute—

(2) The power conferred by subsection (1) is exercisable in relation to a solicitor at any time during the period for which the solicitor's current certificate is in force if— (a) under section 13ZA the Society grants a sole solicitor endorsement, or (b) it appears to the Society that the case is of a prescribed description. (3) “Prescribed” means prescribed by regulations under section 28.

(3) In subsection (6) for “Master” to the end substitute “ High Court against the decision of the Society. ”

(4) In subsection (7)—

(a) for “Master of the Rolls” (in both places) substitute “ High Court ”, and

(b) for “he” substitute “ it ”.

(5) After that subsection insert—

(7A) The decision of the High Court on an appeal under subsection (6) shall be final.

(6) For subsection (8) substitute—

(8) Subsections (4) and (5) of section 10 apply for the purposes of subsection (1) of this section as they apply for the purposes of that section.

(7) After that subsection insert—

(9) A solicitor who holds a practising certificate subject to a condition imposed under subsection (1) which prohibits that solicitor from taking any steps specified in the condition, except with the approval of the Society, may appeal to the High Court against any decision by the Society to refuse to approve the taking of any step for the purposes of that condition. (10) On an appeal under subsection (9), the High Court may— (a) affirm the decision of the Society, (b) direct the Society to approve the taking of one or more steps for the purposes of the condition, or (c) make such other order as the High Court thinks fit. (11) The decision of the High Court on an appeal under subsection (9) shall be final. (12) In relation to an appeal under this section the High Court may make such order as it thinks fit as to payment of costs.

17

In section 13B (suspension of practising certificates where solicitors convicted of fraud or serious crime)—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d) in subsection (8)—

(i) for “Master of the Rolls” (in both places) substitute “ High Court ”,

(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(iii) in paragraph (d) for “he” substitute “ it ”, and

(e) after that subsection insert—

(9) In relation to an appeal under subsection (7) the High Court may make such order as it thinks fit as to payment of costs. (10) The decision of the High Court on an appeal under subsection (7) shall be final.

18

Omit section 14 (commencement, expiry and replacement of practising certificates).

19

In section 15 (suspension of practising certificates), in subsection (1A)—

(a) after “6(1)” insert “ , 6A(1) ”,

(b) after “1(1)(a)(i),” insert “ (aa), ”, and

20

(1) Section 16 (duration of suspension of practising certificates) is amended as follows.

(2) For subsection (1) substitute—

(1) Where a practising certificate is suspended, it expires on such date as may be prescribed by regulations under section 28.

(3) In subsection (3)(c) for “the replacement date of the certificate” substitute “ the date on which his certificate will expire ”.

(4) In subsection (5)—

(a) for “Master of the Rolls, who” substitute “ High Court, which ”, and

(b) in paragraph (b) for “he” substitute “ it ”.

(5) After that subsection insert—

(6) In relation to an appeal under subsection (5) the High Court may make such order as it thinks fit as to payment of costs. (7) The decision of the High Court on an appeal under subsection (5) shall be final.

21

In section 17 (publicity in relation to suspension of practising certificates), in subsections (1) and (2) omit “in the London Gazette”.

22

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23

For section 18 (evidence as to holding of practising certificates) substitute—

(18) (1) An extract from the roll, or an extract from the register kept under section 10A, which is certified as correct by the Society is evidence of the matters mentioned in it. (2) A certificate from the Society stating that— (a) a person's name is or was on the roll, or (b) a person is or was registered in the register kept under section 10A, is evidence of the matters stated.

24

Omit section 19 (rights of practising and rights of audience).

25

For section 20 (unqualified person not to act as solicitor) substitute—

(20) (1) No unqualified person is to act as a solicitor. (2) Any person who contravenes subsection (1) is guilty of an offence and liable on conviction on indictment to imprisonment for not more than 2 years or to a fine, or to both.

26

Omit—

(a) sections 22 and 22A (unqualified person not to prepare certain instruments etc), and

(b) section 23 (unqualified person not to prepare papers for probate etc).

27

In section 24 (application of penal provisions to body corporate), in subsection (2) from “sections” to the end substitute “ section 20 the reference to an unqualified person and the reference to a person both include a reference to a body corporate. ”

28

In section 26 (time limit for commencement of certain proceedings) omit “, 22 or 23”.

29

Omit section 27 (saving for persons authorised to conduct legal proceedings).

30

(1) Section 28 (regulations) is amended as follows.

(2) In subsection (1)—

(a) for “Master of the Rolls” substitute “ Society ”,

(b) omit “, with the concurrence of the Secretary of State and the Lord Chief Justice,”,

(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(e) in paragraph (d) for “section 9” substitute “ section 10A ”.

(3) Omit subsections (2) and (3).

(4) In subsection (3A)—

(a) for “may—” insert

may (among other things)— (za) make provision about the form in which the roll is to be kept and the manner in which entries are to be made, altered and removed;

(b) omit “and” at the end of paragraph (b), and

(e) require the information on the roll to be made available to the public; (f) specify the manner in which information is to be made so available and require it to be made so available during office hours and without charge.

(5) After that subsection insert—

(3B) Regulations about practising certificates or sole solicitor endorsements may (among other things)— (a) prescribe the form and manner in which applications for, or relating to, practising certificates or sole solicitor endorsements are to be made; (b) prescribe information which must be included in or accompany such applications; (c) make provision about time limits for dealing with such applications, and confer on a person power to extend or bring forward such a time limit in prescribed circumstances; (d) prescribe the requirements which applicants for practising certificates must satisfy before they may be issued with a practising certificate; (e) prescribe descriptions of applicants, and conditions in relation to them, for the purposes of section 10(2) (circumstances in which practising certificates must be issued subject to prescribed conditions); (f) prescribe descriptions of applicants, and conditions in relation to them, for the purposes of section 13ZA(5) (circumstances in which a practising certificate endorsed with a sole solicitor endorsement after it was issued must be made subject to prescribed conditions); (g) prescribe circumstances for the purposes of section 10(3) (circumstances in which application may be refused etc in the public interest); (h) make provision about when conditions imposed on practising certificates take effect (including provision conferring power on the Society to direct that a condition is not to have effect until the conclusion of any appeal in relation to it); (i) make provision for the commencement, duration, replacement, withdrawal and expiry of practising certificates or sole solicitor endorsements; (j) prescribe circumstances for the purposes of section 13A(2) (circumstances in which conditions can be imposed during period of practising certificate); (k) require solicitors who hold practising certificates to notify the Society of such matters as may be prescribed, at such times, or in such circumstances as may be prescribed. (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,”,

(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”,

(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

(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—

(34A) (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. (34B) (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—

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Legal Services Act 2007

37

Part 4 — Additional restrictions

Power to impose share limit, voting limit etc

38

Obligation to notify where share limit or voting limit exceeded

39

40

Part 5 — Enforcement

Divestiture

The divestiture condition

41

42

Application for divestiture

43

Restriction notice

44

Divestiture by High Court

45

Conditions

Enforcement of conditions

46

Records of decisions

Duty to notify Board of decisions under this Schedule

47

48

Power to notify Board where share limit or voting limit breached

49

50

Board’s list of persons subject to objections and conditions

51

SCHEDULE 14

Introductory

1

Money: prohibition on payment

2

Money etc: vesting in licensing authority

3

4

5

6

Money: information

7

Notice to produce or deliver documents

8

Order to produce or deliver documents

9

Taking possession of documents etc under notice or order

10

Mail and other forms of communication

11

Use of documents in licensing authority’s possession

12

13

Trusts

14

General powers of licensing authority

15

16

Licensing authority’s costs

17

18

SCHEDULE 15

Membership

1

2

3

4

Terms of appointment and tenure of members

5

6

7

8

9

Remuneration etc of members

10

11

12

Staff

13