Legal Services Act 2007 (c. 29)

(The document as of February, 2008)

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(1) Where subsection (2) applies it is an offence for a person ("P") to carry on an activity ("the relevant activity") which is a reserved legal activity, despite P being entitled to carry on the relevant activity.

(2) This subsection applies if--

(a) P carries on the relevant activity by virtue of an employee of P ("E") carrying it on in E's capacity as such an employee, and

(b) in carrying on the relevant activity, E commits an offence under section 14.

(3) If P is a body, references in subsection (2) to an employee of P include references to a manager of P.

(4) In proceedings for an offence under subsection (1), it is a defence for the accused to show that the accused took all reasonable precautions and exercised all due diligence to avoid committing the offence.

(5) A person who is guilty of an offence under subsection (1) is liable--

(a) on summary conviction, to imprisonment for a term not exceeding 12 months or a fine not exceeding the statutory maximum (or both), and

(b) on conviction on indictment, to imprisonment for a term not exceeding 2 years or a fine (or both).

(6) A person who is guilty of an offence under subsection (1) by reason of an act done in the purported exercise of a right of audience, or a right to conduct litigation, in relation to any proceedings or contemplated proceedings is also guilty of contempt of the court concerned and may be punished accordingly.

(7) In relation to an offence under subsection (1) committed before the commencement of section 154(1) of the Criminal Justice Act 2003 (c. 44), the reference in subsection (5)(a) to 12 months is to be read as a reference to 6 months.

17 Offence to pretend to be entitled

(1) It is an offence for a person--

(a) wilfully to pretend to be entitled to carry on any activity which is a reserved legal activity when that person is not so entitled, or

(b) with the intention of implying falsely that that person is so entitled, to take or use any name, title or description.

(2) A person who is guilty of an offence under subsection (1) is liable--

(a) on summary conviction, to imprisonment for a term not exceeding 12 months or a fine not exceeding the statutory maximum (or both), and

(b) on conviction on indictment, to imprisonment for a term not exceeding 2 years or a fine (or both).

(3) In relation to an offence under subsection (1) committed before the commencement of section 154(1) of the Criminal Justice Act 2003 (c. 44), the reference in subsection (2)(a) to 12 months is to be read as a reference to 6 months.

Interpretation

18 Authorised persons

(1) For the purposes of this Act "authorised person", in relation to an activity ("the relevant activity") which is a reserved legal activity, means --

(a) a person who is authorised to carry on the relevant activity by a relevant approved regulator in relation to the relevant activity (other than by virtue of a licence under Part 5), or

(b) a licensable body which, by virtue of such a licence, is authorised to carry on the relevant activity by a licensing authority in relation to the reserved legal activity.

(2) A licensable body may not be authorised to carry on the relevant activity as mentioned in subsection (1)(a).

(3) But where a body ("A") which is authorised as mentioned in subsection (1)(a) becomes a licensable body, the body is deemed by virtue of this subsection to continue to be so authorised from that time until the earliest of the following events--

(a) the end of the period of 90 days beginning with the day on which that time falls;

(b) the time from which the relevant approved regulator determines this subsection is to cease to apply to A;

(4) Subsection (2) is subject to Part 2 of Schedule 5 (by virtue of which licensable bodies may be deemed to be authorised as mentioned in subsection (1)(a) in relation to certain activities during a transitional period).

(5) A person other than a licensable body may not be authorised to carry on the relevant activity as mentioned in subsection (1)(b).

(6) But where a body ("L") which is authorised as mentioned in subsection (1)(b) ceases to be a licensable body, the body is deemed by virtue of this subsection to continue to be so authorised from that time until the earliest of the following events--

(a) the end of the period of 90 days beginning with the day on which that time falls;

(b) the time from which the relevant licensing authority determines this subsection is to cease to apply to L;

19 Exempt persons

In this Act, "exempt person", in relation to an activity ("the relevant activity") which is a reserved legal activity, means a person who, for the purposes of carrying on the relevant activity, is an exempt person by virtue of--

(a) Schedule 3 (exempt persons), or

(b) paragraph 13 or 18 of Schedule 5 (additional categories of exempt persons during transitional period).

20 Approved regulators and relevant approved regulators

(1) In this Act, the following expressions have the meaning given by this section--

"approved regulator";
"relevant approved regulator".

(2) "Approved regulator" means--

(a) a body which is designated as an approved regulator by Part 1 of Schedule 4 or under Part 2 of that Schedule (or both) and whose regulatory arrangements are approved for the purposes of this Act, and

(b) if an order under section 62(1)(a) has effect, the Board.

(3) An approved regulator is a "relevant approved regulator" in relation to an activity which is a reserved legal activity if--

(a) the approved regulator is designated by Part 1, or under Part 2, of Schedule 4 in relation to that reserved legal activity, or

(b) where the approved regulator is the Board, it is designated in relation to that reserved legal activity by an order under section 62(1)(a).

(4) An approved regulator is a "relevant approved regulator" in relation to a person if the person is authorised by the approved regulator to carry on an activity which is a reserved legal activity.

(5) Schedule 4 makes provision with respect to approved regulators other than the Board.

In that Schedule--

(a) Part 1 designates certain bodies as approved regulators in relation to certain reserved legal activities,

(b) Part 2 makes provision for bodies to be designated by order as approved regulators in relation to one or more reserved legal activities, and

(6) An approved regulator may authorise persons to carry on any activity which is a reserved legal activity in respect of which it is a relevant approved regulator.

21 Regulatory arrangements

(1) In this Act references to the "regulatory arrangements" of a body are to--

(a) its arrangements for authorising persons to carry on reserved legal activities,

(b) its arrangements (if any) for authorising persons to provide immigration advice or immigration services,

(d) its conduct rules,

(e) its disciplinary arrangements in relation to regulated persons (including its discipline rules),

(f) its qualification regulations,

(g) its indemnification arrangements,

(h) its compensation arrangements,

(i) any of its other rules or regulations (however they may be described), and any other arrangements, which apply to or in relation to regulated persons, other than those made for the purposes of any function the body has to represent or promote the interests of persons regulated by it, and

(j) its licensing rules (if any), so far as not within paragraphs (a) to (i),

(whether or not those arrangements, rules or regulations are contained in, or made under, an enactment).

(2) In this Act--

"compensation arrangements", in relation to a body, means arrangements to provide for grants or other payments for the purposes of relieving or mitigating losses or hardship suffered by persons in consequence of--
(a)
negligence or fraud or other dishonesty on the part of any persons whom the body has authorised to carry on activities which constitute a reserved legal activity, or of employees of theirs, in connection with their activities as such authorised persons, and
(b)
failure, on the part of regulated persons, to account for money received by them in connection with their activities as such regulated persons;
"conduct rules", in relation to a body, means any rules or regulations (however they may be described) as to the conduct required of regulated persons;
"discipline rules", in relation to a body, means any rules or regulations (however they may be described) as to the disciplining of regulated persons;
"indemnification arrangements", in relation to a body, means arrangements for the purpose of ensuring the indemnification of those who are or were regulated persons against losses arising from claims in relation to any description of civil liability incurred by them, or by employees or former employees of theirs, in connection with their activities as such regulated persons;
"practice rules", in relation to a body, means any rules or regulations (however they may be described) which govern the practice of regulated persons;
"qualification regulations", in relation to a body, means--
(a)
any rules or regulations relating to--
(i)
the education and training which persons must receive, or
(ii)
any other requirements which must be met by or in respect of them,

(in order for them to be authorised by the body to carry on an activity which is a reserved legal activity,
(b)
any rules or regulations relating to--
(i)
the education and training which persons must receive, or
(ii)
any other requirements which must be met by or in respect of them,

(in order for them to be authorised by the body to provide immigration advice or immigration services, and
(c)
any other rules or regulations relating to the education and training which regulated persons must receive or any other requirements which must be met by or in respect of them,

(however they may be described).

(3) In this section "regulated persons", in relation to a body, means any class of persons which consists of or includes--

(a) persons who are authorised by the body to carry on an activity which is a reserved legal activity;

(b) persons who are not so authorised, but are employees of a person who is so authorised.

(4) In relation to an authorised person other than an individual, references in subsection (2) and (3) to employees of the person include managers of the person.

Continuity of existing rights and transitional protection

22 Continuity of existing rights to carry on reserved legal activities

Schedule 5 makes provision for the continuity of existing rights and for certain persons to be deemed, during a transitional period, to be authorised by approved regulators to carry on certain activities.

23 Transitional protection for non-commercial bodies

(1) During the transitional period, a body within subsection (2) is entitled to carry on any activity which is a reserved legal activity.

(2) The bodies are--

(a) a not for profit body,

(b) a community interest company, or

(3) The transitional period is the period which--

(a) begins with the day appointed for the coming into force of section 13, and

(b) ends with the day appointed by the Lord Chancellor by order for the purposes of this paragraph.

(4) Different days may be appointed under subsection (3)(b) for different purposes.

(5) An order may be made under subsection (3)(b) only on the recommendation of the Board.

Alteration of reserved legal activities

24 Extension of the reserved legal activities

(1) The Lord Chancellor may, by order, amend section 12 or Schedule 2 (reserved legal activities) so as to add any legal activity to the activities which are reserved legal activities for the purposes of this Act.

(2) An order under subsection (1) may be made only on the recommendation of the Board.

(3) Schedule 6 makes provision about the making of recommendations for the purposes of this section.

(4) Where a recommendation is made in relation to an activity, the Lord Chancellor must--

(a) consider the report containing the recommendation given to the Lord Chancellor under paragraph 16(3)(a) of that Schedule,

(b) decide whether or not to make an order under this section in respect of the activity, and

within the period of 90 days beginning with the day on which the report was given to the Lord Chancellor.

(5) Where the Lord Chancellor decides not to make an order under this section in respect of an activity, the notice under subsection (4)(c) must state the reasons for that decision.

25 Provisional designation as approved regulators and licensing authorities

(1) The Lord Chancellor may, by order, make provision--

(a) enabling applications to be made, considered and determined under Part 2 of Schedule 4 or Part 1 of Schedule 10 in relation to a provisional reserved activity, as if the activity were a reserved legal activity;

(b) enabling provisional designation orders to be made by the Lord Chancellor in respect of a provisional reserved activity, as if the activity were a reserved legal activity.

(2) An order under subsection (1) may, in particular, provide that Part 2 of Schedule 4 or Part 1 of Schedule 10 is to apply, in relation to such cases as may be specified by the order, with such modifications as may be so specified.

(3) The Lord Chancellor may also, by order, make provision--

(a) for the purpose of enabling applications for authorisation to carry on an activity which is a provisional reserved activity to be made to and considered and determined by--

(i) a body in respect of which a provisional designation order is made, or

(ii) the Board in its capacity as a licensing authority;

(b) for the purpose of enabling persons to be deemed to be authorised to carry on an activity which is a new reserved legal activity by a relevant approved regulator in relation to the activity, or by the Board in its capacity as a licensing authority, for a period specified in the order.

(4) For this purpose--

"provisional reserved activity" means an activity in respect of which a provisional report under paragraph 10 of Schedule 6 states that the Board is minded to make a recommendation for the purposes of section 24;
"provisional designation order" means an order made by the Lord Chancellor under Part 2 of Schedule 4 or Part 1 of Schedule 10 which is conditional upon the Lord Chancellor making an order under section 24 in respect of the provisional reserved activity, pursuant to a recommendation made by the Board following the provisional report;
"new reserved legal activity" means a legal activity which has become a reserved legal activity by virtue of an order under section 24.

26 Recommendations that activities should cease to be reserved legal activities

(1) The Board may recommend that an activity should cease to be a reserved legal activity.

(2) Schedule 6 makes provision about the making of recommendations for the purposes of this section.

(3) The Lord Chancellor must consider any recommendation made by the Board for the purposes of this section (but nothing in section 208 (minor and consequential provision etc) authorises the Lord Chancellor to give effect to such a recommendation).

(4) Where the Lord Chancellor disagrees with a recommendation (or any part of it), the Lord Chancellor must publish a notice to that effect which must include the Lord Chancellor's reasons for disagreeing.

Part 4 Regulation of approved regulators

Introductory

27 Regulatory and representative functions of approved regulators

(1) In this Act references to the "regulatory functions" of an approved regulator are to any functions the approved regulator has--

(a) under or in relation to its regulatory arrangements, or

(b) in connection with the making or alteration of those arrangements.

(2) In this Act references to the "representative functions" of an approved regulator are to any functions the approved regulator has in connection with the representation, or promotion, of the interests of persons regulated by it.

General duties of approved regulators

28 Approved regulator's duty to promote the regulatory objectives etc

(1) In discharging its regulatory functions (whether in connection with a reserved legal activity or otherwise) an approved regulator must comply with the requirements of this section.

(2) The approved regulator must, so far as is reasonably practicable, act in a way--

(a) which is compatible with the regulatory objectives, and

(b) which the approved regulator considers most appropriate for the purpose of meeting those objectives.

(3) The approved regulator must have regard to--

(a) the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed, and

(b) any other principle appearing to it to represent the best regulatory practice.

Separation of regulatory and representative functions

29 Prohibition on the Board interfering with representative functions

(1) Nothing in this Act authorises the Board to exercise its functions in relation to any representative function of an approved regulator.

(2) But subsection (1) does not prevent the Board exercising its functions for the purpose of ensuring--

(a) that the exercise of an approved regulator's regulatory functions is not prejudiced by its representative functions, or

(b) that decisions relating to the exercise of an approved regulator's regulatory functions are, so far as reasonably practicable, taken independently from decisions relating to the exercise of its representative functions.

30 Rules relating to the exercise of regulatory functions

(1) The Board must make rules ("internal governance rules") setting out requirements to be met by approved regulators for the purpose of ensuring--

(a) that the exercise of an approved regulator's regulatory functions is not prejudiced by its representative functions, and

(b) that decisions relating to the exercise of an approved regulator's regulatory functions are so far as reasonably practicable taken independently from decisions relating to the exercise of its representative functions.

(2) The internal governance rules must require each approved regulator to have in place arrangements which ensure--

(a) that the persons involved in the exercise of its regulatory functions are, in that capacity, able to make representations to, be consulted by and enter into communications with the Board, the Consumer Panel, the OLC and other approved regulators, and

(b) that the exercise by those persons of those powers is not prejudiced by the approved regulator's representative functions and is, so far as reasonably practicable, independent from the exercise of those functions.

(3) The internal governance rules must also require each approved regulator--

(a) to take such steps as are reasonably practicable to ensure that it provides such resources as are reasonably required for or in connection with the exercise of its regulatory functions;

(b) to make such provision as is necessary to enable persons involved in the exercise of its regulatory functions to be able to notify the Board where they consider that their independence or effectiveness is being prejudiced.

(4) The first set of rules under this section must be made before the day appointed by the Lord Chancellor by order for the purposes of this section.

Performance targets

31 Performance targets and monitoring

(1) The Board may--

(a) set one or more performance targets relating to the performance by an approved regulator of any of its regulatory functions, or

(b) direct an approved regulator to set one or more performance targets relating to the performance by the approved regulator of any of its regulatory functions,

if the Board is satisfied that the conditions in subsection (2) are satisfied.

(2) Those conditions are--

(a) that an act or omission of the approved regulator (or a series of such acts or omissions) has had, or is likely to have, an adverse impact on one or more of the regulatory objectives, and

(b) that it is appropriate to take the action proposed under subsection (1) in all the circumstances of the case (including in particular the impact of taking the action on the other regulatory objectives).

(3) A direction under subsection (1)(b) may impose conditions with which the performance targets must conform.

(4) If the Board proposes to take action under this section in respect of an approved regulator it must give notice to the approved regulator--

(a) describing the action it proposes to take,

(b) specifying the acts or omissions to which the proposed action relates and any other facts which, in the opinion of the Board, justify the taking of that action, and

(c) specifying the time (not being earlier than the end of the period of 28 days beginning with the day on which the notice is given) before which representations with respect to that action may be made.

(5) Before taking action under this section, the Board must consider any representations which are duly made.

(6) In exercising its regulatory functions, an approved regulator must seek to meet any performance target set for or by it under this section.

(7) The Board must publish any target set or direction given by it under this section.

(8) An approved regulator must publish any target set by it pursuant to a direction under subsection (1)(b).

(9) The Board may take such steps as it regards as appropriate to monitor the extent to which any performance target set under this section is being, or has been, met.

Directions

32 Directions

(1) This section applies if the Board is satisfied--

(a) that an act or omission of an approved regulator (or a series of such acts or omissions) has had, or is likely to have, an adverse impact on one or more of the regulatory objectives,

(b) that an approved regulator has failed to comply with any requirement imposed on it by or under this Act (including this section) or any other enactment, or

(i) has failed to ensure that the exercise of its regulatory functions is not prejudiced by any of its representative functions, or

(ii) has failed to ensure that decisions relating to the exercise of its regulatory functions are, so far as reasonably practicable, taken independently from decisions relating to the exercise of its representative functions.

(2) If, in all the circumstances of the case, the Board is satisfied that it is appropriate to do so, it may direct the approved regulator to take--

(a) in a case within subsection (1)(a), such steps as the Board considers will counter the adverse impact, mitigate its effect or prevent its occurrence or recurrence;

(b) in a case within subsection (1)(b) or (c), such steps as the Board considers will remedy the failure, mitigate its effect or prevent its recurrence.

(3) In a case within subsection (1)(a), before giving a direction under subsection (2) the Board must in particular consider the impact of giving the direction on the other regulatory objectives.

(4) A direction under subsection (2)--

(a) may only require an approved regulator to take steps which it has power to take;

(b) may require an approved regulator to take steps with a view to the modification of any part of its regulatory arrangements.

(5) The Board may not exercise its powers under this section so as to give a direction requiring an approved regulator to take steps in respect of a specific disciplinary case or other specific regulatory proceedings (as opposed to all, or a specified class of, such cases or proceedings).

(6) For the purposes of this section a direction to take steps includes a direction which requires an approved regulator to refrain from taking a particular course of action.

(7) The power to give a direction under this section is subject to any provision made by or under any other enactment.

(8) The Board may take such steps as it regards as appropriate to monitor the extent to which a direction under this section is being, or has been, complied with.

(9) Where the Board revokes a direction under this section, it must--

(a) give the approved regulator to whom the direction was given notice of the revocation, and

(b) publish that notice.

33 Directions: procedure

Schedule 7 makes provision about the procedure which must be complied with before a direction is given under section 32.

34 Enforcement of directions

(1) If at any time it appears to the Board that an approved regulator has failed to comply with a direction given under section 32, the Board may make an application to the High Court under this section.

(2) If, on an application under this section, the High Court decides that the approved regulator has failed to comply with the direction in question, it may order the approved regulator to take such steps as the High Court directs for securing that the direction is complied with.

(3) This section is without prejudice to any other powers conferred on the Board by this Part.

Censure

35 Public censure

(1) This section applies if the Board is satisfied--

(a) that an act or omission of an approved regulator (or a series of such acts or omissions) has had, or is likely to have, an adverse impact on one or more of the regulatory objectives, and

(b) that it is appropriate to act under this section in all the circumstances of the case (including in particular the impact of so acting on the other regulatory objectives).

(2) The Board may publish a statement censuring the approved regulator for the act or omission (or series of acts or omissions).

36 Public censure: procedure

(1) If the Board proposes to publish a statement under section 35 in respect of an approved regulator, it must give notice to the approved regulator--

(a) stating that the Board proposes to publish such a statement and setting out the terms of the proposed statement,

(b) specifying the acts or omissions to which the proposed statement relates, and

(c) specifying the time (not being earlier than the end of the period of 28 days beginning with the day on which the notice is given to the approved regulator) before which representations with respect to the proposed statement may be made.

(2) Before publishing the statement, the Board must consider any representations which are duly made.

(3) Before varying any proposed statement set out in a notice under subsection (1)(a), the Board must give notice to the approved regulator--

(a) setting out the proposed variation and the reasons for it, and

(b) specifying the time (not being earlier than the end of the period of 28 days beginning with the day on which the notice is given to the approved regulator) before which representations with respect to the proposed variation may be made.

(4) Before varying the proposal, the Board must consider any representations which are duly made.

Financial penalties

37 Financial penalties

(1) This section applies if the Board is satisfied--

(a) that an approved regulator has failed to comply with a requirement to which this section applies, and

(b) that, in all the circumstances of the case, it is appropriate to impose a financial penalty on the approved regulator.

(2) This section applies to any requirement imposed on the approved regulator--

(a) by rules under section 30 (internal governance rules),

(b) by a direction given under section 32 (Board directions), or

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