Legal Services Act 2007 (c. 29)

(The document as of February, 2008)

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(1) A person on whom a penalty is imposed under section 95 may, before the end of such period as may be prescribed by rules made by the Board, appeal to the relevant appellate body on one or more of the appeal grounds.

(2) The appeal grounds are--

(a) that the imposition of the penalty is unreasonable in all the circumstances of the case;

(b) that the amount of the penalty is unreasonable;

(c) that it is unreasonable of the licensing authority to require the penalty imposed or any portion of it to be paid by the time or times by which it was required to be paid.

(3) On any such appeal, where the relevant appellate body considers it appropriate to do so in all the circumstances of the case and is satisfied of one or more of the appeal grounds, that body may--

(a) quash the penalty,

(b) substitute a penalty of such lesser amount as it considers appropriate, or

(c) in the case of the appeal ground in subsection (2)(c), substitute for any time imposed by the licensing authority a different time or times.

(4) Where the relevant appellate body substitutes a penalty of a lesser amount it may require the payment of interest on the substituted penalty at such rate, and from such time, as it considers just and equitable.

(5) Where the relevant appellate body specifies as a time by which the penalty, or a portion of the penalty, is to be paid a time before the determination of the appeal under this section it may require the payment of interest on the penalty, or portion, from that time at such rate as it considers just and equitable.

(6) A party to the appeal may appeal to the High Court on a point of law arising from the decision of the relevant appellate body, but only with the permission of the High Court.

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

(8) Except as provided by this section, the validity of a penalty is not to be questioned by any legal proceedings whatever.

97 Recovery of financial penalties

(1) If the whole or any part of a penalty is not paid by the time by which, in accordance with licensing rules, it is required to be paid, the unpaid balance from time to time carries interest at the rate for the time being specified in section 17 of the Judgments Act 1838 (c. 110).

(2) Where a penalty, or any portion of it, has not been paid by the time by which, in accordance with licensing rules, it is required to be paid and--

(a) no appeal relating to the penalty has been made under section 96 during the period within which such an appeal can be made, or

(b) an appeal has been made under that section and determined or withdrawn,

the licensing authority may recover from the person on whom the penalty was imposed, as a debt due to the licensing authority, any of the penalty and any interest which has not been paid.

(3) A licensing authority must pay into the Consolidated Fund any sum received by it as a penalty (or as interest on a penalty).

98 Referral of employees etc to appropriate regulator

(1) The relevant licensing authority may refer to an appropriate regulator any matter relating to the conduct of--

(a) an employee or manager of a licensed body;

(b) a person designated as a licensed body's Head of Legal Practice or Head of Finance and Administration.

(2) The licensing authority may also refer any matter relating to the conduct of such a person to the Board.

(3) Appropriate regulators are--

(a) if the person is an authorised person in relation to a reserved legal activity, any relevant approved regulator in relation to that person, and

(b) if the person carries on non-reserved activities, any person who exercises regulatory functions in relation to the carrying on of such activities by the person.

99 Disqualification

(1) A licensing authority may in accordance with its licensing rules disqualify a person from one or more of the activities mentioned in subsection (2) if--

(a) the disqualification condition is satisfied in relation to the person, and

(b) the licensing authority is satisfied that it is undesirable for the person to engage in that activity or those activities.

(2) The activities are--

(a) acting as Head of Legal Practice of any licensed body,

(b) acting as Head of Finance and Administration of any licensed body,

(d) being employed by any licensed body.

(3) The disqualification condition is satisfied in relation to a person if, in relation to a licensed body licensed by the licensing authority, the person (intentionally or through neglect)--

(a) breaches a relevant duty to which the person is subject, or

(b) causes, or substantially contributes to, a significant breach of the terms of the licensed body's licence.

(4) The relevant duties are--

(a) the duties imposed on a Head of Legal Practice by section 91,

(b) the duties imposed on a Head of Finance and Administration by section 92,

(d) the duty imposed on non-authorised persons by section 90.

100 Lists of disqualified persons

(1) The Board must keep lists of persons who are disqualified from--

(a) acting as Head of Legal Practice of any licensed body,

(b) acting as Head of Finance and Administration of any licensed body,

(d) being employed by any licensed body.

(2) A person is disqualified from acting in a way mentioned in subsection (1) if--

(a) the person has been disqualified from so acting by a licensing authority under section 99, and

(b) the disqualification continues in force.

(3) The disqualification ceases to be in force if the appropriate licensing authority so determines, on a review or otherwise, in accordance with licensing rules made under paragraph 23 of Schedule 11.

(4) The appropriate licensing authority is--

(a) the licensing authority which disqualified the person, or

(b) if the person was disqualified by an approved regulator which is no longer designated as a licensing authority, the successor licensing authority.

(5) The successor licensing authority is--

(a) the licensing authority which licenses the body in relation to which the disqualification condition (within the meaning of section 99) was satisfied in respect of the person, or

(b) if there is no such licensing authority, the licensing authority designated by the Board on an application by the disqualified person.

(6) The Board must publish the lists kept by it under subsection (1).

101 Suspension and revocation of licence

(1) A licensing authority may, in accordance with its licensing rules, suspend or revoke any licence granted by it under this Part.

(2) A licence is to be treated as not being in force at any time while it is suspended under this section.

102 Intervention

Schedule 14 confers powers of intervention on licensing authorities.

103 Regulatory conflict and the Board as licensing authority

(1) Sections 52 and 54 (regulatory conflict between approved regulators and between approved regulators and other regulators) apply in relation to the Board in its capacity as a licensing authority and its licensing rules as they apply in relation to an approved regulator (including the Board in its capacity as approved regulator) and its regulatory arrangements.

(2) Section 68 (regulatory conflict and the Board as approved regulator) applies in relation to the Board in its capacity as a licensing authority and its licensing rules as it applies in relation to the Board in its capacity as an approved regulator and its regulatory arrangements.

104 Prevention of regulatory conflict: accounts rules

(1) Where a licensed body carries on an activity through a solicitor, the rules made under paragraph 20 of Schedule 11 apply instead of those made under sections 32 to 34 of the Solicitors Act 1974 (c. 47).

(2) Where a licensed body carries on an activity through a licensed conveyancer, the rules made under paragraph 20 of Schedule 11 apply instead of those made under sections 22 and 23 of the Administration of Justice Act 1985 (c. 61).

Special kinds of body

105 Trade union exemptions

(1) Paragraphs 11 to 14 of Schedule 11 (Head of Legal Practice and Head of Finance and Administration) do not apply in relation to a licensed body which is an independent trade union.

(2) Schedule 13 (ownership) does not apply in relation to an applicant for a licence, or a licensed body, which is an independent trade union.

106 Power to modify application of licensing rules etc to special bodies

(1) This section applies to a licensed body (or an applicant for a licence) which is--

(a) an independent trade union,

(b) a not for profit body,

(d) a low-risk body (see section 108), or

(e) a body of such other description as may be prescribed by order made by the Lord Chancellor on the recommendation of the Board.

(2) A body to which this section applies may apply to the relevant licensing authority, in accordance with its licensing rules, for the authority to make an order under this section.

(3) The licensing authority may make one or both of the following orders--

(a) that the authority's licensing rules apply in relation to the body with such modifications as may be specified in the order;

(b) that Schedule 13 does not apply in relation to the body, or applies in relation to the body with such modifications as may be specified in the order.

(4) On an application under subsection (2), the licensing authority may make any order which the authority--

(a) has power to make under subsection (3), and

(b) considers appropriate in all the circumstances of the case,

whether or not it is the order for which the applicant applied.

(5) In deciding what order (if any) is appropriate in all the circumstances of the case, the licensing authority must in particular have regard to--

(a) the reserved legal activities and non-reserved activities which the body carries on (or proposes to carry on),

(b) the nature of the persons to whom the body provides (or proposes to provide) services,

(c) any non-authorised persons who have an interest or an indirect interest in the licensed body or hold a material interest in the licensed body, or are managers of the body, and

(d) any other matter specified in the authority's licensing rules.

(6) If the licensing authority makes an order under subsection (3), the authority's licensing rules or Schedule 13 or both (as the case may be) have effect in relation to that body in accordance with that order.

(7) The licensing authority may not make an order under subsection (3)(a) in relation to provisions of its licensing rules made in accordance with the following paragraphs of Schedule 11--

(a) paragraphs 2 and 3 (determination and review of applications for a licence);

(b) paragraphs 7 and 8 (applications under this section);

(d) paragraph 10(2) (management);

(e) paragraph 16 (carrying on of licensed activities);

(f) paragraph 24(1), (2), (3) and (8) (grounds for suspending and revoking licences);

(g) paragraph 24(10) and (11) (procedure for suspending or revoking licence);

(h) paragraph 26(2) (review of decision to suspend or revoke licence).

(8) The licensing authority may not make an order under subsection (3)(a) which results in its licensing rules, as they apply in relation to the body to which the order relates, not making the provision required by--

(a) section 83(5)(a) to (g);

(b) paragraph 1 of Schedule 11 (applications for licences);

(d) paragraph 6 of that Schedule (modification of licence);

(e) paragraph 20 of that Schedule (accounts).

(9) If the licensing authority's licensing rules, as they apply in relation to a body to which an order under subsection (3)(a) relates, make provision requiring the body to have--

(a) a Head of Legal Practice approved by the licensing authority, or

(b) a Head of Finance and Administration approved by the licensing authority,

they must also provide for a review by the licensing authority of any decision by it to refuse or withdraw that approval.

107 Modifications under section 106: supplementary

(1) This section applies where a licensing authority has made an order under section 106 in relation to a body to which that section applies.

(2) The licensing authority must revoke the order under section 106 if it becomes aware that the body in respect of which the order was made is no longer a body to which that section applies.

(3) The licensing authority may revoke or otherwise modify an order under section 106--

(a) on the application of the body in relation to which the order was made, or

(b) of its own motion.

(4) It may do so only if it considers it appropriate to do so in all the circumstances of the case, having regard to the matters mentioned in section 106(5).

108 "Low risk body"

(1) A body ("B") is a low risk body if the management condition and the ownership condition are satisfied in relation to it.

(2) The management condition is that the number of managers of the body who are within subsection (4) is less than 10% of the total number of managers.

(3) The ownership condition is that--

(a) the proportion of shares in B held by persons within subsection (4) is less than 10%, and

(b) the proportion of the voting rights in B which such persons are entitled to exercise, or control the exercise of, is less than 10%, and

(i) the proportion of shares in P held by such persons is less than 10%, and

(ii) the proportion of the voting rights in P which such persons are entitled to exercise, or control the exercise of, is less than 10%.

(4) The persons within this subsection are--

(a) non-authorised persons;

(b) licensed bodies.

(5) For the purposes of this section "parent undertaking" has the same meaning as in the Financial Services and Markets Act 2000 (c. 8) (see section 420 of that Act).

109 Foreign bodies

The Lord Chancellor may by order make provision for the modification of any provision of this Part in its application to a body of persons formed under, or in so far as the body is recognised by, law having effect outside England and Wales.

Supplementary provision

110 Reporting requirements relating to Part 5

(1) The Board's annual report must deal with how, in the Board's opinion, the activities of licensing authorities and licensed bodies have affected the regulatory objectives.

(2) This section does not apply to an annual report for a financial year before the first financial year in which a licence is issued under this Part.

(3) In this section "annual report" and "financial year" have the same meaning as in section 6.

111 Interpretation of Part 5

(1) In this Part--

"licensed activity", in relation to a licensed body, means an activity--
(a)
which is a reserved legal activity, and
(b)
which the licensed body is authorised to carry on by virtue of its licence;
"non-authorised person" means a person who is not within subsection (2);
"non-reserved activity" means an activity which is not a reserved legal activity;
"relevant appellate body", in relation to decisions made by a licensing authority under this Part, means the body having power to hear appeals from those decisions (whether by virtue of an order under section 80 or otherwise).

(2) The following persons are within this subsection--

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

(b) a registered foreign lawyer (within the meaning of section 89 of the Courts and Legal Services Act 1990 (c. 41)),

(c) a person entitled to pursue professional activities under a professional title to which the Directive applies in a state to which the Directive applies (other than the title of barrister or solicitor in England and Wales),

(d) a body which provides professional services such as are provided by persons within paragraph (a) or lawyers of other jurisdictions, and all the managers of which and all the persons with an interest in which--

(i) are within paragraphs (a) to (c), or

(ii) are bodies in which persons within paragraphs (a) to (c) are entitled to exercise, or control the exercise of, more than 90% of the voting rights.

(3) In subsection (2)(c) "the Directive" means Directive 98/5/EC of the European Parliament and the Council, to facilitate practice of the profession of lawyer on a permanent basis in a Member State other than that in which the qualification was obtained.

Part 6 Legal Complaints

Complaints procedures of authorised persons

112 Complaints procedures of authorised persons

(1) The regulatory arrangements of an approved regulator must make provision requiring each relevant authorised person--

(a) to establish and maintain procedures for the resolution of relevant complaints, or

(b) to participate in, or make arrangements to be subject to, such procedures established and maintained by another person,

and provision for the enforcement of that requirement.

(2) The provision made for the purposes of subsection (1) must satisfy such requirements as the Board may, from time to time, specify for the purposes of that subsection.

(3) In this section--

"relevant authorised person", in relation to an approved regulator, means a person in relation to whom the approved regulator is a relevant approved regulator;
"relevant complaint", in relation to a relevant authorised person, means a complaint which--
(a)
relates to an act or omission of that person, and
(b)
may be made under the scheme provided for by this Part.

(4) The Board must publish any requirements specified by it for the purposes of subsection (2).

(5) This section applies in relation to the licensing rules of the Board as it applies in relation to the regulatory arrangements of an approved regulator except that subsection (3) has effect as if for the definition of "relevant authorised person" there were substituted--

" "relevant authorised person", in relation to the Board, means a person licensed by the Board under Part 5; " .

Overview of the scheme

113 Overview of the scheme

(1) This Part provides for a scheme under which complaints which--

(a) relate to an act or omission of a person ("the respondent") in carrying on an activity, and

(b) are within the jurisdiction of the scheme (see section 125),

may be resolved quickly and with minimum formality by an independent person.

(2) Under the scheme--

(a) redress may be provided to the complainant, but

(b) no disciplinary action may be taken against the respondent.

(3) Section 157 prevents provision relating to redress being included in the regulatory arrangements of an approved regulator, or licensing rules made by the Board in its capacity as a licensing authority.

(4) But neither the scheme nor any provision made by this Part affects any power of an approved regulator, or the Board in its capacity as a licensing authority, to take disciplinary action.

(5) "Disciplinary action" means the imposition of sanctions, in respect of a breach of conduct rules or discipline rules, on a person who is an authorised person in relation to an activity which is a reserved legal activity.

The Office for Legal Complaints

114 The Office for Legal Complaints

(1) There is to be a body corporate called the Office for Legal Complaints (in this Act referred to as "the OLC").

(2) Schedule 15 is about the OLC.

115 The ombudsman scheme

(1) The scheme provided for by this Part is to be administered by the OLC in accordance with this Part and with scheme rules made under this Part.

(2) In this Part "scheme rules" means rules made by the OLC.

(3) The scheme is to be operated under a name (which must include the word "ombudsman") chosen by the OLC, and is referred to in this Act as "the ombudsman scheme".

116 General obligations

(1) In discharging its functions the OLC must comply with the requirements of this section.

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

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

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

(3) The OLC must have regard to any principles appearing to it to represent the best practice of those who administer ombudsman schemes.

117 Corporate governance

In managing its affairs, the OLC must have regard to such generally accepted principles of good corporate governance as it is reasonable to regard as applicable to it.

118 Annual report

(1) The OLC must prepare a report ("the annual report") for each financial year.

(2) The annual report must deal with--

(a) the discharge of the functions of the OLC,

(b) the extent to which, in the OLC's opinion, the OLC has met the regulatory objectives, and

(3) The OLC must include in the annual report a copy of the report prepared by the Chief Ombudsman under section 123 for the financial year in question.

(4) As soon as reasonably practicable after the end of each financial year, the OLC must give the Board a copy of the annual report prepared for that year.

(5) The Board must give a copy of the annual report to the Lord Chancellor.

(6) The Lord Chancellor must lay a copy of the annual report before Parliament.

(7) In this section "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.

119 Supplementary powers

The OLC may do anything calculated to facilitate, or incidental or conducive to, the carrying out of any of its functions.

120 Reporting to the Board

(1) The Board may require the OLC to prepare and give the Board, within a specified period, a report in respect of any specified matter relating to the functions of the OLC.

(2) In subsection (1) "specified" means specified in the requirement.

(3) The Board must publish any report given to it under this section.

121 Performance targets and monitoring

(1) The Board may--

(a) set one or more performance targets relating to the performance by the OLC of any of its functions, or

(b) direct the OLC to set one or more performance targets relating to the performance by the OLC of any of its functions.

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

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

(4) The OLC must publish any target set by it pursuant to a direction under subsection (1)(b).

(5) 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.

The ombudsmen

122 Appointment of the Chief Ombudsman and assistant ombudsmen

(1) The OLC--

(a) must appoint a person to act as Chief Ombudsman for the purposes of the ombudsman scheme, and

(b) may, with the consent of the Chief Ombudsman, appoint one or more other persons to act as assistant ombudsmen for those purposes.

(2) The person appointed under subsection (1)(a) must be a lay person.

(3) It is a condition of an appointment under subsection (1)(b) that the person appointed must not during the appointment carry on any activity which is a reserved legal activity for or in expectation of any fee, gain or reward.

(4) Each person appointed under subsection (1)(a) or (b) must be a person appearing to the OLC to have appropriate qualifications and experience to act as an ombudsman for the purposes of the ombudsman scheme.

(5) In this Act a reference to an "ombudsman" (except in the expressions "ombudsman scheme", "Chief Ombudsman" and "assistant ombudsman") is a reference to the Chief Ombudsman or an assistant ombudsman.

(6) A person's appointment as Chief Ombudsman ceases if that person ceases to be a lay person.

(7) The terms and conditions on which a person is appointed as an assistant ombudsman must specify the consequences of a breach of the condition imposed by subsection (3).

(8) Subject to that, a person's appointment as an ombudsman is to be on such terms and conditions (including terms as to the duration and termination of a person's appointment and as to remuneration) as the OLC considers--

(a) consistent with ensuring the independence of the person appointed, and

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