Legalize / United Kingdom / Scotland / Act of the Scottish Parliament

Legal Services (Scotland) Act 2010

Type Act of the Scottish Parliament

Publication 2010-11-09

State In force

Jurisdiction Scotland

Department Statute Law Database

Source legislation.gov.uk

Reform history JSON API

Part 1 — The regulatory objectives etc.

Introduction

Regulatory objectives

1

For the purposes of this Act, the regulatory objectives are the objectives of—

(a) supporting—

(i) the constitutional principle of the rule of law,

(ii) the interests of justice,

(b) protecting and promoting—

(i) the interests of consumers,

(ii) the public interest generally,

(i) access to justice,

(ii) competition in the provision of legal services,

(d) promoting an independent, strong, varied and effective legal profession,

(e) encouraging equal opportunities (as defined in Section L2 of Part II of Schedule 5 to the Scotland Act 1998) within the legal profession,

(f) promoting and maintaining adherence to the professional principles.

Professional principles

2

For the purposes of this Act, the professional principles are the principles that persons providing legal services should—

(a) support the proper administration of justice,

(b) act with independence (in the interests of justice),

(d) act in the best interests of their clients (and keep clients' affairs confidential),

(e) maintain good standards of work,

(f) where—

(i) exercising before any court a right of audience, or

(ii) conducting litigation in relation to proceedings in any court,

comply with such duties as are normally owed to the court by such persons,

(g) meet their obligations under any relevant professional rules,

(h) act in conformity with professional ethics.

Legal services

3

(1) For the purposes of this Act, legal services are services which consist of (at least one of)—

(a) the provision of legal advice or assistance in connection with—

(i) any contract, deed, writ, will or other legal document,

(ii) the application of the law, or

(iii) any form of resolution of legal disputes,

(b) the provision of legal representation in connection with—

(i) the application of the law, or

(ii) any form of resolution of legal disputes.

(2) But, for those purposes, legal services do not include—

(a) judicial activities,

(b) any other activity of a judicial nature,

(3) In subsection (1)(a)(iii) and (b)(ii), “legal disputes” includes disputes as to any matter of fact the resolution of which is relevant to determining the nature of any person's legal rights or obligations.

Role of Ministers

Ministerial oversight

4

(1) Subsections (2) and (3) apply in relation to the exercise by the Scottish Ministers of their functions—

(a) under Parts 2 and 3, or

(b) under section 125(3) or otherwise arising by virtue of Part 4 (except sections 141(c) and 145(1)).

(2) The Scottish Ministers must, so far as practicable, act in a way which—

(a) is compatible with the regulatory objectives, and

(b) they consider most appropriate with a view to meeting those objectives.

(3) The Scottish Ministers must adopt best regulatory practice under which (in particular) regulatory activities should be—

(a) carried out—

(i) effectively (but without giving rise to unnecessary burdens),

(ii) in a way that is transparent, accountable, proportionate and consistent,

(b) targeted only at such cases as require action.

Consultation by Ministers

5

(1) Subsection (2) applies in relation to the exercise by the Scottish Ministers of their functions—

(a) under Parts 2 and 3, or

(b) under section 125(3) or otherwise arising by virtue of Part 4 (except sections 141(c) and 145(1)).

(2) Where (and to the extent that) the Scottish Ministers consider it appropriate to do so in the case of an individual function, they must consult such persons or bodies as appear to them to have a significant interest in the particular subject-matter to which the exercise of the function relates.

(3) The general requirement to consult under subsection (2) has effect in conjunction with, or in the absence of, any particular consultation requirement to which the Scottish Ministers are subject in a specific (and relevant) context.

Part 2 — Regulation of licensed legal services

Chapter 1 — Approved regulators

Approved regulators

6

(1) For the purposes of this Part, an approved regulator is a professional or other body which is approved as such by the Scottish Ministers under section 7.

(2) That is, following an application to them by the body under subsection (3).

(3) An application to become an approved regulator must include—

(a) a copy of the applicant's proposed regulatory scheme (see section 7(1)(c)),

(b) a copy of its proposed statement of policy under section 78(1),

(i) the applicant's constitution and composition (including internal structure),

(ii) its internal governance arrangements,

(iii) its representative functions (if any),

(iv) its other activities (if any).

(4) The applicant—

(a) must provide the Scottish Ministers with such other information as they may reasonably require for their (or the Lord President's) consideration of its application,

(b) may withdraw its application at any time by giving them written notice to that effect.

(5) No more than 3 approved regulators may exist at any time.

(6) The Scottish Ministers may—

(a) with the agreement of the Lord President, and

(b) after consulting such other person or body as they consider appropriate,

by regulations amend the number specified in subsection (5).

(7) The Scottish Ministers may by regulations prescribe fees that they may charge—

(a) an applicant to become an approved regulator,

(b) approved regulators.

Approval of regulators

7

(1) The Scottish Ministers may approve the applicant as an approved regulator if they are satisfied that—

(a) for regulating licensed legal services providers in accordance with this Part, the applicant has—

(i) the necessary expertise as regards the provision of legal services (including as deriving from that of the persons within it),

(ii) a thorough understanding of the application of the regulatory objectives and the professional principles,

(iii) sufficient resources (financial and otherwise),

(iv) the capability in other respects,

(b) the applicant will always exercise its regulatory functions—

(i) independently of any other person or interest,

(ii) properly in other respects (in particular, with a view to achieving public confidence),

(d) the applicant's internal governance arrangements are, or will be, suitable (as determined with particular reference to section 27).

(2) The Scottish Ministers may give their approval subject to conditions.

(3) Their approval may be given—

(a) with restrictions imposed by reference to particular categories of—

(i) licensed providers,

(ii) legal services,

(b) either—

(i) without limit of time, or

(ii) for a fixed period of at least 3 years.

(4) The Scottish Ministers may, after consulting the approved regulator, vary (including by addition or deletion) any conditions or restrictions imposed under subsection (2) or (3).

(5) The Scottish Ministers may by regulations make further provision about approval under this section, including (in particular)—

(a) the process for seeking their approval,

(b) in relation to capability to act as an approved regulator, the criteria for their approval (including things that applicants must be able to demonstrate).

(6) Before making regulations under subsection (5), the Scottish Ministers must consult the Lord President.

Pre-approval consideration

8

(1) Before deciding whether or not to approve the applicant as an approved regulator under section 7, the Scottish Ministers must consult—

(a) the Lord President,

(b) the CMA, and such other organisation (appearing to them to represent the interests of consumers in Scotland) as they consider appropriate,

(2) In consulting under subsection (1), the Scottish Ministers—

(a) must send a copy of the application to the consultees,

(b) may send a copy of any revised application to any (or all) of them.

(3) The Scottish Ministers must, with reasons, notify the applicant if they intend to—

(a) refuse to approve it as an approved regulator, or

(b) impose conditions or restrictions under section 7(2) or (3).

(4) If notification is given to the applicant under subsection (3), it has 28 days beginning with the date of the notification (or such longer period as the Scottish Ministers may allow) to—

(a) make representations to the Scottish Ministers,

(b) take such steps as it may consider expedient.

Lord President’s agreement

9

(1) Despite section 7(1), the Scottish Ministers must not approve the applicant as an approved regulator unless the Lord President agrees to its being approved as such.

(2) The Scottish Ministers are to impose under section 7(2) such particular conditions relating to the expertise mentioned in section 7(1)(a)(i) as are reasonably sought by the Lord President when (and if) notifying them of the Lord President's agreement for the purpose of subsection (1).

(3) The Lord President's agreement is required for—

(a) the imposition of any—

(i) conditions under section 7(2) (apart from conditions to which subsection (2) relates),

(ii) restrictions under section 7(3),

(b) the variation of any such conditions or restrictions under section 7(4).

Authorisation to act

10

(1) An approved regulator may not exercise any of its regulatory functions unless it is authorised to do so by the Scottish Ministers under this section.

(2) The Scottish Ministers may give their authorisation if they are satisfied (or continue to be satisfied)—

(a) as mentioned in subsection (1) of section 7,

(b) as regards any criteria provided for under subsection (5)(b) of that section.

(3) Their authorisation may be given with restrictions imposed by reference to particular categories of—

(a) licensed provider,

(b) legal services.

(4) Their authorisation may be given—

(a) either—

(i) without limit of time, or

(ii) for a fixed period of at least 3 years,

(b) subject to conditions.

(5) The Scottish Ministers may, after consulting the approved regulator, vary (including by addition or deletion) any restrictions or conditions imposed under subsection (3) or (4)(b).

(6) The Scottish Ministers may by regulations make further provision about authorisation under this section including (in particular) the process for requests for their authorisation.

Request for authorisation

11

(1) A request for authorisation under section 10 may be—

(a) made at any reasonable time (including at the same time as applying for approval under section 7),

(b) withdrawn by the approved regulator (or applicant) at any time by giving the Scottish Ministers written notice to that effect.

(2) The Scottish Ministers must, with reasons, notify the approved regulator (or applicant) if they intend to—

(a) withhold their authorisation, or

(b) impose conditions under section 10(4)(b).

(3) If notification is given to the approved regulator (or applicant) under subsection (2), it has 28 days beginning with the date of the notification (or such longer period as the Scottish Ministers may allow) to—

(a) make representations to the Scottish Ministers,

(b) take such steps as it may consider expedient.

(4) The approved regulator (or applicant) must provide the Scottish Ministers with such information as they may reasonably require for their consideration of its request for their authorisation.

(5) In section 10 and this section, a reference to authorisation means initial or renewed authorisation.

Regulatory schemes

12

(1) An approved regulator must—

(a) make a regulatory scheme for licensing and regulating the provision of legal services by its licensed legal services providers, and

(b) apply the scheme in relation to them.

(2) The regulatory scheme is to—

(a) contain—

(i) the licensing rules (see section 14),

(ii) the practice rules (see section 18),

(iii) the compensation rules (see sections 25 and 26(1)),

(b) include provision for reconciling different sets of regulatory rules (see section 13),

(c) cover such other regulatory matters as the Scottish Ministers may by regulations specify (and in such manner as the regulations may specify).

(3) The regulatory scheme may—

(a) relate to—

(i) one or more categories of licensed provider,

(ii) some or all legal services,

(b) make different provision for different cases or types of case.

(4) An approved regulator may amend its regulatory scheme (or any aspect of it), but—

(a) any material amendment is invalid unless it has the prior approval of the Scottish Ministers,

(b) the Scottish Ministers may not give their approval without—

(i) the Lord President's agreement, and

(ii) consulting such other person or body as they consider appropriate.

(5) The Scottish Ministers may by regulations—

(a) confer authority for the regulatory schemes of approved regulators to deal with the provision by their licensed providers of such other services (in addition to legal services) as the regulations may prescribe, and

(b) specify the extent to which (and the manner in which) the regulatory schemes may do so.

Reconciling different rules

13

(1) The provision required by section 12(2)(b) to be in the regulatory scheme is such provision as is reasonably practicable (and appropriate in the circumstances) for—

(a) preventing or resolving regulatory conflicts, and

(b) avoiding unnecessary duplication of regulatory rules.

(2) For the purposes of this section, a regulatory conflict is a conflict between—

(a) the regulatory scheme of an approved regulator, and

(b) any professional or regulatory rules made by any other body which regulates the provision of legal or other services.

(3) The Scottish Ministers may by regulations make further provision about regulatory conflicts (such as may involve an approved regulator).

(4) Before making regulations under subsection (3), the Scottish Ministers must have the Lord President's agreement.

Licensing rules

Licensing rules: general

14

(1) For the purposes of this Part, the licensing rules are rules about—

(a) the procedure for becoming a licensed provider, including (in particular)—

(i) the making of applications,

(ii) the criteria to be met by applicants,

(iii) the determination of applications,

(iv) the issuing of licences,

(b) the terms of licences and attaching to licences of conditions or restrictions,

(i) renewal of licences,

(ii) circumstances in which licences may be revoked or suspended,

(d) licensing provision affecting non-solicitor investors in licensed providers,

(e) licensing fees that are chargeable by the approved regulator.

(2) Rules made in pursuance of subsection (1)(a) to (c) must allow for review by the approved regulator of any decision made by it under the rules that materially affects an applicant for a licence or (as the case may be) a licensed provider.

(3) Licensing rules may include such further licensing arrangements as to licensed providers for which provision is (in the approved regulator's opinion) necessary or expedient.

(4) See also sections 55(6)(b), 57(4), 62(2), 63(3) and 67(2)(b) and paragraph 4(2) of schedule 8 (as well as sections 15 and 16).

Initial considerations

15

(1) Licensing rules must provide for—

(a) consultation with the CMA, where appropriate in accordance with subsection (2), in relation to a licence application,

(b) how the approved regulator is to deal with a licence application where it believes that granting it would cause (directly or indirectly) a material and adverse effect on the provision of legal services.

(2) For the purpose of subsection (1)(a), it is appropriate to consult the CMA where the approved regulator believes that the granting of the licence application may have the effect of—

(a) preventing competition within the legal services market, or

(b) significantly restricting or distorting such competition.

Other licensing rules

16

(1) Licensing rules may allow for—

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