Legal Services Act 2007

• (f) the promotion of relations between the approved regulator and relevant national or international bodies, governments or the legal professions of other jurisdictions.

• (5) A practising fee is payable under the regulatory arrangements of an approved regulator only if the Board has approved the level of the fee.

• (6) The Board must make rules containing provision—

• (a) about the form and manner in which applications for approval for the purposes of subsection (5) must be made and the material which must accompany such applications;

• (b) requiring applicants to have consulted such persons as may be prescribed by the rules in such manner as may be so prescribed before such an application is made;

• (c) about the procedures and criteria that will be applied by the Board when determining whether to approve the level of a fee for the purposes of subsection (5).

• (7) Rules under subsection (6)(c) must, in particular, contain—

• (a) provision requiring the Board, before it determines an application for approval of the level of a fee, to consult such persons as it considers appropriate about the impact of the proposed fee on persons providing non-commercial legal services;

• (b) provision about the time limit for the determining of an application.

• (8) In this section “relevant authorised persons”, in relation to an approved regulator, means persons who are authorised by the approved regulator to carry on activities which are reserved legal activities.

Regulatory conflict

Regulatory conflict with approved regulators

52

• (1) The regulatory arrangements of an approved regulator must make such provision as is reasonably practicable to prevent regulatory conflicts.

• (2) For the purposes of this section and section 53, a regulatory conflict is a conflict between—

• (a) a requirement of the approved regulator's regulatory arrangements, and

• (b) a requirement of the regulatory arrangements of another approved regulator.

• (3) Subsection (4) applies where a body is authorised by an approved regulator (“the entity regulator”) to carry on an activity which is a reserved legal activity.

• (4) If a conflict arises between—

• (a) a requirement of the regulatory arrangements of the entity regulator, in relation to the body authorised by the entity regulator or an employee or manager of the body (“an entity requirement”), and

• (b) a requirement of the regulatory arrangements of another approved regulator in relation to an employee or manager of the body who is authorised by it to carry on a reserved legal activity (“an individual requirement”),

the entity requirement prevails over the individual requirement.

Modification of provision made about regulatory conflict

53

• (1) An approved regulator (“the applicant regulator”) may make an application under this section if it considers that the regulatory arrangements of another approved regulator (“the conflicting regulator”) do not make appropriate provision to prevent a regulatory conflict with the applicant regulator.

• (2) An application under this section is an application made to the Board for the Board to exercise its powers under section 32 to direct the conflicting regulator—

• (a) to take steps to modify, in such manner as may be specified in the direction, the provision made by its regulatory arrangements to prevent a regulatory conflict with the applicant regulator, or

• (b) if its regulatory arrangements do not make any such provision, to make such provision as may be specified in the direction to prevent such a conflict.

• (3) An approved regulator must consider any request made by an affected person—

• (a) for the approved regulator to reconsider the provision made by its regulatory arrangements to prevent a regulatory conflict with another approved regulator, or

• (b) for the approved regulator to make an application under this section.

• (4) An “affected person”, in relation to an approved regulator, means—

• (a) a person authorised by the approved regulator to carry on a reserved legal activity;

• (b) an employee or manager of such a person.

• (5) Where an application is made under this section, the Board—

• (a) must give the applicant regulator and the conflicting regulator an opportunity to make representations, and

• (b) may consult any persons it considers appropriate.

• (6) The Board must decide whether or not to give a warning notice in response to the application.

• (7) The Board must make that decision before the end of the period of 6 months beginning with the day on which the application is received by it.

• (8) The Board must give notice of its decision, and the reasons for it, to the applicant regulator and the conflicting regulator.

• (9) For the purposes of this section “warning notice” means a notice given under paragraph 2(1) of Schedule 7 (warning of proposed direction under section 32).

Regulatory conflict with other regulatory regimes

54

• (1) The regulatory arrangements of an approved regulator must make such provision as is reasonably practicable and, in all the circumstances, appropriate—

• (a) to prevent external regulatory conflicts,

• (b) to provide for the resolution of any external regulatory conflicts which arise, and

• (c) to prevent unnecessary duplication of regulatory provisions made by an external regulatory body.

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

• (a) a requirement of the regulatory arrangements of the approved regulator, and

• (b) a requirement of any regulatory provision made by an external regulatory body.

• (3) For this purpose “external regulatory body” means a person (other than an approved regulator) who exercises regulatory functions in relation to a particular description of persons with a view to ensuring compliance with rules (whether statutory or non-statutory) by those persons.

• (4) Regulatory arrangements made for the purposes of subsection (1)(b) may, with the consent of the Board, provide for the Board to exercise functions in connection with the resolution of conflicts.

Information

Provision of information to the Board

55

• (1) The Board may, by notice, require an approved regulator—

• (a) to provide any information, or information of a description, specified in the notice, or

• (b) to produce documents, or documents of a description, specified in the notice.

• (2) A notice under subsection (1)—

• (a) may specify the manner and form in which any information is to be provided;

• (b) must specify the period within which any information is to be provided or document is to be produced;

• (c) may require any information to be provided, or document to be produced, to the Board or to a person specified in the notice.

• (3) The Board may, by notice, require a person representing the approved regulator to attend at a time and place specified in the notice to provide an explanation of any information provided or document produced under this section.

• (4) The Board may pay to any person such reasonable costs as may be incurred by that person in connection with—

• (a) the provision of any information, or the production of any document, by that person pursuant to a notice under subsection (1), or

• (b) that person's compliance with a requirement imposed under subsection (3).

• (5) The Board, or a person specified under subsection (2)(c), may take copies of or extracts from a document produced pursuant to a notice under subsection (1).

• (6) For the purposes of this section and section 56, references to an approved regulator include a body which was, but is no longer, an approved regulator.

Enforcement of notices under section 55

56

• (1) Where an approved regulator is unable to comply with a notice given to it under section 55(1), it must give the Board a notice to that effect stating the reasons why it cannot comply.

• (2) If an approved regulator refuses, or otherwise fails, to comply with a notice under section 55(1), the Board may apply to the High Court for an order requiring the approved regulator to comply with the notice or with such directions for the like purpose as may be contained in the order.

• (3) This section applies in relation to a person to whom a notice is given under section 55(3) as it applies in relation to an approved regulator to whom a notice is given under section 55(1).

Competition

Reports by the OFT

57

• (1) If the CMA is of the opinion that the regulatory arrangements of an approved regulator (or any part of them) prevent, restrict or distort competition within the market for reserved legal services to any significant extent, or are likely to do so, the CMA may prepare a report to that effect.

• (2) A report under subsection (1)—

• (a) must state what, in the CMA's opinion, is the effect, or likely effect, on competition of the regulatory arrangements or part of them to which the report relates, and

• (b) may contain recommendations as to the action which the Board should take for the purpose of ensuring that the regulatory arrangements of the approved regulator do not prevent, restrict or distort competition.

• (3) Where the CMA makes a report under subsection (1), it must—

• (a) give a copy of the report to the Board, the Consumer Panel and the approved regulator, and

• (b) publish the report.

• (4) Before publishing a report under subsection (3)(b), the CMA must, so far as practicable, exclude any matter which relates to the private affairs of a particular individual the publication of which, in the opinion of the CMA, would or might seriously and prejudicially affect the interests of that individual.

• (5) The CMA may exercise any of the powers conferred on it by section 174(3) to (5) and (6A) of the Enterprise Act 2002 (c. 40) (investigation powers) for the purpose of assisting it in exercising its functions under this section and references in section 174 of the Enterprise Act 2002 to a “permitted purpose” are to be construed accordingly.

• (5A) Where the CMA exercises any of its powers under section 174 of the Enterprise Act 2002 for the purpose referred to in subsection (5), “the relevant day” for the purposes of section 174B of the Enterprise Act 2002 is the day on which the CMA publishes its report.

• (6) For the purposes of the law of defamation, absolute privilege attaches to any report of the CMA under this section.

The Board’s response to OFT report

58

• (1) This section applies where a report is made by the CMA under section 57 in respect of an approved regulator.

• (2) The Board must allow the approved regulator a period of 28 days beginning with the day on which the copy of the report is given to the approved regulator under section 57, or such longer period as the Board may specify in a particular case, to make representations to the Board about the CMA's report.

• (3) The Consumer Panel may give the Board such advice as the Consumer Panel thinks fit regarding the CMA's report.

• (4) Having considered any representations made under subsection (2) and any advice given under subsection (3), the Board must notify the CMA of the action (if any) it proposes to take in response to the report.

Referral of report by the Lord Chancellor to the Competition Commission

59

• (1) This section applies where the CMA is satisfied that the Board has failed to give full and proper consideration to a report made by the CMA, in respect of an approved regulator, under section 57.

• (2) The CMAmay give a copy of its report to the Lord Chancellor.

• (3) The CMAmust notify the Board and the approved regulator if it gives a copy of its report to the Lord Chancellor.

• (4) On receiving a report under subsection (2), the Lord Chancellor must make a reference to the chair of the CMA for the constitution of a group under Schedule 4 to the Enterprise and Regulatory Reform Act 2013, for the purpose of advising the Lord Chancellor on what action (if any) should be taken by the Lord Chancellor under section 61.

• (5) Where a reference is made to the chair of the CMA under this section for the constitution of a group, the functions of the CMA under section 60, in relation to the matter concerned, are to be carried out on behalf of the CMA by the group so constituted (including functions under sections 109 to 115 of the Enterprise Act 2002, as applied by section 60(9)).

Duties of the Competition Commission

60

• (1) Where the Lord Chancellor makes a reference under section 59, the CMA under section 59, the Commission must investigate the matter.

• (2) The CMA must then make a report on the matter unless it considers that, as a result of any change of circumstances, no useful purpose would be served by a report.

• (3) If the CMA decides in accordance with subsection (2) not to make a report, it must make a statement setting out the change of circumstances which resulted in that decision.

• (4) The CMA must comply with subsection (2) or (3) within the period of 3 months beginning with the day on which the reference in question is made to the chair of the CMA under section 59.

• (5) A report made under this section must state the CMA's conclusion as to whether any of the matters which is the subject of the report has or is likely to have the effect of preventing, restricting or distorting competition within the market for reserved legal services to a significant extent.

• (6) A report under this section stating the CMA's conclusion that there is, or is likely to be, such an effect must also—

• (a) state whether or not the CMA considers that that effect is justified, and

• (b) if it states that the CMA considers that it is not justified, state its conclusion as to what action, if any, ought to be taken by the Board.

• (7) When determining under subsection (6)(b) any action to be taken by the Board, the CMA must ensure—

• (a) that the action stated is action which the Board has power to take, and

• (b) so far as reasonably possible, that the action stated is compatible with the functions conferred, and obligations imposed, on the Board by or under this Act.

• (8) A report under this section must contain such an account of the CMA's reasons for its conclusions as is expedient, in the opinion of the CMA , for facilitating proper understanding of them.

• (9) Sections 109 to 110A and 111 to 115 of the Enterprise Act 2002 (c. 40) (investigation powers) apply , as they had effect immediately before the date on which section 143 of the Digital Markets, Competition and Consumers Act 2024 came into force, in relation to an investigation under this section as they applied immediately before that date in relation to an investigation made on a reference made to the CMA under Part 3 of that Act (mergers), but as if—

• (a) references in section 109 of that Act (attendance of witnesses and production of documents etc ) to a permitted purpose were references to the purpose of assisting the CMA in carrying out any of its functions in connection with an investigation under this section, and

• (b) the relevant day in any case for the purposes of section 110A of that Act (restriction on powers to impose penalties under section 110) were the day on which the CMA makes a report under subsection (2) or a statement under subsection (3) in connection with that case.

• (10) If the CMA makes a report or a statement under this section it must—

• (a) give a copy to the Lord Chancellor, the Board, the Consumer Panel and the approved regulator to which the report made by the CMA under section 57 relates, and

• (b) publish the report or statement.

Lord Chancellor’s power to give directions

61

• (1) The Lord Chancellor may direct the Board to take such action as the Lord Chancellor considers appropriate in connection with any matter raised in a report made by the CMA under section 57.

• (2) Before giving a direction under subsection (1), the Lord Chancellor must consider any report from the CMA under section 60 on that matter.

• (3) When exercising the power to give a direction under subsection (1), the Lord Chancellor must ensure—

• (a) that the action stated is action which the Board has power to take, and

• (b) so far as reasonably possible, that the action stated in any direction is compatible with the functions conferred, and obligations imposed, on the Board by or under this Act.

• (4) The Lord Chancellor must publish a direction given under this section.

The Board as approved regulator

The Board as an approved regulator

62

• (1) The Lord Chancellor may by order—

• (a) designate the Board as an approved regulator in relation to one or more reserved legal activities;

• (b) modify the functions of the Board, and make such other provision relating to those functions as the Lord Chancellor considers necessary or expedient, with a view to enabling the Board to discharge its functions as an approved regulator effectively and efficiently;

• (c) cancel the Board's designation as an approved regulator in relation to one or more reserved legal activities.

• (2) But the Lord Chancellor may make an order under subsection (1) only if—

• (a) the Board has made a recommendation in accordance with section 66, and

• (b) the order is in the same form as, or in a form which is not materially different from, the draft order annexed to that recommendation.

• (3) If the Lord Chancellor decides not to make an order pursuant to a recommendation made under section 66, the Lord Chancellor must—

• (a) give the Board a notice stating the reasons for that decision, and

• (b) publish the notice.

• (4) In discharging its functions as an approved regulator the Board must take such steps as are necessary to ensure an appropriate financial and organisational separation between the activities of the Board that relate to the carrying out of those functions and the other activities of the Board.

• (5) An order under this section may make such modifications of provision made by or under any enactment (including this Act or any Act passed after this Act) as the Lord Chancellor considers necessary or expedient.

The Board’s designation under section 62(1)(a)

63

• (1) This section applies in relation to an order under section 62(1)(a) (an order designating the Board as an approved regulator).

• (2) Subject to subsection (3), the order may designate the Board as an approved regulator in relation to a reserved legal activity only where—

• (a) a body's designation as an approved regulator in relation to the activity is cancelled under section 45, or

• (b) the activity becomes a reserved legal activity by virtue of an order under section 24.

• (3) Subsection (2) does not prevent the order having effect in advance of an event within paragraph (a) or (b) of that subsection for the purpose of enabling the Board to authorise persons to carry on activities which constitute the reserved legal activity in question with effect from the occurrence of the event.

• (4) The order must ensure that the Board, acting as an approved regulator, may make regulatory arrangements or modify its regulatory arrangements only with the approval of the Board (acting otherwise than in its capacity as an approved regulator or as a licensing authority under Part 5).

Modification of the Board’s functions under section 62(1)(b)

64

• (1) This section applies in relation to an order under section 62(1)(b) (an order modifying the functions of the Board).

• (2) The order may include (among other things) provision conferring on the Board powers to do any of the following—

• (a) to authorise (otherwise than by the grant of a licence under Part 5) persons or any category of persons (whether corporate or unincorporate) to carry on one or more activities which are reserved legal activities in relation to which the Board is designated as an approved regulator;

• (b) to make qualification regulations;

• (c) to make provision as to the educational, training and other requirements to be met by regulated persons who are not relevant authorised persons;

• (d) to make practice rules and conduct rules;

• (e) to make disciplinary arrangements in relation to regulated persons (including discipline rules);

• (f) to make rules requiring the payment of fees specified in or determined in accordance with the rules;

• (g) to make indemnification arrangements;

• (h) to make compensation arrangements;

• (i) to make rules as to the treatment of money (including money held in trust) which is received, held or dealt with for clients, or other persons, by regulated persons, and as to the keeping by such persons of accounts in respect of such money;

• (j) to take steps for the purpose of ascertaining whether or not the provisions of rules or regulations made, or any code or guidance issued, by the Board in its capacity as an approved regulator are being complied with, and to make rules requiring relevant authorised persons to produce documents and provide information for that purpose;

• (k) to delegate any of the functions exercisable by the Board in its capacity as an approved regulator to such persons as it considers appropriate;

• (l) to make regulations or rules providing for appeals to the High Court or another body against decisions made by the Board in its capacity as an approved regulator (including regulations or rules providing for a decision on such an appeal to be final and for orders as to payment of costs).

• (3) The order may—

• (a) provide for any provision of Schedule 14 (licensing authority's powers of intervention)—

• (i) to apply in relation to the Board (in its capacity as an approved regulator) and regulated persons as it applies in relation to a licensing authority and licensed bodies (or managers or employees of such bodies), or

• (ii) to so apply with such modifications as are prescribed by the order, or

• (b) make provision, in relation to the Board (in that capacity) and regulated persons, corresponding to any of the provisions made, in relation to licensing authorities and licensed bodies (or managers or employees of such bodies), by that Schedule.

• (4) For the purposes of giving effect to indemnification arrangements and compensation arrangements, the order may authorise the Board to make rules—

• (a) authorising or requiring the Board to establish and maintain a fund or funds;

• (b) authorising or requiring the Board to take out and maintain insurance with authorised insurers;

• (c) requiring relevant authorised persons or relevant authorised persons of any specific description to take out and maintain insurance with authorised insurers.

• (5) In this section—

• “authorised insurer” means a person within any of the following paragraphs—a person who has permission under Part 4A of the Financial Services and Markets Act 2000 (c. 8) to effect or carry out contracts of insurance of a relevant class;......

• “regulated person” has the meaning given by section 21;

• “relevant authorised person” means a person authorised by the Board (other than by the grant of a licence under Part 5) to carry on one or more activities which are reserved legal activities.

• (6) For the purposes of this section—

• (a) a contract of insurance is of a relevant class if it insures against a risk arising from accident, credit, legal expenses, general liability to third parties, sickness, suretyship or miscellaneous financial loss, and

• (b) the definition of “authorised insurer” in subsection (5) must be read with section 22 of the Financial Services and Markets Act 2000, and any relevant order under that section, and with Schedule 2 to that Act.

Cancellation of the Board’s designation under section 62(1)(c)

65

• (1) This section applies in relation to an order under section 62(1)(c) (cancellation of Board's designation as an approved regulator).

• (2) Where such an order is made, section 46 (other than subsection (4)(b)) and section 47 (transfer arrangements etc on cancellation of approved regulator's designation) apply in relation to the Board and relevant authorised persons as they apply to an approved regulator whose designation is cancelled under section 45 and persons authorised by that approved regulator to carry on activities which are reserved legal activities.

• (3) In this section “relevant authorised persons” has the same meaning as in section 64.

The Board’s power to recommend orders made under section 62

66

• (1) The Board may recommend to the Lord Chancellor that the Lord Chancellor make an order under section 62 in the form of a draft order prepared by the Board and annexed to the recommendation.

• (2) Before making a recommendation under this section, the Board must give each of the persons listed in subsection (3) a notice containing—

• (a) a copy of the proposed recommendation,

• (b) a copy of the proposed draft order, and

• (c) a statement specifying a period within which representations may be made about the proposals.

• (3) Those persons are—

• (a) the Lord Chancellor,

• (b) the CMA ,

• (c) the Consumer Panel,

• (d) the Lord Chief Justice, and

• (e) such other persons as the Board considers it reasonable to consult regarding the proposals.

• (4) The Board must publish a notice given under subsection (2).

• (5) Before making the recommendation, the Board must have regard to any representations duly made (whether by persons within subsection (3) or otherwise).

• (6) If the draft order to be annexed to the recommendation differs from the draft contained in the notice under subsection (2) in a way which is, in the opinion of the Board, material, the Board must, before making the recommendation, publish the draft order along with a statement detailing the changes made and the reasons for those changes.

Effect of the Board’s designation as an approved regulator

67

• (1) The powers of the Board under sections 31 to 51 and 55 (regulatory powers in respect of approved regulators) are not exercisable by it in relation to the Board in its capacity as an approved regulator.

• (2) In section 53 references to an approved regulator do not include the Board in its capacity as an approved regulator.

• (3) Sections 57 to 61 (reports by CMA etc) do not apply in relation to the Board in its capacity as an approved regulator.

Regulatory conflict and the Board as approved regulator

68

• (1) An approved regulator may make a request under subsection (4) if it considers that the regulatory arrangements of the Board (in its capacity as an approved regulator) do not make appropriate provision to prevent a conflict between—

• (a) a requirement of those regulatory arrangements, and

• (b) a requirement of the regulatory arrangements of the approved regulator.

• (2) An affected person in relation to an approved regulator may request the approved regulator to exercise its powers under subsection (1).

• (3) An affected person in relation to the Board may make a request under subsection (4) if the person considers that the regulatory arrangements of the Board (in its capacity as an approved regulator) do not make appropriate provision to prevent a conflict between—

• (a) a requirement of those regulatory arrangements, and

• (b) a requirement of the regulatory arrangements of an approved regulator.

• (4) The request is a request made to the Board (in its capacity as an approved regulator) that it reconsider the provision made by its regulatory arrangements to prevent a regulatory conflict with the conflicting regulator.

• (5) An affected person in relation to the Board may make an application under subsection (6) if the person considers that the regulatory arrangements of an approved regulator do not make appropriate provision to prevent a conflict between—

• (a) a requirement of those regulatory arrangements, and

• (b) a requirement of the regulatory arrangements of the Board (in its capacity as an approved regulator).

• (6) The application is an application to the Board for it to exercise its powers under section 32 to direct the approved regulator—

• (a) to take steps to modify, in such manner as may be specified in the direction, the provision made by its regulatory arrangements to prevent a regulatory conflict with the Board (in its capacity as an approved regulator), or

• (b) if its regulatory arrangements do not make any such provision, to make such provision as may be specified in the direction to prevent such a conflict.

• (7) An affected person in relation to an approved regulator (other than the Board) may make a request under subsection (8) if the person considers that the regulatory arrangements of the approved regulator do not make appropriate provision to prevent a conflict between—

• (a) a requirement of those regulatory arrangements, and

• (b) a requirement of the regulatory arrangements of the Board (in its capacity as an approved regulator).

• (8) The request is a request to the approved regulator that it reconsider the provision made by its regulatory arrangements to prevent a regulatory conflict with the Board.

• (9) The Board (in its capacity as an approved regulator) and any other approved regulator must consider any request made to it under this section.

• (10) Subsections (5) to (8) of section 53 apply in relation to an application under subsection (6) as they apply in relation to an application under that section, except that—

• (a) references to the applicant regulator are to be read as references to the person who made the application, and

• (b) references to the conflicting regulator are to be construed in accordance with this section.

• (11) In this section—

• “affected person” in relation to the Board or any other approved regulator, means—any person authorised by the body to carry on a reserved legal activity, oran employee or manager of such a person;

• “conflicting regulator” means—in a case within subsection (1), the approved regulator making the request, andin a case within subsection (3) or (5), the approved regulator whose regulatory arrangements are considered to conflict with those of the Board.

Functions of approved regulators etc

Modification of the functions of approved regulators etc

69

• (1) The Lord Chancellor may by order modify, or make other provision relating to, the functions of an approved regulator or any other body (other than the Board).

• (2) The Lord Chancellor may make an order under subsection (1) only if—

• (a) the Board has made a recommendation under this section,

• (b) a draft order was annexed to the recommendation, and

• (c) the order is in the same form as, or a form not materially different from, that draft order.

• (3) The Board may make a recommendation under this section only with a view to an order being made which enables the body to which it relates to do one or more of the following—

• (a) to become designated by an order under Part 2 of Schedule 4 as an approved regulator, or designated by an order under Part 1 of Schedule 10 as a licensing authority, in relation to one or more reserved legal activities;

• (b) to authorise persons or any category of persons (whether corporate or unincorporate) to carry on one or more activities which are reserved legal activities in relation to which the body is (at the time the authorisation has effect) designated as an approved regulator, or to make regulatory arrangements;

• (c) to carry out its role as an approved regulator (including its role, if any, as a licensing authority) more effectively or efficiently;

• (d) to become a qualifying regulator under Part 1 of Schedule 18;

• (e) if it is a designated qualifying regulator under section 86A of the Immigration and Asylum Act 1999 (c. 33), to authorise persons to provide any additional advice or services the provision of which amounts to the provision of immigration advice or immigration services.

• (4) Subsections (2) (other than paragraph (a)), (3) and (4) of section 64 apply in relation to an order under this section as they apply in relation to an order under section 62(1)(b) in relation to the Board.

• (5) An order under this section also may make provision in relation to—

• (a) the provision of immigration advice or immigration services, and

• (b) persons authorised to provide such advice and services by the body to which the order relates,

corresponding to the provision which may be made by virtue of section 64(2) to (4) in relation to reserved legal activities and persons authorised to carry on those activities.

• (6) An order under this section may modify provisions made by or under any enactment (including this Act or any Act passed after this Act), prerogative instrument or other instrument or document.

• (7) Any provision made by an order under this section may be expressed to be conditional upon—

• (a) the body to which the order relates being designated by an order under Part 2 of Schedule 4 as an approved regulator, or by an order under Part 1 of Schedule 10 as a licensing authority, in relation to one or more reserved legal activities specified in the proposed draft order, or

• (b) the body to which the order relates becoming a designated qualifying regulator under section 86A of the Immigration and Asylum Act 1999 (c. 33).

• (8) The powers to make an order conferred by this section are without prejudice to any powers (statutory or non-statutory) which an approved regulator or other body may have apart from this section.

Procedural requirements relating to recommendations under section 69

70

• (1) A recommendation may be made under section 69 only with the consent of the approved regulator or other body to which the recommendation relates.

• (2) Before making a recommendation under that section, the Board must publish a draft of—

• (a) the proposed recommendation, and

• (b) the proposed draft order.

• (3) The draft must be accompanied by a notice which states that representations about the proposals may be made to the Board within a specified period.

• (4) Before making the recommendation, the Board must have regard to any representations duly made.

• (5) If the draft order to be annexed to the recommendation differs from the draft published under subsection (2)(b) in a way which is, in the opinion of the Board, material, the Board must, before making the recommendation, publish the draft order along with a statement detailing the changes made and the reasons for those changes.

Part 5 — Alternative business structures

Introductory

Carrying on of activities by licensed bodies

71

• (1) The provisions of this Part have effect for the purpose of regulating the carrying on of reserved legal activities and other activities by licensed bodies.

• (2) In this Act “licensed body” means a body which holds a licence in force under this Part.

“Licensable body”

72

• (1) A body (“B”) is a licensable body if a non-authorised person—

• (a) is a manager of B, or

• (b) has an interest in B.

• (2) A body (“B”) is also a licensable body if—

• (a) another body (“A”) is a manager of B, or has an interest in B, and

• (b) non-authorised persons are entitled to exercise, or control the exercise of, at least 10% of the voting rights in A.

• (3) For the purposes of this Act, a person has an interest in a body if—

• (a) the person holds shares in the body, or

• (b) the person is entitled to exercise, or control the exercise of, voting rights in the body.

• (4) A body may be licensable by virtue of both subsection (1) and subsection (2).

• (5) For the purposes of this Act, a non-authorised person has an indirect interest in a licensable body if the body is licensable by virtue of subsection (2) and the non-authorised person is entitled to exercise, or control the exercise of, voting rights in A.

• (6) In this Act “shares” means—

• (a) in relation to a body with a share capital, allotted shares (within the meaning of the Companies Acts);

• (b) in relation to a body with capital but no share capital, rights to share in the capital of the body;

• (c) in relation to a body without capital, interests—

• (i) conferring any right to share in the profits, or liability to contribute to the losses, of the body, or

• (ii) giving rise to an obligation to contribute to the debts or expenses of the body in the event of a winding up;

and references to the holding of shares, or to a shareholding, are to be construed accordingly.

Licensing authorities

Licensing authorities and relevant licensing authorities

73

• (1) In this Act “licensing authority” means—

• (a) the Board, or

• (b) an approved regulator which is designated as a licensing authority under Part 1 of Schedule 10 and whose licensing rules are approved for the purposes of this Act.

• (2) For the purposes of this Act—

• (a) the Board is a licensing authority in relation to all reserved legal activities, and

• (b) an approved regulator within subsection (1)(b) is a licensing authority in relation to any reserved legal activity in relation to which the designation is made.

• (3) The Board—

• (a) may delegate any of its functions as a licensing authority to such persons as it considers appropriate;

• (b) must take such steps as are necessary to ensure an appropriate financial and organisational separation between the activities of the Board that relate to the carrying out of its functions as a licensing authority and the other activities of the Board.

• (4) In this Part “relevant licensing authority”—

• (a) in relation to a licensed body, means the licensing authority by which the licensed body is authorised to carry on an activity which is a reserved legal activity;

• (b) in relation to an applicant for a licence, means the licensing authority to which the application is made.

Designation of approved regulator as licensing authority

74

Part 1 of Schedule 10 makes provision for approved regulators to be designated, by order, as licensing authorities in relation to one or more reserved legal activities.

Automatic cancellation of designation as licensing authority

75

• (1) This section applies where a body is designated—

• (a) as an approved regulator in relation to a reserved legal activity (“the activity”), and

• (b) as a licensing authority in relation to the activity.

• (2) If the Lord Chancellor makes an order under section 45 cancelling the body's designation as an approved regulator in relation to the activity, the body's designation as a licensing authority in relation to the activity is also cancelled.

• (3) The cancellation takes effect at the same time as cancellation of the body's designation as an approved regulator.

Cancellation of designation as licensing authority by order

76

• (1) The Lord Chancellor may by order cancel an approved regulator's designation as a licensing authority—

• (a) in relation to all the reserved legal activities in relation to which it is designated, or

• (b) in relation to one or more, but not all, of those reserved legal activities,

with effect from a date specified in the order.

• (2) But the Lord Chancellor may only make an order under subsection (1) in accordance with a recommendation made by the Board under subsection (3) or (5).

• (3) The Board must recommend that an order is made cancelling an approved regulator's designation as a licensing authority in relation to one or more reserved legal activities, if—

• (a) the approved regulator applies to the Board for such a recommendation to be made,

• (b) the application is made in such form and manner as may be prescribed by rules made by the Board, and is accompanied by the prescribed fee, and

• (c) the approved regulator publishes a notice giving details of the application in accordance with such requirements as may be specified in rules made by the Board.

• (4) In this section “the prescribed fee”, in relation to an application, means the fee specified in or determined in accordance with rules made by the Board, with the consent of the Lord Chancellor.

• (5) The Board may recommend that an order is made cancelling an approved regulator's designation as a licensing authority in relation to one or more reserved legal activities if it is satisfied—

• (a) that an act or omission of the licensing authority (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 cancel the approved regulator's designation in relation to the activity or activities in question in all the circumstances of the case (including in particular the impact of cancelling the designation on the other regulatory objectives).

• (6) The Board may not determine that it is appropriate to cancel an approved regulator's designation as a licensing authority in relation to an activity or activities unless it is satisfied that the matter cannot be adequately addressed by the Board exercising the powers available to it under sections 31 to 43.

• (7) Part 2 of Schedule 10 makes further provision about the making of recommendations under subsection (5).

• (8) If the Lord Chancellor decides not to make an order in response to a recommendation made under subsection (3) or (5), the Lord Chancellor must give the Board notice of the decision and the reasons for it.

• (9) The Lord Chancellor must publish a notice given under subsection (8).

Cancellation of designation: further provision

77

• (1) This section applies where an approved regulator (“the former authority”) has its designation as a licensing authority in relation to one or more reserved legal activities cancelled—

• (a) by virtue of section 75, or

• (b) by an order under section 76.

• (2) The Lord Chancellor may by order make—

• (a) such modifications of provisions made by or under any enactment (including this Act or any enactment passed after this Act), prerogative instrument or other instrument or document, and

• (b) such transitional or consequential provision,

as the Lord Chancellor considers necessary or expedient in consequence of the cancellation.

• (3) The Lord Chancellor may, by order, make transfer arrangements.

• (4) “Transfer arrangements” are arrangements in accordance with which each consenting licensed body is, from the time the cancellation takes effect, treated as being authorised to carry on each protected activity by virtue of a licence issued under this Part by a licensing authority, in relation to the protected activity, which consents to the transfer arrangements.

• (5) “Consenting licensed body” means a licensed body authorised by the former authority which consents to the transfer arrangements.

• (6) The transfer arrangements—

• (a) must make such provision as is necessary to ensure that, where a licensed body is treated under those arrangements as being authorised to carry on a protected activity by the new authority, that licensed body is subject to the licensing rules of the new authority;

• (b) may make provision requiring amounts held by the former authority which represent amounts paid to it by way of licensing fees by the consenting licensed bodies (or a part of the amounts so held) to be paid to the new authority and treated as if they were amounts paid by those licensed bodies by way of licensing fees to the new authority.

• (7) Subsection (6)(a) is subject to any transitional provision which may be made by the transfer arrangements, including provision modifying the licensing rules of the new authority as they apply to the bodies to whom the transfer arrangements apply.

• (8) The Lord Chancellor may make an order under this section only if—

• (a) the Board has made a recommendation in accordance with section 78, and

• (b) the order is in the same form as, or in a form which is not materially different from, the draft order annexed to that recommendation.

• (9) For the purposes of this section—

• (a) a licensed body is “authorised by the former authority” if immediately before the time the cancellation takes effect the body is, by virtue of a licence under this Part, authorised by the former authority to carry on an activity which is a reserved legal activity to which the cancellation relates, and

• (b) in relation to that body—

• (i) the activity which the body is authorised to carry on as mentioned in paragraph (a) is a “protected activity”, and

• (ii) “the new authority” means the licensing authority by which (in accordance with transfer arrangements under subsection (4)) the body is treated as authorised to carry on a protected activity.

• (10) In this section “licensing fee”, in relation to a licensing authority, means a fee payable by a licensed body under the authority's licensing rules made in accordance with paragraph 21 of Schedule 11.

The Board’s power to recommend orders made under section 77

78

• (1) The Board may recommend to the Lord Chancellor that the Lord Chancellor make an order under section 77 in the form of a draft order prepared by the Board and annexed to the recommendation.

• (2) Before making a recommendation under this section, the Board must publish a draft of—

• (a) the proposed recommendation, and

• (b) the proposed draft order.

• (3) The draft must be accompanied by a notice which states that representations about the proposals may be made to the Board within a specified period.

• (4) Before making the recommendation, the Board must have regard to any representations duly made.

• (5) If the draft order to be annexed to the recommendation differs from the draft published under subsection (2)(b) in a way which is, in the opinion of the Board, material, the Board must, before making the recommendation, publish the draft order along with a statement detailing the changes made and the reasons for those changes.

Cancellation of designation: powers of entry etc

79

• (1) This section applies where an approved regulator (“the former authority”) has its designation in relation to one or more reserved legal activities cancelled by by virtue of section 75 or an order under section 76.

• (2) The Board may request the former authority to provide assistance to the new authority and the Board, for the purpose of continuing regulation.

• (3) On an application by a person appointed by the Board to act on its behalf, a judge of the High Court, Circuit judge or justice of the peace may issue a warrant authorising that person to—

• (a) enter and search the premises of the former authority, and

• (b) take possession of any written or electronic records found on the premises.

• (4) A person so authorised may, for the purpose of continuing regulation, take copies of written or electronic records found on a search carried out by virtue of the warrant.

• (5) The judge or justice of the peace may not issue the warrant unless satisfied that its issue is necessary or desirable for the purpose of continuing regulation.

• (6) The Lord Chancellor must make regulations—

• (a) specifying further matters which a judge or justice of the peace must be satisfied of, or matters which a judge or justice of the peace must have regard to, before issuing a warrant, and

• (b) regulating the exercise of a power conferred by a warrant issued under subsection (3) or by subsection (4) (whether by restricting the circumstances in which a power may be exercised, by specifying conditions to be complied with in the exercise of a power, or otherwise).

• (7) Regulations under subsection (6)(b) must in particular make provision as to circumstances in which written or electronic records of which a person has taken possession by virtue of a warrant issued under subsection (3) may be copied or must be returned.

• (8) But the Lord Chancellor may not make regulations under subsection (6) unless—

• (a) they are made in accordance with a recommendation made by the Board, or

• (b) the Lord Chancellor has consulted the Board about the making of the regulations.

• (9) The Board must make rules as to the persons it may appoint for the purposes of subsection (3).

• (10) For the purposes of this section—

• “authorised by the former authority”, “protected activity” and “new authority” have the same meaning as for the purposes of section 77;

• “the purpose of continuing regulation” means the purpose of enabling bodies authorised by the former authority to continue to be authorised and regulated in relation to the protected activity.

Appeals

Functions of appellate bodies

80

• (1) The Lord Chancellor may by order—

• (a) establish a body to hear and determine appeals from decisions, made by a person specified in the order in the person's capacity as a licensing authority, which are appealable under this Part or licensing rules made by the person;

• (b) modify, or make any other provision relating to, the functions of a body within subsection (2) or any other body, for the purpose of enabling the body to hear and determine appeals from such decisions.

• (2) The bodies mentioned in subsection (1)(b) are—

• (a) the Solicitors Disciplinary Tribunal;

• (b) the Discipline and Appeals Committee established by the Council of Licensed Conveyancers under section 25 of the Administration of Justice Act 1985 (c. 61).

• (3) The Lord Chancellor may make an order under subsection (1) only if—

• (a) the Board has made a recommendation in accordance with section 81,

• (b) a draft order was annexed to the recommendation, and

• (c) the order is in the same form as, or not materially different from, that draft order.

• (4) An order under this section may—

• (a) make provision as to the payment of fees, and award of costs, in relation to such appeals;

• (b) modify provisions made by or under any enactment (including this Act or any Act passed after this Act), prerogative instrument or other instrument or document.

• (5) Any provision made by an order under this section may be expressed to be conditional upon the person specified in the order being designated by an order under Part 1 of Schedule 10 as a licensing authority in relation to one or more reserved legal activities.

• (6) The powers to make an order conferred by this section are without prejudice to any powers (statutory or non-statutory) which a body may have apart from this section.

Procedural requirements relating to recommendations under section 80

81

• (1) A recommendation may be made under section 80 only with the consent of—

• (a) the person from whose decisions the appeals are to be made, and

• (b) where the recommendation is for an order under section 80(1)(b), the body to which appeals are to be made.

• (2) Before making a recommendation under that section, the Board must publish a draft of—

• (a) the proposed recommendation, and

• (b) the proposed draft order.

• (3) The draft must be accompanied by a notice which states that representations about the proposals may be made to the Board within a specified period.

• (4) Before making any recommendation, the Board must have regard to any representations duly made.

• (5) If the draft order to be annexed to the recommendation differs from the draft published under subsection (2)(b) in a way which is, in the opinion of the Board, material, the Board must, before making the recommendation, publish the draft order along with a statement detailing the changes made and the reasons for those changes.

Policy statement

Licensing authority policy statement

82

• (1) Each licensing authority must prepare and issue a statement of policy as to how, in exercising its functions under this Part, it will comply with the requirements of section 28 (or, in the case of the Board, section 3) (duties to promote regulatory objectives etc).

• (2) A licensing authority may issue a statement under subsection (1) only with the approval of the Board (acting otherwise than in its capacity as a licensing authority or as an approved regulator).

• (3) A licensing authority may, with the approval of the Board (acting otherwise than in its capacity as a licensing authority or as an approved regulator), alter or replace a statement issued under this section.

• (4) If it does so, it must issue the altered or replacement statement.

• (5) In exercising its functions under this Part, a licensing authority must have regard to the statement issued by it under this section.

• (6) A licensing authority must publish a statement issued by it under this section.

Licensing rules

Licensing rules

83

• (1) The Board (acting in its capacity as a licensing authority)—

• (a) must make suitable licensing rules before the end of the period of 12 months beginning with the day on which a licensable body first becomes entitled to make an application to it for a licence by virtue of a decision of the Board (acting otherwise than in its capacity as a licensing authority or as an approved regulator) under Schedule 12;

• (b) may make or modify its licensing rules only with the approval of the Board (acting otherwise than in its capacity as a licensing authority or as an approved regulator).

• (2) In subsection (1)(a), “suitable licensing rules” means licensing rules which constitute suitable regulatory arrangements (within the meaning of Schedule 12) in respect of licensable bodies entitled by virtue of a decision under that Schedule to make an application to the Board for a licence.

• (3) Licensing rules made by an approved regulator have effect only at a time when the approved regulator is a licensing authority (subject to any provision made by an order under section 25).

• (4) Licensing rules of a licensing authority are rules as to—

• (a) the licensing by the authority of licensable bodies, and

• (b) the regulation by the licensing authority of licensable bodies licensed by it, and their managers and employees.

• (5) Licensing rules of a licensing authority must contain—

• (a) appropriate qualification regulations in respect of licensable bodies to which the licensing authority proposes to issue licences under this Part,

• (b) provision as to how the licensing authority, when considering the regulatory objectives (in compliance with its duties under section 3(2) or 28(2)) in connection with an application for a licence, should take account of the objective of improving access to justice,

• (c) appropriate arrangements (including conduct rules, discipline rules and practice rules) under which the licensing authority will be able to regulate the conduct of bodies licensed by it, and their managers and employees,

• (d) appropriate indemnification arrangements,

• (e) appropriate compensation arrangements,

• (f) the provision required by sections 52 and 54 (resolution of regulatory conflict) (including those provisions as applied by section 103),

• (g) the provision required by sections 112 and 145 (requirements imposed in relation to the handling of complaints), and

• (h) any other provision required to be contained in licensing rules by this Act.

• (6) Without prejudice to the generality of subsection (4), licensing rules of a licensing authority may contain any provision authorised by this Act.

• (7) Schedule 11 makes further provision as to the contents of licensing rules.

• (8) Subsections (5) to (7) are subject to—

• (a) section 105 (which exempts trade unions from certain provisions), and

• (b) section 106 (which provides for the modification of licensing rules in their application to bodies to which that section applies).

• (9) Licensing rules may not apply to bodies to which section 106 applies in a way which is different from the way they apply to other bodies, except by virtue of an order under that section.

Licensing

Application for licence

84

• (1) A licensing authority other than the Board must determine any application for a licence which is made to it.

• (2) The Board (acting in its capacity as a licensing authority) may determine an application for a licence which is made to it only if the applicant is entitled to make the application by virtue of a decision of the Board (acting otherwise than in its capacity as a licensing authority) under Schedule 12.

• (3) A licensing authority may not grant an application for a licence unless it is satisfied that if the licence is granted the applicant will comply with its licensing rules.

• (4) If the licensing authority grants an application for a licence, it must issue the licence as soon as reasonably practicable.

• (5) The licence has effect from the date on which it is issued.

• (6) References in this section to an application for a licence are to an application for a licence which is—

• (a) made to a licensing authority by a licensable body, in accordance with the authority's licensing rules, and

• (b) accompanied by the required application fee (if any).

Terms of licence

85

• (1) A licence issued under section 84 must specify—

• (a) the activities which are reserved legal activities and which the licensed body is authorised to carry on by virtue of the licence, and

• (b) any conditions subject to which the licence is granted.

• (2) If an order under section 106 has been made in relation to the licensed body, the licence must also specify the terms of the order.

• (3) In the case of a licensing authority other than the Board, the licence may authorise the licensed body to carry on activities which are reserved legal activities only if the licensing authority is designated in relation to the reserved legal activities in question.

• (4) A licence must be granted subject to the condition that—

• (a) any obligation which may from time to time be imposed on the licensed body or a person within subsection (5) by or under the licensing authority's licensing rules is complied with, and

• (b) any other obligations imposed on the licensed body or a person within that subsection by or under this or any other enactment (whether passed before or after this Act) are complied with.

• (5) The persons mentioned in subsection (4) are the managers and employees of a licensed body, and non-authorised persons having an interest or an indirect interest, or holding a material interest, in the licensed body (in their capacity as such).

• (6) A licence may be granted subject to such other conditions as the licensing authority considers appropriate.

• (7) Those conditions may include conditions as to the non-reserved activities which the licensed body may or may not carry on.

• (8) In this Part references to the terms of the licence are to the matters listed in subsections (1) and (2).

Modification of licence

86

• (1) A licensing authority may modify the terms of a licence granted by it—

• (a) if the licensed body applies to the licensing authority, in accordance with its licensing rules, for it to do so;

• (b) in such other circumstances as may be specified in its licensing rules.

• (2) If a licensed body is a body to which section 106 applies, the licensing authority may modify the terms of its licence in accordance with sections 106 and 107.

• (3) A licensing authority modifies the terms of a licensed body's licence by giving the licensed body notice in writing of the modifications; and the modifications have effect from the time the licensing authority gives the licensed body the notice or such later time as may be specified in the notice.

• (4) The licensing authority's power under this section is subject to—

• (a) section 85(3) and (4), and

• (b) licensing rules made under paragraph 6 of Schedule 11.

Registers of licensed bodies

87

• (1) Each licensing authority must keep a register containing the names and places of business of all bodies which hold or have held licences granted by the licensing authority.

• (2) Where any licence held by a body is for the time being suspended, the licensing authority shall cause that fact to be noted in the register in the entry for that body.

• (3) A licensing authority must provide facilities for making the information contained in the entries in its register available for inspection by any person during office hours and without payment.

• (4) The Board may make rules about—

• (a) the register to be kept by the Board under this section, and

• (b) the register to be kept under this section by each licensing authority designated under Part 1 of Schedule 10.

• (5) Rules under subsection (4) may in particular prescribe any further information which must be contained in an entry in the register in relation to a licensed body or former licensed body.

Evidence of status

88

• (1) A certificate signed by an officer of a licensing authority appointed for the purpose and stating one of the matters within subsection (2) is, unless the contrary is proved, evidence of the facts stated in the certificate.

• (2) The matters are that any person does or does not, or did or did not at any time, hold a licence granted by the licensing authority under this Part.

• (3) A certificate purporting to be so signed is to be taken to have been so signed unless the contrary is proved.

Ownership of licensed bodies

Ownership of licensed bodies

89

Schedule 13 makes provision about the holding of certain interests in licensed bodies by non-authorised persons.

Regulation of licensed bodies

Duties of non-authorised persons

90

A non-authorised person who is an employee or manager of a licensed body, or has an interest or an indirect interest, or holds a material interest, in a licensed body, must not do anything which causes or substantially contributes to a breach by—

• (a) the licensed body, or

• (b) an employee or manager of the licensed body who is an authorised person in relation to an activity which is a reserved legal activity,

of the duties imposed on them by section 176.

Duties of Head of Legal Practice

91

• (1) The Head of Legal Practice of a licensed body must—

• (a) take all reasonable steps to ensure compliance with the terms of the licensed body's licence, and

• (b) as soon as reasonably practicable, report to the licensing authority any failure to comply with the terms of the licence.

• (2) Subsection (1) does not apply to the terms of the licence so far as they require compliance with licensing rules made under paragraph 20 of Schedule 11 (accounts) (as to which see section 92).

• (3) The Head of Legal Practice of a licensed body must—

• (a) take all reasonable steps to ensure that the licensed body, and any of its employees or managers who are authorised persons in relation to an activity which is a reserved legal activity, comply with the duties imposed by section 176, and

• (b) as soon as reasonably practicable, report to the licensing authority such failures by those persons to comply with those duties as may be specified in licensing rules.

• (4) The Head of Legal Practice of a licensed body must—

• (a) take all reasonable steps to ensure that non-authorised persons subject to the duty imposed by section 90 in relation to the licensed body comply with that duty, and

• (b) as soon as reasonably practicable, report to the licensing authority any failure by a non-authorised person to comply with that duty.

Duties of Head of Finance and Administration

92

• (1) The Head of Finance and Administration of a licensed body must take all reasonable steps to ensure compliance with licensing rules made under paragraph 20 of Schedule 11 (accounts).

• (2) The Head of Finance and Administration must report any breach of those rules to the licensing authority as soon as reasonably practicable.

Information

93

• (1) The relevant licensing authority in relation to a licensed body may by notice require a person within subsection (2)—

• (a) to provide information, or information of a description, specified in the notice, or

• (b) produce documents, or documents of a description, specified in the notice,

for the purpose of enabling the licensing authority to ascertain whether the terms of the licensed body's licence are being, or have been, complied with.

• (2) The persons are—

• (a) the licensed body;

• (b) any manager or employee (or former manager or employee) of the licensed body;

• (c) any non-authorised person who has an interest or an indirect interest, or holds a material interest, in the licensed body.

• (3) A notice under subsection (1)—

• (a) may specify the manner and form in which any information is to be provided;

• (b) must specify the period within which the information is to be provided or the document produced;

• (c) may require the information to be provided, or the document to be produced, to the licensing authority or to a person specified in the notice.

• (4) The licensing authority may, by notice, require a person within subsection (2) (or a representative of such a person) to attend at a time and place specified in the notice to provide an explanation of any information provided or document produced under this section.

• (5) The licensing authority may pay to any person such reasonable costs as may be incurred by that person in connection with—

• (a) the provision of any information, or production of any document, by that person pursuant to a notice under subsection (1), or

• (b) that person's compliance with a requirement imposed under subsection (4).

• (6) The licensing authority, or a person specified under subsection (3)(c) in a notice, may take copies of or extracts from a document produced pursuant to a notice under subsection (1).

• (7) For the purposes of this section and section 94, references to a licensed body include a body which was, but is no longer, a licensed body.

Enforcement of notices under section 93

94

• (1) Where a person is unable to comply with a notice given to the person under section 93, the person must give the licensing authority a notice to that effect stating the reasons why the person cannot comply.

• (2) If a person refuses or otherwise fails to comply with a notice under section 93, the licensing authority may apply to the High Court for an order requiring the person to comply with the notice or with such directions for the like purpose as may be contained in the order.

Financial penalties

95

• (1) A licensing authority may, in accordance with its licensing rules, impose on a licensed body, or a manager or employee of a licensed body, a penalty of such amount as it considers appropriate.

• (2) The amount must not exceed the maximum amount prescribed under subsection (3).

• (3) The Board must make rules prescribing the maximum amount of a penalty which may be imposed under this section.

• (4) Rules may be made under subsection (3) only with the consent of the Lord Chancellor.

• (5) A penalty under this section is payable to the licensing authority.

• (6) For the purposes of this section—

• (a) references to a licensed body are to a body which was a licensed body at the time the act or omission in respect of which the penalty is imposed occurred, and

• (b) references to a manager or employee of a licensed body are to a person who was a manager or employee of a licensed body at that time,

(whether or not the body subsequently ceased to be a licensed body or the person subsequently ceased to be a manager or employee).

• (7) In sections 96 and 97 references to a “penalty” are to a penalty under this section.

Appeals against financial penalties

96

• (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.

Recovery of financial penalties

97

• (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).

Referral of employees etc to appropriate regulator

98

• (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.