Legal Services Act 2007
2007 c. 29
An Act to make provision for the establishment of the Legal Services Board and in respect of its functions; to make provision for, and in connection with, the regulation of persons who carry on certain legal activities; to make provision for the establishment of the Office for Legal Complaints and for a scheme to consider and determine legal complaints; to make provision about claims management services and about immigration advice and immigration services; to make provision in respect of legal representation provided free of charge; to make provision about the application of the Legal Profession and Legal Aid (Scotland) Act 2007; to make provision about the Scottish legal services ombudsman; and for connected purposes.
[30th October 2007]
Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
(1) In this Act a reference to “the regulatory objectives” is a reference to the objectives of—
(a) protecting and promoting the public interest;
(b) supporting the constitutional principle of the rule of law;
(c) improving access to justice;
(d) protecting and promoting the interests of consumers;
(e) promoting competition in the provision of services within subsection (2);
(f) encouraging an independent, strong, diverse and effective legal profession;
(g) increasing public understanding of the citizen's legal rights and duties;
(h) promoting and maintaining adherence to the professional principles;
(i) promoting the prevention and detection of economic crime.
(2) The services within this subsection are services such as are provided by authorised persons (including services which do not involve the carrying on of activities which are reserved legal activities).
(3) The “professional principles” are—
(a) that authorised persons should act with independence and integrity,
(b) that authorised persons should maintain proper standards of work,
(c) that authorised persons should act in the best interests of their clients,
(d) that persons who exercise before any court a right of audience, or conduct litigation in relation to proceedings in any court, by virtue of being authorised persons should comply with their duty to the court to act with independence in the interests of justice, and
(e) that the affairs of clients should be kept confidential.
(4) In this section “authorised persons” means authorised persons in relation to activities which are reserved legal activities.
(5) In subsection (1)(i) “economic crime” has the meaning given by section 193(1) of the Economic Crime and Corporate Transparency Act 2023
3 The Board's duty to promote the regulatory objectives etc
(1) In discharging its functions the Board must comply with the requirements of this section.
(2) The Board must, so far as is reasonably practicable, act in a way—
(a) which is compatible with the regulatory objectives, and
(b) which the Board considers most appropriate for the purpose of meeting those objectives.
(3) The Board must have regard to—
(a) the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed, and
(b) any other principle appearing to it to represent the best regulatory practice.
The Board must assist in the maintenance and development of standards in relation to—
(a) the regulation by approved regulators of persons authorised by them to carry on activities which are reserved legal activities, and
(b) the education and training of persons so authorised.
In managing its affairs, the Board must have regard to such generally accepted principles of good corporate governance as it is reasonable to regard as applicable to it.
(1) The Board must prepare a report (“the annual report”) for each financial year.
(2) The annual report must deal with—
(a) the discharge of the Board's functions,
(b) the extent to which, in the Board's opinion, the Board has met the regulatory objectives, and
(c) such other matters as the Lord Chancellor may from time to time direct.
(3) As soon as reasonably practicable after the end of each financial year, the Board must give the Lord Chancellor a copy of the annual report prepared for that year.
(4) The Lord Chancellor must lay a copy of the annual report before Parliament.
(5) In this section “financial year” means—
(a) the period beginning with the day on which the Board is established and ending with the next following 31 March, and
(b) each successive period of 12 months.
(1) The Board must establish and maintain a panel of persons (to be known as “the Consumer Panel”) to represent the interests of consumers.
(2) The Consumer Panel is to consist of such consumers, or persons representing the interests of consumers, as the Board may appoint with the approval of the Lord Chancellor.
(3) The Board must appoint one of the members of the Consumer Panel to be the chairman of the Panel.
(4) The Board must secure that the membership of the Consumer Panel is such as to give a fair degree of representation to both—
(a) those who are using (or are or may be contemplating using), in connection with businesses carried on by them, services provided by persons who are authorised persons in relation to activities which are reserved legal activities, and
(b) those who are using (or are or may be contemplating using) such services otherwise than in connection with businesses carried on by them.
(5) The Consumer Panel must not include any person who is—
(a) a member of the Board or of its staff;
(b) a member of the Office for Legal Complaints (see Part 6), an ombudsman appointed by it or a member of its staff appointed under paragraph 13 of Schedule 15;
(c) a member of the governing body, or of the staff, of an approved regulator;
(d) an authorised person in relation to an activity which is a reserved legal activity;
(e) an authorised person (within the meaning given in section 31 of the Financial Services and Markets Act 2000 (authorised persons)) in relation to regulated claims management activity (within the meaning given by section 417(1) of that Act (definitions));
(f) an advocate in Scotland;
(g) a solicitor in Scotland;
(h) a member of the Bar of Northern Ireland; or
(i) a solicitor of the Court of Judicature of Northern Ireland.
(6) The chairman and other members of the Consumer Panel are to be—
(a) appointed for a fixed period, and on other terms and conditions, determined by the Board, and
(b) paid by the Board in accordance with provision made by or under the terms of appointment.
(7) But a person may be removed from office in accordance with those terms and conditions only with the approval of the Lord Chancellor.
(8) A person who ceases to be chairman or another member of the Consumer Panel may be re-appointed.
9 Committees and the procedure of the Consumer Panel
(1) The Consumer Panel may make such arrangements as it thinks fit for committees established by the Panel to give advice to the Panel about matters relating to the carrying out of the Panel's functions.
(2) The Consumer Panel may make such other arrangements for regulating its own procedure, and for regulating the procedure of the committees established by it, as it thinks fit.
(3) Those arrangements may include arrangements as to quorums and as to the making of decisions by a majority.
(4) The committees established by the Consumer Panel may include committees the membership of which includes persons who are not members of the Panel.
(5) The membership of every committee established by the Consumer Panel must contain at least one person who is a member of the Panel.
(6) Where a person who is not a member of the Consumer Panel is a member of a committee established by it, the Board may pay to that person such remuneration and expenses as the Board may determine.
(1) The Board must consider any representations made to it by the Consumer Panel.
(2) If the Board disagrees with a view expressed, or proposal made, in the representations, it must give the Consumer Panel a notice to that effect stating its reasons for disagreeing.
(3) The Consumer Panel may publish such information as it thinks fit about any representations made by it to the Board.
(4) Where the Consumer Panel publishes information about any representations made by it, the Board must publish any notice it gives under subsection (2) in respect of those representations.
11 Advice and research functions of the Consumer Panel
(1) The Consumer Panel may, at the request of the Board—
(a) carry out research for the Board;
(b) give advice to the Board.
(2) The Board must consider any advice given and the results of any research carried out under this section.
(3) The Consumer Panel may publish such information as it thinks fit about advice it gives, and about the results of research carried out by it, under this section.
12 Meaning of “reserved legal activity” and “legal activity”
(1) In this Act “reserved legal activity” means—
(a) the exercise of a right of audience;
(b) the conduct of litigation;
(c) reserved instrument activities;
(d) probate activities;
(e) notarial activities;
(f) the administration of oaths.
(2) Schedule 2 makes provision about what constitutes each of those activities.
(3) In this Act “legal activity” means—
(a) an activity which is a reserved legal activity within the meaning of this Act as originally enacted, and
(b) any other activity which consists of one or both of the following—
(i) the provision of legal advice or assistance in connection with the application of the law or with any form of resolution of legal disputes;
(ii) the provision of representation in connection with any matter concerning the application of the law or any form of resolution of legal disputes.
(4) But “legal activity” does not include any activity of a judicial or quasi-judicial nature (including acting as a mediator).
(5) For the purposes of subsection (3) “legal dispute” includes a dispute as to any matter of fact the resolution of which is relevant to determining the nature of any person's legal rights or liabilities.
(6) Section 24 makes provision for adding legal activities to the reserved legal activities.
13 Entitlement to carry on a reserved legal activity
(1) The question whether a person is entitled to carry on an activity which is a reserved legal activity is to be determined solely in accordance with the provisions of this Act.
(2) A person is entitled to carry on an activity (“the relevant activity”) which is a reserved legal activity where—
(a) the person is an authorised person in relation to the relevant activity, or
(b) the person is an exempt person in relation to that activity.
(3) Subsection (2) is subject to section 23 (transitional protection for non-commercial bodies).
(4) Nothing in this section or section 23 affects section 84 of the Immigration and Asylum Act 1999 (c. 33) (which prohibits the provision of immigration advice and immigration services except by certain persons).
14 Offence to carry on a reserved legal activity if not entitled
(1) It is an offence for a person to carry on an activity (“the relevant activity”) which is a reserved legal activity unless that person is entitled to carry on the relevant activity.
(2) In proceedings for an offence under subsection (1), it is a defence for the accused to show that the accused did not know, and could not reasonably have been expected to know, that the offence was being committed.
(3) A person who is guilty of an offence under subsection (1) is liable—
(a) on summary conviction, to imprisonment for a term not exceeding the general limit in a magistrates’ court or a fine not exceeding the statutory maximum (or both), and
(b) on conviction on indictment, to imprisonment for a term not exceeding 2 years or a fine (or both).
(4) A person who is guilty of an offence under subsection (1) by reason of an act done in the purported exercise of a right of audience, or a right to conduct litigation, in relation to any proceedings or contemplated proceedings is also guilty of contempt of the court concerned and may be punished accordingly.
(5) In relation to an offence under subsection (1) committed before 2 May 2022, the reference in subsection (3)(a) to the general limit in a magistrates’ court is to be read as a reference to 6 months.
15 Carrying on of a reserved legal activity: employers and employees etc
(1) This section applies for the interpretation of references in this Act to a person carrying on an activity which is a reserved legal activity.
(2) References to a person carrying on an activity which is a reserved legal activity include a person (“E”) who—
(a) is an employee of a person (“P”), and
(b) carries on the activity in E's capacity as such an employee.
(3) For the purposes of subsection (2), it is irrelevant whether P is entitled to carry on the activity.
(4) P does not carry on an activity (“the relevant activity”) which is a reserved legal activity by virtue of E carrying it on in E's capacity as an employee of P, unless the provision of relevant services to the public or a section of the public (with or without a view to profit) is part of P's business.
(5) Relevant services are services which consist of or include the carrying on of the relevant activity by employees of P in their capacity as employees of P.
(6) Where P is an independent trade union, persons provided with relevant services do not constitute the public or a section of the public where—
(a) the persons are provided with the relevant services by virtue of their membership or former membership of P or of another person's membership or former membership of P, and
(b) the services are excepted membership services.
(7) Subject to subsection (8), “excepted membership services” means relevant services which relate to or have a connection with—
(a) relevant activities of a member, or former member, of the independent trade union;
(b) any other activities carried on for the purposes of or in connection with, or arising from, such relevant activities;
(c) any event which has occurred (or is alleged to have occurred) in the course of or in connection with such relevant activities or activities within paragraph (b);
(d) activities carried on by a person for the purposes of or in connection with, or arising from, the person's membership of the independent trade union;
and such other relevant services as the Lord Chancellor may by order specify.
(8) The Lord Chancellor may by order make provision about the circumstances in which relevant services do or do not relate to, or have a connection with, the matters mentioned in paragraphs (a) to (d) of subsection (7).
(9) Subject to that, the Lord Chancellor may by order make provision about—
(a) what does or does not constitute a section of the public;
(b) the circumstances in which the provision of relevant services to the public or a section of the public does or does not form part of P's business.
(10) The Lord Chancellor may make an order under subsection (7), (8) or (9) only on the recommendation of the Board.
(11) If P is a body, references to an employee of P include references to a manager of P.
(12) In subsection (7), “relevant activities”, in relation to a person who is or was a member of an independent trade union, means any employment (including self-employment), trade, occupation or other activity to which the person's membership of the trade union relates or related.
16 Offence to carry on reserved legal activity through person not entitled
(1) Where subsection (2) applies it is an offence for a person (“P”) to carry on an activity (“the relevant activity”) which is a reserved legal activity, despite P being entitled to carry on the relevant activity.
(2) This subsection applies if—
(a) P carries on the relevant activity by virtue of an employee of P (“E”) carrying it on in E's capacity as such an employee, and
(b) in carrying on the relevant activity, E commits an offence under section 14.
(3) If P is a body, references in subsection (2) to an employee of P include references to a manager of P.
(4) In proceedings for an offence under subsection (1), it is a defence for the accused to show that the accused took all reasonable precautions and exercised all due diligence to avoid committing the offence.
(5) A person who is guilty of an offence under subsection (1) is liable—
(a) on summary conviction, to imprisonment for a term not exceeding the general limit in a magistrates’ court or a fine not exceeding the statutory maximum (or both), and
(b) on conviction on indictment, to imprisonment for a term not exceeding 2 years or a fine (or both).
(6) A person who is guilty of an offence under subsection (1) by reason of an act done in the purported exercise of a right of audience, or a right to conduct litigation, in relation to any proceedings or contemplated proceedings is also guilty of contempt of the court concerned and may be punished accordingly.
(7) In relation to an offence under subsection (1) committed before 2 May 2022, the reference in subsection (5)(a) to the general limit in a magistrates’ court is to be read as a reference to 6 months.
(1) It is an offence for a person—
(a) wilfully to pretend to be entitled to carry on any activity which is a reserved legal activity when that person is not so entitled, or
(b) with the intention of implying falsely that that person is so entitled, to take or use any name, title or description.
(2) A person who is guilty of an offence under subsection (1) is liable—
(a) on summary conviction, to imprisonment for a term not exceeding the general limit in a magistrates’ court or a fine not exceeding the statutory maximum (or both), and
(b) on conviction on indictment, to imprisonment for a term not exceeding 2 years or a fine (or both).
(3) In relation to an offence under subsection (1) committed before 2 May 2022, the reference in subsection (2)(a) to the general limit in a magistrates’ court is to be read as a reference to 6 months.
(1) For the purposes of this Act “authorised person”, in relation to an activity (“the relevant activity”) which is a reserved legal activity, means —
(a) a person who is authorised to carry on the relevant activity by a relevant approved regulator in relation to the relevant activity (other than by virtue of a licence under Part 5), or
(b) a licensable body which, by virtue of such a licence, is authorised to carry on the relevant activity by a licensing authority in relation to the reserved legal activity.
(2) A licensable body may not be authorised to carry on the relevant activity as mentioned in subsection (1)(a).
(3) But where a body (“A”) which is authorised as mentioned in subsection (1)(a) becomes a licensable body, the body is deemed by virtue of this subsection to continue to be so authorised from that time until the earliest of the following events—
(a) the end of the period of 90 days beginning with the day on which that time falls;
(b) the time from which the relevant approved regulator determines this subsection is to cease to apply to A;
(c) the time when A ceases to be a licensable body.
(4) Subsection (2) is subject to Part 2 of Schedule 5 (by virtue of which licensable bodies may be deemed to be authorised as mentioned in subsection (1)(a) in relation to certain activities during a transitional period).
(5) A person other than a licensable body may not be authorised to carry on the relevant activity as mentioned in subsection (1)(b).
(6) But where a body (“L”) which is authorised as mentioned in subsection (1)(b) ceases to be a licensable body, the body is deemed by virtue of this subsection to continue to be so authorised from that time until the earliest of the following events—
(a) the end of the period of 90 days beginning with the day on which that time falls;
(b) the time from which the relevant licensing authority determines this subsection is to cease to apply to L;
(c) the time when L becomes a licensable body.
In this Act, “exempt person”, in relation to an activity (“the relevant activity”) which is a reserved legal activity, means a person who, for the purposes of carrying on the relevant activity, is an exempt person by virtue of—
(a) Schedule 3 (exempt persons), or
(b) paragraph 13 or 18 of Schedule 5 (additional categories of exempt persons during transitional period).
20 Approved regulators and relevant approved regulators
(1) In this Act, the following expressions have the meaning given by this section—
“approved regulator”;
“relevant approved regulator”.
(2) “Approved regulator” means—
(a) a body which is designated as an approved regulator by Part 1 of Schedule 4 or under Part 2 of that Schedule (or both) and whose regulatory arrangements are approved for the purposes of this Act, and
(b) if an order under section 62(1)(a) has effect, the Board.
(3) An approved regulator is a “relevant approved regulator” in relation to an activity which is a reserved legal activity if—
(a) the approved regulator is designated by Part 1, or under Part 2, of Schedule 4 in relation to that reserved legal activity, or
(b) where the approved regulator is the Board, it is designated in relation to that reserved legal activity by an order under section 62(1)(a).
(4) An approved regulator is a “relevant approved regulator” in relation to a person if the person is authorised by the approved regulator to carry on an activity which is a reserved legal activity.
(5) Schedule 4 makes provision with respect to approved regulators other than the Board.
In that Schedule—
(a) Part 1 designates certain bodies as approved regulators in relation to certain reserved legal activities,
(b) Part 2 makes provision for bodies to be designated by order as approved regulators in relation to one or more reserved legal activities, and
(c) Part 3 makes provision relating to the approval of changes to an approved regulator's regulatory arrangements.
(6) An approved regulator may authorise persons to carry on any activity which is a reserved legal activity in respect of which it is a relevant approved regulator.
(1) In this Act references to the “regulatory arrangements” of a body are to—
(a) its arrangements for authorising persons to carry on reserved legal activities,
(b) its arrangements (if any) for authorising persons to provide immigration advice or immigration services,
(c) its practice rules,
(d) its conduct rules,
(e) its disciplinary arrangements in relation to regulated persons (including its discipline rules),
(f) its qualification regulations,
(g) its indemnification arrangements,
(h) its compensation arrangements,
(i) any of its other rules or regulations (however they may be described), and any other arrangements, which apply to or in relation to regulated persons, other than those made for the purposes of any function the body has to represent or promote the interests of persons regulated by it, and
(j) its licensing rules (if any), so far as not within paragraphs (a) to (i),
(whether or not those arrangements, rules or regulations are contained in, or made under, an enactment).
(2) In this Act—
“compensation arrangements”, in relation to a body, means arrangements to provide for grants or other payments for the purposes of relieving or mitigating losses or hardship suffered by persons in consequence of—
negligence or fraud or other dishonesty on the part of any persons whom the body has authorised to carry on activities which constitute a reserved legal activity, or of employees of theirs, in connection with their activities as such authorised persons, and
failure, on the part of regulated persons, to account for money received by them in connection with their activities as such regulated persons;
“conduct rules”, in relation to a body, means any rules or regulations (however they may be described) as to the conduct required of regulated persons;
“discipline rules”, in relation to a body, means any rules or regulations (however they may be described) as to the disciplining of regulated persons;
“indemnification arrangements”, in relation to a body, means arrangements for the purpose of ensuring the indemnification of those who are or were regulated persons against losses arising from claims in relation to any description of civil liability incurred by them, or by employees or former employees of theirs, in connection with their activities as such regulated persons;
“practice rules”, in relation to a body, means any rules or regulations (however they may be described) which govern the practice of regulated persons;
“qualification regulations”, in relation to a body, means—
any rules or regulations relating to—
the education and training which persons must receive, or
any other requirements which must be met by or in respect of them,
(in order for them to be authorised by the body to carry on an activity which is a reserved legal activity,
any rules or regulations relating to—
the education and training which persons must receive, or
any other requirements which must be met by or in respect of them,
(in order for them to be authorised by the body to provide immigration advice or immigration services, and
any other rules or regulations relating to the education and training which regulated persons must receive or any other requirements which must be met by or in respect of them,
(however they may be described).
(3) In this section “regulated persons”, in relation to a body, means any class of persons which consists of or includes—
(a) persons who are authorised by the body to carry on an activity which is a reserved legal activity;
(b) persons who are not so authorised, but are employees of a person who is so authorised.
(4) In relation to an authorised person other than an individual, references in subsection (2) and (3) to employees of the person include managers of the person.
22 Continuity of existing rights to carry on reserved legal activities
Schedule 5 makes provision for the continuity of existing rights and for certain persons to be deemed, during a transitional period, to be authorised by approved regulators to carry on certain activities.
23 Transitional protection for non-commercial bodies
(1) During the transitional period, a body within subsection (2) is entitled to carry on any activity which is a reserved legal activity.
(2) The bodies are—
(a) a not for profit body,
(b) a community interest company, or
(c) an independent trade union.
(3) The transitional period is the period which—
(a) begins with the day appointed for the coming into force of section 13, and
(b) ends with the day appointed by the Lord Chancellor by order for the purposes of this paragraph.
(4) Different days may be appointed under subsection (3)(b) for different purposes.
(5) An order may be made under subsection (3)(b) only on the recommendation of the Board.
(1) The Lord Chancellor may, by order, amend section 12 or Schedule 2 (reserved legal activities) so as to add any legal activity to the activities which are reserved legal activities for the purposes of this Act.
(2) An order under subsection (1) may be made only on the recommendation of the Board.
(3) Schedule 6 makes provision about the making of recommendations for the purposes of this section.
(4) Where a recommendation is made in relation to an activity, the Lord Chancellor must—
(a) consider the report containing the recommendation given to the Lord Chancellor under paragraph 16(3)(a) of that Schedule,
(b) decide whether or not to make an order under this section in respect of the activity, and
(c) publish a notice of that decision,
within the period of 90 days beginning with the day on which the report was given to the Lord Chancellor.
(5) Where the Lord Chancellor decides not to make an order under this section in respect of an activity, the notice under subsection (4)(c) must state the reasons for that decision.
25 Provisional designation as approved regulators and licensing authorities
(1) The Lord Chancellor may, by order, make provision—
(a) enabling applications to be made, considered and determined under Part 2 of Schedule 4 or Part 1 of Schedule 10 in relation to a provisional reserved activity, as if the activity were a reserved legal activity;
(b) enabling provisional designation orders to be made by the Lord Chancellor in respect of a provisional reserved activity, as if the activity were a reserved legal activity.
(2) An order under subsection (1) may, in particular, provide that Part 2 of Schedule 4 or Part 1 of Schedule 10 is to apply, in relation to such cases as may be specified by the order, with such modifications as may be so specified.
(3) The Lord Chancellor may also, by order, make provision—
(a) for the purpose of enabling applications for authorisation to carry on an activity which is a provisional reserved activity to be made to and considered and determined by—
(i) a body in respect of which a provisional designation order is made, or
(ii) the Board in its capacity as a licensing authority;
(b) for the purpose of enabling persons to be deemed to be authorised to carry on an activity which is a new reserved legal activity by a relevant approved regulator in relation to the activity, or by the Board in its capacity as a licensing authority, for a period specified in the order.
(4) For this purpose—
“provisional reserved activity” means an activity in respect of which a provisional report under paragraph 10 of Schedule 6 states that the Board is minded to make a recommendation for the purposes of section 24;
“provisional designation order” means an order made by the Lord Chancellor under Part 2 of Schedule 4 or Part 1 of Schedule 10 which is conditional upon the Lord Chancellor making an order under section 24 in respect of the provisional reserved activity, pursuant to a recommendation made by the Board following the provisional report;
“new reserved legal activity” means a legal activity which has become a reserved legal activity by virtue of an order under section 24.
26 Recommendations that activities should cease to be reserved legal activities
(1) The Board may recommend that an activity should cease to be a reserved legal activity.
(2) Schedule 6 makes provision about the making of recommendations for the purposes of this section.
(3) The Lord Chancellor must consider any recommendation made by the Board for the purposes of this section (but nothing in section 208 (minor and consequential provision etc) authorises the Lord Chancellor to give effect to such a recommendation).
(4) Where the Lord Chancellor disagrees with a recommendation (or any part of it), the Lord Chancellor must publish a notice to that effect which must include the Lord Chancellor's reasons for disagreeing.
27 Regulatory and representative functions of approved regulators
(1) In this Act references to the “regulatory functions” of an approved regulator are to any functions the approved regulator has—
(a) under or in relation to its regulatory arrangements, or
(b) in connection with the making or alteration of those arrangements.
(2) In this Act references to the “representative functions” of an approved regulator are to any functions the approved regulator has in connection with the representation, or promotion, of the interests of persons regulated by it.
28 Approved regulator's duty to promote the regulatory objectives etc
(1) In discharging its regulatory functions (whether in connection with a reserved legal activity or otherwise) an approved regulator must comply with the requirements of this section.
(2) The approved regulator must, so far as is reasonably practicable, act in a way—
(a) which is compatible with the regulatory objectives, and
(b) which the approved regulator considers most appropriate for the purpose of meeting those objectives.
(3) The approved regulator must have regard to—
(a) the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed, and
(b) any other principle appearing to it to represent the best regulatory practice.
29 Prohibition on the Board interfering with representative functions
(1) Nothing in this Act authorises the Board to exercise its functions in relation to any representative function of an approved regulator.
(2) But subsection (1) does not prevent the Board exercising its functions for the purpose of ensuring—
(a) that the exercise of an approved regulator's regulatory functions is not prejudiced by its representative functions, or
(b) that decisions relating to the exercise of an approved regulator's regulatory functions are, so far as reasonably practicable, taken independently from decisions relating to the exercise of its representative functions.
30 Rules relating to the exercise of regulatory functions
(1) The Board must make rules (“internal governance rules”) setting out requirements to be met by approved regulators for the purpose of ensuring—
(a) that the exercise of an approved regulator's regulatory functions is not prejudiced by its representative functions, and
(b) that decisions relating to the exercise of an approved regulator's regulatory functions are so far as reasonably practicable taken independently from decisions relating to the exercise of its representative functions.
(2) The internal governance rules must require each approved regulator to have in place arrangements which ensure—
(a) that the persons involved in the exercise of its regulatory functions are, in that capacity, able to make representations to, be consulted by and enter into communications with the Board, the Consumer Panel, the OLC and other approved regulators, and
(b) that the exercise by those persons of those powers is not prejudiced by the approved regulator's representative functions and is, so far as reasonably practicable, independent from the exercise of those functions.
(3) The internal governance rules must also require each approved regulator—
(a) to take such steps as are reasonably practicable to ensure that it provides such resources as are reasonably required for or in connection with the exercise of its regulatory functions;
(b) to make such provision as is necessary to enable persons involved in the exercise of its regulatory functions to be able to notify the Board where they consider that their independence or effectiveness is being prejudiced.
(4) The first set of rules under this section must be made before the day appointed by the Lord Chancellor by order for the purposes of this section.
(1) The Board may—
(a) set one or more performance targets relating to the performance by an approved regulator of any of its regulatory functions, or
(b) direct an approved regulator to set one or more performance targets relating to the performance by the approved regulator of any of its regulatory functions,
if the Board is satisfied that the conditions in subsection (2) are satisfied.
(2) Those conditions are—
(a) that an act or omission of the approved regulator (or a series of such acts or omissions) has had, or is likely to have, an adverse impact on one or more of the regulatory objectives, and
(b) that it is appropriate to take the action proposed under subsection (1) in all the circumstances of the case (including in particular the impact of taking the action on the other regulatory objectives).
(3) A direction under subsection (1)(b) may impose conditions with which the performance targets must conform.
(4) If the Board proposes to take action under this section in respect of an approved regulator it must give notice to the approved regulator—
(a) describing the action it proposes to take,
(b) specifying the acts or omissions to which the proposed action relates and any other facts which, in the opinion of the Board, justify the taking of that action, and
(c) specifying the time (not being earlier than the end of the period of 28 days beginning with the day on which the notice is given) before which representations with respect to that action may be made.
(5) Before taking action under this section, the Board must consider any representations which are duly made.
(6) In exercising its regulatory functions, an approved regulator must seek to meet any performance target set for or by it under this section.
(7) The Board must publish any target set or direction given by it under this section.
(8) An approved regulator must publish any target set by it pursuant to a direction under subsection (1)(b).
(9) The Board may take such steps as it regards as appropriate to monitor the extent to which any performance target set under this section is being, or has been, met.
(1) This section applies if the Board is satisfied—
(a) that an act or omission of an approved regulator (or a series of such acts or omissions) has had, or is likely to have, an adverse impact on one or more of the regulatory objectives,
(b) that an approved regulator has failed to comply with any requirement imposed on it by or under this Act (including this section) or any other enactment, or
(c) that an approved regulator—
(i) has failed to ensure that the exercise of its regulatory functions is not prejudiced by any of its representative functions, or
(ii) has failed to ensure that decisions relating to the exercise of its regulatory functions are, so far as reasonably practicable, taken independently from decisions relating to the exercise of its representative functions.
(2) If, in all the circumstances of the case, the Board is satisfied that it is appropriate to do so, it may direct the approved regulator to take—
(a) in a case within subsection (1)(a), such steps as the Board considers will counter the adverse impact, mitigate its effect or prevent its occurrence or recurrence;
(b) in a case within subsection (1)(b) or (c), such steps as the Board considers will remedy the failure, mitigate its effect or prevent its recurrence.
(3) In a case within subsection (1)(a), before giving a direction under subsection (2) the Board must in particular consider the impact of giving the direction on the other regulatory objectives.
(4) A direction under subsection (2)—
(a) may only require an approved regulator to take steps which it has power to take;
(b) may require an approved regulator to take steps with a view to the modification of any part of its regulatory arrangements.
(5) The Board may not exercise its powers under this section so as to give a direction requiring an approved regulator to take steps in respect of a specific disciplinary case or other specific regulatory proceedings (as opposed to all, or a specified class of, such cases or proceedings).
(6) For the purposes of this section a direction to take steps includes a direction which requires an approved regulator to refrain from taking a particular course of action.
(7) The power to give a direction under this section is subject to any provision made by or under any other enactment.
(8) The Board may take such steps as it regards as appropriate to monitor the extent to which a direction under this section is being, or has been, complied with.
(9) Where the Board revokes a direction under this section, it must—
(a) give the approved regulator to whom the direction was given notice of the revocation, and
(b) publish that notice.
(1) If at any time it appears to the Board that an approved regulator has failed to comply with a direction given under section 32, the Board may make an application to the High Court under this section.
(2) If, on an application under this section, the High Court decides that the approved regulator has failed to comply with the direction in question, it may order the approved regulator to take such steps as the High Court directs for securing that the direction is complied with.
(3) This section is without prejudice to any other powers conferred on the Board by this Part.
(1) This section applies if the Board is satisfied—
(a) that an act or omission of an approved regulator (or a series of such acts or omissions) has had, or is likely to have, an adverse impact on one or more of the regulatory objectives, and
(b) that it is appropriate to act under this section in all the circumstances of the case (including in particular the impact of so acting on the other regulatory objectives).
(2) The Board may publish a statement censuring the approved regulator for the act or omission (or series of acts or omissions).
(1) If the Board proposes to publish a statement under section 35 in respect of an approved regulator, it must give notice to the approved regulator—
(a) stating that the Board proposes to publish such a statement and setting out the terms of the proposed statement,
(b) specifying the acts or omissions to which the proposed statement relates, and
(c) specifying the time (not being earlier than the end of the period of 28 days beginning with the day on which the notice is given to the approved regulator) before which representations with respect to the proposed statement may be made.
(2) Before publishing the statement, the Board must consider any representations which are duly made.
(3) Before varying any proposed statement set out in a notice under subsection (1)(a), the Board must give notice to the approved regulator—
(a) setting out the proposed variation and the reasons for it, and
(b) specifying the time (not being earlier than the end of the period of 28 days beginning with the day on which the notice is given to the approved regulator) before which representations with respect to the proposed variation may be made.
(4) Before varying the proposal, the Board must consider any representations which are duly made.
(1) This section applies if the Board is satisfied—
(a) that an approved regulator has failed to comply with a requirement to which this section applies, and
(b) that, in all the circumstances of the case, it is appropriate to impose a financial penalty on the approved regulator.
(2) This section applies to any requirement imposed on the approved regulator—
(a) by rules under section 30 (internal governance rules),
(b) by a direction given under section 32 (Board directions), or
(c) by section 51 (control of practising fees charged by approved regulators) or by rules under that section.
(3) The Board may impose a penalty, in respect of the failure, of such an amount as it considers appropriate, but not exceeding the maximum amount prescribed under subsection (4).
(4) The Board must make rules prescribing the maximum amount of a penalty which may be imposed under this section.
(5) Rules may be made only under subsection (4) with the consent of the Lord Chancellor.
(6) A penalty under this section is payable to the Board.
(7) In sections 38 to 40 references to a “penalty” are to a penalty under this section.
(1) If the Board proposes to impose a penalty on an approved regulator, it must give notice to the approved regulator—
(a) stating that the Board proposes to impose a penalty and the amount of the penalty proposed to be imposed,
(b) specifying the failure to which the proposed penalty relates,
(c) specifying the other facts which, in the Board's opinion, justify the imposition of a penalty and the amount of the penalty, and
(d) specifying the time (not being earlier than the end of the period of 21 days beginning with the day on which the notice is published under subsection (8)) before which representations with respect to the proposed penalty may be made.
(2) Before imposing a penalty on an approved regulator, the Board must consider any representations which are duly made.
(3) Where the Board proposes to vary the amount of a proposed penalty stated in a notice under subsection (1)(a), the Board must give notice to the approved regulator—
(a) setting out the proposed variation and the reasons for it, and
(b) specifying the time (not being earlier than the end of the period of 21 days beginning with the day on which the notice is published under subsection (8)) before which representations with respect to the proposed variation may be made.
(4) Before varying the proposal, the Board must consider any representations which are duly made.
(5) As soon as practicable after imposing a penalty, the Board must give notice to the approved regulator—
(a) stating that it has imposed a penalty on the approved regulator and its amount,
(b) specifying the failure to which the penalty relates,
(c) specifying the other facts which, in the Board's opinion, justify the imposition of the penalty and its amount, and
(d) specifying a time (not being earlier than the end of the period of 3 months beginning with the day on which the notice is given to the approved regulator), before which the penalty is required to be paid.
(6) The approved regulator may, within the period of 21 days beginning with the day on which it is given the notice under subsection (5), make an application to the Board for it to specify different times by which different portions of the penalty are to be paid.
(7) If an application is made under subsection (6) in relation to a penalty, the penalty is not required to be paid until the application has been determined.
(8) The Board must publish any notice given under this section.
(1) An approved regulator on whom a penalty is imposed may appeal to the court on one or more of the appeal grounds.
(2) The appeal grounds are—
(a) that the imposition of the penalty was not within the power of the Board under section 37;
(b) that any of the requirements of section 38 have not been complied with in relation to the imposition of the penalty and the interests of the approved regulator have been substantially prejudiced by the non-compliance;
(c) that the amount of the penalty is unreasonable;
(d) that it was unreasonable of the Board 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) An appeal under subsection (1) must be made—
(a) within the period of 3 months beginning with the day on which the notice under section 38(5) is given to the approved regulator in respect of the penalty, or
(b) where the appeal relates to a decision of the Board on an application by the approved regulator under section 38(6), within the period of 3 months beginning with the day on which the approved regulator is notified of the decision.
(4) On any such appeal, where the court considers it appropriate to do so in all the circumstances of the case and is satisfied of one or more of the appeal grounds, the court may—
(a) quash the penalty,
(b) substitute a penalty of such lesser amount as the court considers appropriate, or
(c) in the case of the appeal ground in subsection (2)(d), substitute for any time imposed by the Board a different time or times.
(5) Where the court 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.
(6) Where the court 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.
(7) Except as provided by this section, the validity of a penalty is not to be questioned by any legal proceedings whatever.
(8) In this section “the court” means the High Court.