Legal Services Act 2007
Encyclopedia
The Legal Services Act 2007 is an Act
of the Parliament of the United Kingdom
that seeks to liberalise and regulate the market
for legal services in England and Wales
, to encourage more competition
and to provide a new route for consumer complaint
s. It also makes provisions about the Legal Profession and Legal Aid (Scotland) Act 2007.
The professional principles are:
with a duty to promote the regulatory objectives. David Edmonds
was appointed the first chair of the Board on 23 April 2008 and nine members were appointed on 17 July. The members took up post on 1 September 2008 and the Board became fully operational on 1 January 2010. The Board is to have a Consumer Panel to represent consumers (ss. 8-11). no date has been fixed for the coming into force of the provisions about the Consumer Panel.
This list can be amended by an Order in Council of the Lord Chancellor
(ss. 24-26).
Section 12 then goes on to define, for the purposes of the Act, a legal activity as either a reserved legal activity or as the provision of legal advice, assistance or representation in connection with the application of the law or with any form of resolution of legal disputes. Legal activity does not include acting as a mediator
or arbitrator.
Only an authorised person or an exempt person can carry out a reserved legal activity (s. 14). It is a crime
to carry out a reserved activity otherwise though it is a defence that the person "did not know, and could not reasonably have been expected to know" that they were committing an offence. It is also an offence to pretend to be authorised (s. 17) An offender can be sentence
d on summary conviction
to up to six months' imprisonment
and a fine of up to £5,000. If convicted on indictment
in the Crown Court
and offender can be sentenced to up to two years' imprisonment and an unlimited fine. An unauthorised person who purports to exercise a right of audience also commits a contempt of court
for which he can be punished.
By virtue of paragraph 2(b) of the The Legal Services Act 2007 (Commencement No. 6, Transitory, Transitional and Saving Provisions) Order 2009 (SI 3250/2009) s 12 and Schedule 2 are in force from January 1, 2010.
Relevant approved regulators are (s. 20/ Sch. 4, Pt. 1):
The Legal Services Board also has the power to recommend to the Lord Chancellor that he approve further approved regulators (s. 20/ Sch. 4, Pt. 2). The regulatory arrangements of all the approved regulators defined in Sch. 4, Pt. 1 remain in place at the coming into force of the Act but thereafter, all changes to internal professional regulatory arrangements must be approved by the Board (s. 20/ Sch. 3, Pt. 3).
, no date is fixed for the coming into force of these provisions but, as a transitionary arrangement, authorised person is to be interpreted as a person who will be authorised when these sections to come into force.
The Board has a duty to regulate practising fees (s. 51), resolve regulatory conflicts (ss. 52-54), and work with the Office of Fair Trading
, the Competition Commission
and the Lord Chancellor on competition issues (ss. 57-61).
, no date is fixed for the coming into force of these provisions.
s in England and Wales could only practice as:
The Act allows alternative business structures (ABSs) with non-lawyers in professional, management or ownership roles. The Act creates a system whereby approved regulators can authorise licensed bodies to offer reserved legal services (ss.71-111).
, no date is fixed for the coming into force of these provisions and it has been suggested in the press that such structures are unlikely to be created until 2011 or 2012. Further, the extent to which the Bar Council will permit barristers to become involved in the full range of such structures is, as of March 2008, still unclear.
scheme (ss. 114-158 /Sch. 15). The offices of Legal Services Complaints Commissioner
(OLSCC) and Legal Services Ombudsman
(OLSO), which were introduced in the Courts and Legal Services Act 1990
are abolished under the Act (s. 159). The Office of the Legal Services Complaints Commissioner
(OLSCC) closed on 31 March 2010. The Office of the Legal Services Ombudsman
closed in 2011.
For the purposes of complaints only, claims management services are regarded as reserved legal activities and the Claims Management Services Regulator as an approved regulator (s. 161).
Section 114 came into force on 7 March 2008.
The Office for Legal Complaints (OLC) launched on Friday 24th July 2009. On 3rd February 2009, the Legal Services Board
announced the OLC Board members. On 29th September 2009 it was announced that the Ombudsman would be based in Birmingham, England. That December, it was confirmed that the name Legal Ombudsman had been chosen for the new scheme. On Wednesday 6th October 2010 the Legal Ombudsman began receiving complaints.
on a pro bono
basis, it would be contrary to the indemnity principle to award costs to that person. Section 194 allows the court
to order a payment to a charity
in lieu. These provisions come into force progressively from 30 June to 1 October 2008.
Act of Parliament
An Act of Parliament is a statute enacted as primary legislation by a national or sub-national parliament. In the Republic of Ireland the term Act of the Oireachtas is used, and in the United States the term Act of Congress is used.In Commonwealth countries, the term is used both in a narrow...
of the Parliament of the United Kingdom
Parliament of the United Kingdom
The Parliament of the United Kingdom of Great Britain and Northern Ireland is the supreme legislative body in the United Kingdom, British Crown dependencies and British overseas territories, located in London...
that seeks to liberalise and regulate the market
Market
A market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services in exchange for money from buyers...
for legal services in England and Wales
England and Wales
England and Wales is a jurisdiction within the United Kingdom. It consists of England and Wales, two of the four countries of the United Kingdom...
, to encourage more competition
Competition
Competition is a contest between individuals, groups, animals, etc. for territory, a niche, or a location of resources. It arises whenever two and only two strive for a goal which cannot be shared. Competition occurs naturally between living organisms which co-exist in the same environment. For...
and to provide a new route for consumer complaint
Consumer complaint
Consumer is a broad label for any individuals or households that use goods and services generated within the economy. The concept of a consumer is used in different contexts, so that the usage and significance of the term may vary....
s. It also makes provisions about the Legal Profession and Legal Aid (Scotland) Act 2007.
Regulatory objectives
Section 1 of the Act defines eight regulatory objectives:- Protecting and promoting the public interestPublic interestThe public interest refers to the "common well-being" or "general welfare." The public interest is central to policy debates, politics, democracy and the nature of government itself...
; - Supporting the constitutional principle of the rule of lawRule of lawThe rule of law, sometimes called supremacy of law, is a legal maxim that says that governmental decisions should be made by applying known principles or laws with minimal discretion in their application...
; - Improving access to justiceJusticeJustice is a concept of moral rightness based on ethics, rationality, law, natural law, religion, or equity, along with the punishment of the breach of said ethics; justice is the act of being just and/or fair.-Concept of justice:...
; - Protecting and promoting the interests of consumerConsumerConsumer is a broad label for any individuals or households that use goods generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the term may vary.-Economics and marketing:...
s of legal services; - Promoting competitionCompetitionCompetition is a contest between individuals, groups, animals, etc. for territory, a niche, or a location of resources. It arises whenever two and only two strive for a goal which cannot be shared. Competition occurs naturally between living organisms which co-exist in the same environment. For...
in the provision of legal services; - Encouraging an independent, strong, diverse and effective legal profession;
- Increasing public understanding of the citizen’s legal rights and duties;
- Promoting and maintaining adherence to the professional principles;
The professional principles are:
- Authorised persons should act with independence and integrity;
- Authorised persons should maintain proper standards of work;
- Authorised persons should act in the best interests of their clients;
- Persons who exercise before any courtCourtA court is a form of tribunal, often a governmental institution, with the authority to adjudicate legal disputes between parties and carry out the administration of justice in civil, criminal, and administrative matters in accordance with the rule of law...
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 - Affairs of clients should be kept confidentialDuty of confidentialityIn common law jurisdictions, the duty of confidentiality obliges a solicitor to respect the confidentiality of his client's affairs. Information that a solicitor obtains about his clients' affairs may be confidential, and must not be used for the benefit of persons not authorised by the client...
.
The Legal Services Board
Sections 2 to 7 and Schedule 1 create the Legal Services BoardLegal Services Board
The Legal Services Board is the new, independent body responsible for overseeing the regulation of lawyers in England and Wales. It is a non-departmental public body sponsored by the Ministry of Justice...
with a duty to promote the regulatory objectives. David Edmonds
David Edmonds
David Albert Edmonds CBE is a British businessperson, civil servant and administrator, chair of the Legal Services Board....
was appointed the first chair of the Board on 23 April 2008 and nine members were appointed on 17 July. The members took up post on 1 September 2008 and the Board became fully operational on 1 January 2010. The Board is to have a Consumer Panel to represent consumers (ss. 8-11). no date has been fixed for the coming into force of the provisions about the Consumer Panel.
Reserved legal activities
Section 12 and Schedule 2 define six reserved legal activities:- Exercise of rights of audience;
- Conduct of litigation;
- Reserved instrument activities, being certain activities concerning land registrationLand registrationLand registration generally describes systems by which matters concerning ownership, possession or other rights in land can be recorded to provide evidence of title, facilitate transactions and to prevent unlawful disposal...
and real propertyReal propertyIn English Common Law, real property, real estate, realty, or immovable property is any subset of land that has been legally defined and the improvements to it made by human efforts: any buildings, machinery, wells, dams, ponds, mines, canals, roads, various property rights, and so forth...
; - ProbateProbateProbate is the legal process of administering the estate of a deceased person by resolving all claims and distributing the deceased person's property under the valid will. A probate court decides the validity of a testator's will...
activities; - Notarial activities;
- Administration of oathOathAn oath is either a statement of fact or a promise calling upon something or someone that the oath maker considers sacred, usually God, as a witness to the binding nature of the promise or the truth of the statement of fact. To swear is to take an oath, to make a solemn vow...
s.
This list can be amended by an Order in Council of the Lord Chancellor
Lord Chancellor
The Lord High Chancellor of Great Britain, or Lord Chancellor, is a senior and important functionary in the government of the United Kingdom. He is the second highest ranking of the Great Officers of State, ranking only after the Lord High Steward. The Lord Chancellor is appointed by the Sovereign...
(ss. 24-26).
Section 12 then goes on to define, for the purposes of the Act, a legal activity as either a reserved legal activity or as the provision of legal advice, assistance or representation in connection with the application of the law or with any form of resolution of legal disputes. Legal activity does not include acting as a mediator
Mediation
Mediation, as used in law, is a form of alternative dispute resolution , a way of resolving disputes between two or more parties. A third party, the mediator, assists the parties to negotiate their own settlement...
or arbitrator.
Only an authorised person or an exempt person can carry out a reserved legal activity (s. 14). It is a crime
Crime
Crime is the breach of rules or laws for which some governing authority can ultimately prescribe a conviction...
to carry out a reserved activity otherwise though it is a defence that the person "did not know, and could not reasonably have been expected to know" that they were committing an offence. It is also an offence to pretend to be authorised (s. 17) An offender can be sentence
Sentence (law)
In law, a sentence forms the final explicit act of a judge-ruled process, and also the symbolic principal act connected to his function. The sentence can generally involve a decree of imprisonment, a fine and/or other punishments against a defendant convicted of a crime...
d on summary conviction
Summary offence
A summary offence is a criminal act in some common law jurisdictions that can be proceeded with summarily, without the right to a jury trial and/or indictment .- United States :...
to up to six months' imprisonment
Imprisonment
Imprisonment is a legal term.The book Termes de la Ley contains the following definition:This passage was approved by Atkin and Duke LJJ in Meering v Grahame White Aviation Co....
and a fine of up to £5,000. If convicted on indictment
Indictable offence
In many common law jurisdictions , an indictable offence is an offence which can only be tried on an indictment after a preliminary hearing to determine whether there is a prima facie case to answer or by a grand jury...
in the Crown Court
Crown Court
The Crown Court of England and Wales is, together with the High Court of Justice and the Court of Appeal, one of the constituent parts of the Senior Courts of England and Wales...
and offender can be sentenced to up to two years' imprisonment and an unlimited fine. An unauthorised person who purports to exercise a right of audience also commits a contempt of court
Contempt of court
Contempt of court is a court order which, in the context of a court trial or hearing, declares a person or organization to have disobeyed or been disrespectful of the court's authority...
for which he can be punished.
By virtue of paragraph 2(b) of the The Legal Services Act 2007 (Commencement No. 6, Transitory, Transitional and Saving Provisions) Order 2009 (SI 3250/2009) s 12 and Schedule 2 are in force from January 1, 2010.
Authorised persons and approved regulators
Authorised persons are either (s. 18):- Persons authorised in respect of a given legal activity by a relevant approved regulator; or
- Licensed bodies authorised in respect of those activities.
Relevant approved regulators are (s. 20/ Sch. 4, Pt. 1):
| Regulator | Rights of audience | Conduct of litigation | Reserved instruments | Probate activities | Notorial activities | Administration of oaths |
|---|---|---|---|---|---|---|
| Law Society Law Society of England and Wales The Law Society is the professional association that represents the solicitors' profession in England and Wales. It provides services and support to practising and training solicitors as well as serving as a sounding board for law reform. Members of the Society are often consulted when important... |
yes | yes | yes | yes | no | yes |
| Bar Council Bar council A bar council , in a Commonwealth country and in the Republic of Ireland, the Bar Council of Ireland is a professional body that regulates the profession of barristers together with the King's Inns. Solicitors are generally regulated by the Law society.... |
yes | yes | yes | yes | no | yes |
| Master of the Faculties Master of the Faculties The Master of the Faculties is a functionary in the office of the Archbishop of Canterbury and has some important powers in English law, in particular the appointment and regulation of public notaries. The position is always held by the Dean of Arches.... |
no | no | yes | yes | yes | yes |
| Institute of Legal Executives Institute of Legal Executives The Institute of Legal Executives is the professional body for legal executives in England and Wales and an examination board providing qualifications for legal executives, paralegals and legal secretaries.-History:... |
yes | no | no | no | no | yes |
| Council for Licensed Conveyancers | no | no | yes | no | no | yes |
| Chartered Institute of Patent Attorneys Chartered Institute of Patent Attorneys The Chartered Institute of Patent Attorneys is the British professional body of patent attorneys. It was founded in 1882 as the Chartered Institute of Patent Agents and incorporated by Royal Charter in 1891... |
yes | yes | yes | no | no | yes |
| Institute of Trade Mark Attorneys | yes | yes | yes | no | no | yes |
| Association of Law Costs Draftsmen | yes | yes | no | no | no | yes |
The Legal Services Board also has the power to recommend to the Lord Chancellor that he approve further approved regulators (s. 20/ Sch. 4, Pt. 2). The regulatory arrangements of all the approved regulators defined in Sch. 4, Pt. 1 remain in place at the coming into force of the Act but thereafter, all changes to internal professional regulatory arrangements must be approved by the Board (s. 20/ Sch. 3, Pt. 3).
, no date is fixed for the coming into force of these provisions but, as a transitionary arrangement, authorised person is to be interpreted as a person who will be authorised when these sections to come into force.
Regulation of approved regulators
Approved regulators have a duty to promote the regulatory objectives (s. 28). If they fail to do so, or if they fail in some other way to comply with the Act, the Legal Services Board can:- Issue directions to the regulator to correct the deficiency (ss. 32-34/ Sch. 7);
- Publish a public censure (ss. 35-36);
- Impose a financial penalty (ss. 37-40);
- Make an intervention direction whereby the regulatory function is performed by a person nominated by the Board (ss. 41-44);
- Recommend that the Lord Chancellor cancel the regulator's approval (ss. 45-48).
The Board has a duty to regulate practising fees (s. 51), resolve regulatory conflicts (ss. 52-54), and work with the Office of Fair Trading
Office of Fair Trading
The Office of Fair Trading is a not-for-profit and non-ministerial government department of the United Kingdom, established by the Fair Trading Act 1973, which enforces both consumer protection and competition law, acting as the UK's economic regulator...
, the Competition Commission
Competition Commission
The Competition Commission is a non-departmental public body responsible for investigating mergers, markets and other enquiries related to regulated industries under competition law in the United Kingdom...
and the Lord Chancellor on competition issues (ss. 57-61).
, no date is fixed for the coming into force of these provisions.
Alternative business structures and licensed bodies
Before the coming into force of the Act, lawyerLawyer
A lawyer, according to Black's Law Dictionary, is "a person learned in the law; as an attorney, counsel or solicitor; a person who is practicing law." Law is the system of rules of conduct established by the sovereign government of a society to correct wrongs, maintain the stability of political...
s in England and Wales could only practice as:
- SolicitorSolicitorSolicitors are lawyers who traditionally deal with any legal matter including conducting proceedings in courts. In the United Kingdom, a few Australian states and the Republic of Ireland, the legal profession is split between solicitors and barristers , and a lawyer will usually only hold one title...
s, as sole traders or in partnershipPartnershipA partnership is an arrangement where parties agree to cooperate to advance their mutual interests.Since humans are social beings, partnerships between individuals, businesses, interest-based organizations, schools, governments, and varied combinations thereof, have always been and remain commonplace...
s with other solicitors; - BarristerBarristerA barrister is a member of one of the two classes of lawyer found in many common law jurisdictions with split legal professions. Barristers specialise in courtroom advocacy, drafting legal pleadings and giving expert legal opinions...
s, as sole traders; or - Employees providing legal services to their employer.
The Act allows alternative business structures (ABSs) with non-lawyers in professional, management or ownership roles. The Act creates a system whereby approved regulators can authorise licensed bodies to offer reserved legal services (ss.71-111).
, no date is fixed for the coming into force of these provisions and it has been suggested in the press that such structures are unlikely to be created until 2011 or 2012. Further, the extent to which the Bar Council will permit barristers to become involved in the full range of such structures is, as of March 2008, still unclear.
Complaints
Approved regulators must operate a complaints system as part of their internal regulatory arrangements (s. 112). Section 114 of the Act creates an Office for Legal Complaints which the Section 115 of the Legal Services Act stipulates must administer an ombudsmanOmbudsman
An ombudsman is a person who acts as a trusted intermediary between an organization and some internal or external constituency while representing not only but mostly the broad scope of constituent interests...
scheme (ss. 114-158 /Sch. 15). The offices of Legal Services Complaints Commissioner
Legal Services Complaints Commissioner
In England and Wales, the Legal Services Complaints Commissioner is a statutory office that regulates solicitors, but not barristers. A Commissioner can be appointed by, and is answerable to, the Lord Chancellor and Secretary of State for Justice....
(OLSCC) and Legal Services Ombudsman
Legal Services Ombudsman
In England and Wales, the Legal Services Ombudsman was a statutory officer that investigated allegations about the improper, ineffective or inefficient way that complaints about lawyers are handled by their respective self-regulating professional bodies. The Ombudsman is appointed by, and is...
(OLSO), which were introduced in the Courts and Legal Services Act 1990
Courts and Legal Services Act 1990
The Courts and Legal Services Act 1990 was an Act of the Parliament of the United Kingdom that reformed the legal profession and Courts of England and Wales...
are abolished under the Act (s. 159). The Office of the Legal Services Complaints Commissioner
Legal Services Complaints Commissioner
In England and Wales, the Legal Services Complaints Commissioner is a statutory office that regulates solicitors, but not barristers. A Commissioner can be appointed by, and is answerable to, the Lord Chancellor and Secretary of State for Justice....
(OLSCC) closed on 31 March 2010. The Office of the Legal Services Ombudsman
Legal Services Ombudsman
In England and Wales, the Legal Services Ombudsman was a statutory officer that investigated allegations about the improper, ineffective or inefficient way that complaints about lawyers are handled by their respective self-regulating professional bodies. The Ombudsman is appointed by, and is...
closed in 2011.
For the purposes of complaints only, claims management services are regarded as reserved legal activities and the Claims Management Services Regulator as an approved regulator (s. 161).
Section 114 came into force on 7 March 2008.
The Office for Legal Complaints (OLC) launched on Friday 24th July 2009. On 3rd February 2009, the Legal Services Board
Legal Services Board
The Legal Services Board is the new, independent body responsible for overseeing the regulation of lawyers in England and Wales. It is a non-departmental public body sponsored by the Ministry of Justice...
announced the OLC Board members. On 29th September 2009 it was announced that the Ombudsman would be based in Birmingham, England. That December, it was confirmed that the name Legal Ombudsman had been chosen for the new scheme. On Wednesday 6th October 2010 the Legal Ombudsman began receiving complaints.
Legal professional privilege
The Act extends legal professional privilege to authorised persons other than barristers and solicitors (s. 190). , no date is fixed for the coming into force of these provisions.Costs in pro bono proceedings
Where a litigant is represented in civil proceedingsCivil law (common law)
Civil law, as opposed to criminal law, is the branch of law dealing with disputes between individuals or organizations, in which compensation may be awarded to the victim...
on a pro bono
Pro bono
Pro bono publico is a Latin phrase generally used to describe professional work undertaken voluntarily and without payment or at a reduced fee as a public service. It is common in the legal profession and is increasingly seen in marketing, technology, and strategy consulting firms...
basis, it would be contrary to the indemnity principle to award costs to that person. Section 194 allows the court
Court
A court is a form of tribunal, often a governmental institution, with the authority to adjudicate legal disputes between parties and carry out the administration of justice in civil, criminal, and administrative matters in accordance with the rule of law...
to order a payment to a charity
Charitable organization
A charitable organization is a type of non-profit organization . It differs from other types of NPOs in that it centers on philanthropic goals A charitable organization is a type of non-profit organization (NPO). It differs from other types of NPOs in that it centers on philanthropic goals A...
in lieu. These provisions come into force progressively from 30 June to 1 October 2008.