(1)The Law Society of England and Wales, the General Council of the Bar and the Chartered Institute of Legal Executives may make rules prohibiting regulated persons from—
(a)entering into a specified relevant claims management agreement that provides for the payment by a person of specified charges, and
(b)imposing specified charges on a person in connection with the provision of a service which is, or which is provided in connection with, a specified relevant claims management activity.
(2)The Law Society of England and Wales must exercise that power to make rules in relation to all relevant claims management agreements, and all relevant claims management activities, which concern claims in relation to financial products or services.
(3)The Law Society of Scotland may make rules prohibiting regulated persons from—
(a)entering into a relevant claims management agreement concerning a claim in relation to a financial product or service that provides for the payment by a person of specified charges, and
(b)imposing specified charges on a person in connection with the provision of a service which is, or which is provided in connection with, a relevant claims management activity concerning a claim in relation to a financial product or service.
(4)Rules under this section may make provision securing that for the purposes of the prohibition referred to in subsection (1)(a) or (3)(a) charges payable under a relevant claims management agreement are to be treated as including charges payable under an agreement treated by the rules as being connected with the relevant claims management agreement.
(5)In this section “regulated persons” means—
(a)in relation to the Law Society of England and Wales—
(i)persons who, or licensable bodies which, are authorised by the Law Society to carry on a reserved legal activity,
(ii)European lawyers registered with the Law Society under the European Communities (Lawyer’s Practice) Regulations 2000 (S.I. 2000/1119), and
(iii)foreign lawyers registered with the Law Society under section 89 of the Courts and Legal Services Act 1990;
(b)in relation to the Law Society of Scotland, Scottish legal practitioners;
(c)in relation to the General Council of the Bar—
(i)persons who, or licensable bodies which, are authorised by the General Council to carry on a reserved legal activity, and
(ii)European lawyers registered with the General Council under the European Communities (Lawyer’s Practice) Regulations 2000;
(d)in relation to the Chartered Institute of Legal Executives, persons authorised by the Institute to carry on a reserved legal activity.
(6)The rules must be made with a view to securing an appropriate degree of protection against excessive charges for the provision of a service which is, or which is provided in connection with, a relevant claims management activity.
(7)The rules may specify charges by reference to charges of a specified class or description, or by reference to charges which exceed, or are capable of exceeding, a specified amount.
(8)The rules may not specify—
(a)charges for a reserved legal activity within the meaning of the Legal Services Act 2007 (see section 12 of that Act);
(b)charges imposed in respect of—
(i)the exercise of a right of audience by a Scottish legal practitioner;
(ii)the conduct of litigation by a Scottish legal practitioner.
(9)In subsection (8)(b)—
“conduct of litigation” means—
the bringing of proceedings before any court in Scotland;
the commencement, prosecution and defence of such proceedings;
the performance of any ancillary functions in relation to such proceedings;
“right of audience” means the right to appear before and address a court in Scotland, including the right to call and examine witnesses.
(10)In relation to an agreement entered into, or charge imposed, in contravention of the rules, the rules may (amongst other things)—
(a)provide for the agreement, or obligation to pay the charge, to be unenforceable or unenforceable to a specified extent;
(b)provide for the recovery of amounts paid under the agreement or obligation;
(c)provide for the payment of compensation for any losses incurred as a result of paying amounts under the agreement or obligation.
(11)For the purposes of this section—
“relevant claims management activity” means activity of a kind specified in an order under section 22(1B) of the Financial Services and Markets Act 2000 (regulated activities: claims management services), disregarding any exemption in that order for activities carried on by, through, or at the direction of, a legal practitioner;
“relevant claims management agreement” means an agreement, the entering into or performance of which by either party is a relevant claims management activity;
“Scottish legal practitioner” means—
a person qualified to practise as a solicitor in accordance with section 4 of the Solicitors (Scotland) Act 1980;
European lawyers registered with the Law Society of Scotland under the European Communities (Lawyer’s Practice) (Scotland) Regulations 2000 (S.S.I. 2000/121);
foreign lawyers registered with the Law Society of Scotland under section 60A of the Solicitors (Scotland) Act 1980;
an incorporated practice within the meaning given by section 34(1A)(c) of the Solicitors (Scotland) Act 1980;
a licensed legal services provider within the meaning of Part 2 of the Legal Services (Scotland) Act 2010 (see section 47 of that Act) that provides, or offers to provide, legal services under a licence issued by the Law Society of Scotland;
“specified” means specified in the rules, but “specified amount” means an amount specified in or determined in accordance with the rules.
(12)This section does not limit any power of the Law Society of England and Wales, the Law Society of Scotland, the General Council of the Bar or the Chartered Institute of Legal Executives existing apart from this section to make rules.