Regulation of Legal Services (Scotland) Act 2025

Prospective

Chapter 2 S regulators

Regulatory categories S

7 Regulatory categories S

(1) For the purposes of this Act, a regulator of legal services providers is subject to different requirements according to whether it is—

(a) assigned as—

(i) a category 1 regulator,

(ii) a category 2 regulator, or

(b) in relation to licensed legal services providers, an approved regulator of such providers (for which, see Part 2 of the 2010 Act).

(2) The Law Society of Scotland is assigned as a category 1 regulator.

(3) The Faculty of Advocates (acting on behalf of the Court of Session) and the Association of Construction Attorneys are assigned as category 2 regulators.

(4) A body that has been approved under section 28 as an accredited regulator is, until such time as the Scottish Ministers make regulations under subsection (6) of that section, deemed to be assigned as a category 2 regulator.

(5) The Scottish Ministers may by regulations amend this section to—

(a) reassign a body that is for the time being mentioned in this section to a different regulatory category, but only if the body is—

(i) an accredited regulator, or

(ii) a body which has had an application under section 25 of the 1990 Act granted under section 26 of that Act,

(b) add a body which is approved under section 28 as an accredited regulator and assign its regulatory category,

(c) remove a body that has ceased to be a regulator,

(d) update the name or description of a regulator.

(6) When considering whether a regulator should be assigned (or reassigned) as a category 1 or a category 2 regulator, the Scottish Ministers must have regard to—

(a) the type and range of legal services that are (or are to be) regulated,

(b) whether the legal services are (or are to be) provided directly to members of the public, and

(c) the number of legal services providers that the regulator regulates (or is likely to regulate).

(7) Regulations under subsection (5) are subject to the affirmative procedure.

(8) But the Scottish Ministers may exercise the power to make regulations under subsection (5)(a) only following, and in accordance with, a request to exercise the power received from the Lord President.

(9) Before making a request referred to in subsection (8), the Lord President—

(a) must consult—

(i) the body whose category the Lord President is proposing to be reassigned,

(ii) the independent advisory panel of the Commission,

(iii) the other category 1 and category 2 regulators, and

(iv) each approved regulator of licensed providers (if not otherwise consulted), and

(b) may consult—

(i) the Scottish Ministers, and

(ii) such other person or body as the Lord President considers appropriate.

(10) A request under subsection (8) must include—

(a) a document setting out the reasons for the request, and

(b) copies of any written representations received in response to the consultation under subsection (9).

(11) As soon as reasonably practicable after making a request under subsection (8), the Lord President must publish the documents included with the request in such manner as the Lord President considers appropriate (having regard to the desirability of the documents being accessible to those likely to have an interest in them).

(12) For the purposes of subsection (1), “regulator” means—

(a) the Law Society,

(b) the Faculty of Advocates,

(c) an approved regulator of licensed providers,

(d) an accredited regulator, or

(e) a body which has had an application under section 25 of the 1990 Act granted under section 26 of that Act.

Commencement Information

I1 S. 7 not in force at Royal Assent, see s. 103(3)

Requirements of category 1 regulators S

8 Exercise of regulatory functions S

(1) A category 1 regulator must exercise its regulatory functions—

(a) independently of its other functions or activities (if any),

(b) properly in all respects (in particular, with a view to achieving public confidence).

(2) Where a category 1 regulator has functions other than regulatory functions, it must—

(a) establish and maintain a regulatory committee to discharge its regulatory functions,

(b) ensure that the governing body of the regulator does not interfere with the committee’s discharge of those functions,

(c) when consulted on a matter relating to its regulatory functions, delegate responsibility for responding to the committee (in so far as the matter relates to those functions).

(3) A category 1 regulator must—

(a) consult its regulatory committee before making decisions affecting the committee’s funding and resources, and

(b) ensure that the committee is adequately funded and resourced to be able to discharge its functions.

(4) A regulatory committee—

(a) must (in accordance with this Act or any other enactment) determine its composition, governance arrangements and priorities,

(b) may arrange for the exercise of its functions by a sub-committee or an individual (which may be a member of staff of the regulator).

(5) But, an arrangement under subsection (4)(b)—

(a) may not delegate—

(i) the regulatory committee’s function of making regulatory rules under this Act or any other enactment,

(ii) to an individual, the committee’s function of determining what action it proposes to take in respect of a conduct or regulatory complaint remitted under section 6 or 7A of the 2007 Act or, as the case may be, initiated in accordance with section 33A or 33B of that Act, and

(b) does not affect or limit the regulatory committee’s—

(i) responsibility for the exercise of the delegated functions, or

(ii) ability to exercise those functions.

(6) A regulatory committee must maintain and publish a document setting out its—

(a) composition, membership and governance arrangements,

(b) regulatory functions (including powers and duties) and procedures,

(c) arrangements (if any) for the delegation of functions.

(7) A regulatory committee of a category 1 regulator must consult the governing body of the regulator before making any material change to its governance arrangements.

(8) Except where provided for in an enactment, the governing body and regulatory committee of a category 1 regulator are to agree arrangements for resolving any disputes that may arise between them.

(9) In this Part, a reference to the governing body of a category 1 regulator is a reference to the group of persons (however described) who are responsible for the direction, management and control of the regulator and the exercise of its statutory functions.

Commencement Information

I2 S. 8 not in force at Royal Assent, see s. 103(3)

9 Regulatory committee: composition and membership S

(1) It is for the regulatory committee of a category 1 regulator to appoint its members.

(2) But a category 1 regulator may appoint members to its regulatory committee if, at the time of appointment, the regulatory committee is unable to do so (for example, if it is appointing the members of the first regulatory committee).

(3) A member of a regulatory committee—

(a) may be a person regulated by the regulator as a legal services provider, but

(b) must not be, or have been for at least two years, involved in the governing body of the regulator or the exercise of the regulator’s non-regulatory functions.

(4) A person may not be a member of the regulatory committee if the person—

(a) has had a right to practise (in law or otherwise) removed as a result of a finding of misconduct by a professional or disciplinary body,

(b) is suspended from practising (in law or otherwise) by a professional or disciplinary body,

(c) is subject to a disqualification order or disqualification undertaking under the Company Directors Disqualification Act 1986 or the Company Directors Disqualification (Northern Ireland) Order 2002 (S.I. 2002/3150 (N.I. 4)), or

(d) has been convicted of an offence involving dishonesty.

(5) The regulatory committee may determine that a person may not be a member of the regulatory committee if the person has been convicted of an offence other than one referred to in subsection (4)(d).

(6) At least 50% of the members of a regulatory committee (and any sub-committee of it) of a category 1 regulator are to be lay members (see section 10).

(7) The regulatory committee may co-opt persons who are not members of the regulatory committee (subject to subsections (3)(b) and (4)).

(8) The validity of any proceedings of a regulatory committee (or any subcommittee of it) is not affected by a vacancy in membership.

(9) For the purpose of subsection (4), a professional or disciplinary body is a body which, in the opinion of the category 1 regulator, regulates the provision of professional services (such as law or accountancy) by means of requiring persons who wish to provide those services to meet certain standards and criteria and adhere to rules governing acceptable practice and conduct.

(10) A category 1 regulator must publish guidance in respect of how it applies subsection (4) in such a manner as to bring it to the attention of persons who are likely to be interested in the membership of its regulatory committee.

Commencement Information

I3 S. 9 not in force at Royal Assent, see s. 103(3)

10 Regulatory committee: lay and legal members S

(1) To be appointable as a lay member of a regulatory committee, a person must meet the criteria in subsections (2) and (3).

(2) The person must appear to the regulatory committee (or, in a case where the committee is unable to do so, the category 1 regulator) to be—

(a) qualified to represent the interests of the public in relation to the provision of legal services in Scotland, or

(b) having regard to the regulator’s regulatory functions, suitable in other respects.

(3) The person must not be, and must not have been for at least 10 years, eligible for appointment as a legal member.

(4) A person may be appointed as a legal member of a regulatory committee only if the person is (any of)—

(a) a solicitor or a person training to become a solicitor in accordance with regulations made under section 5 of the 1980 Act,

(b) an advocate or a person who has matriculated as an intrant with a view to becoming an advocate,

(c) a conveyancing or executry practitioner as defined in section 23 of the 1990 Act,

(d) a person who has acquired a right to provide legal services by virtue of Chapter 3 (or under section 27 of the 1990 Act),

(e) regulated or represented by—

(i) a regulatory body authorised by the Legal Services Board established under section 2 of the Legal Services Act 2007 with the exception of those authorised to regulate chartered accountants,

(ii) the Law Society of Northern Ireland,

(iii) the Bar of Northern Ireland.

Commencement Information

I4 S. 10 not in force at Royal Assent, see s. 103(3)

11 Regulatory committee: convener, sub-committees and minutes S

(1) The regulatory committee of a category 1 regulator is to appoint one of its lay members as its convener.

(2) If the convener is not present at a meeting of the committee, another of its lay members is to chair the meeting.

(3) A sub-committee of the regulatory committee may—

(a) be chaired by a person other than a lay member,

(b) co-opt persons who are not members of the regulatory committee (subject to section 9(3)(b) and (4)),

(c) with the approval of the regulatory committee, arrange for the exercise of any function, other than the function described in section 8(5)(a)(ii), by an individual (which may be a member of staff of the regulator).

(4) On the request of any person for a copy of the minutes of a meeting of the regulatory committee of a category 1 regulator, the committee must, if the request is reasonable, give the person a copy of those minutes within the period of 28 days beginning with the day of the request.

(5) Where a request for a copy of minutes is made under subsection (4), the regulatory committee—

(a) may withhold information contained in the minutes, and

(b) if it does so, must inform the person requesting a copy of the minutes of its reasons for doing so.

Commencement Information

I5 S. 11 not in force at Royal Assent, see s. 103(3)

12 Annual reports of category 1 regulators S

(1) A category 1 regulator or, where section 8(2) applies, its regulatory committee, must prepare a report on the exercise of its regulatory functions as soon as practicable after the end of each reporting year.

(2) The report must include—

(a) information demonstrating how the category 1 regulator or, where section 8(2) applies, its regulatory committee, is complying with the regulatory objectives,

(b) information as to how the regulator or, where section 8(2) applies, its regulatory committee, is carrying out its regulatory functions,

(c) a statement on the strategic priorities of the regulator or, where section 8(2) applies, its regulatory committee, for the next reporting year in relation to its regulatory functions,

(d) a copy of the regulator’s or, where section 8(2) applies, its regulatory committee, annual accounts (in so far as they are relevant to the carrying out of regulatory functions),

(e) a summary of decisions to pay out from the compensation fund, including details on—

(i) how decisions on claims are made,

(ii) the criteria for making decisions,

(iii) the average length of time it has taken to make a payment following the making of a claim,

(iv) the proportion of claims that have been paid out, whether in part or in full, compared to the number of claims made,

(f) information, in relation to legal services providers that the regulator regulates, about—

(i) the number of conduct complaints remitted (or treated as having been remitted) to it under the 2007 Act, and the number of those complaints that are determined, discontinued or reinstated by it or, where section 8(2) applies, its regulatory committee,

(ii) the number of regulatory complaints remitted (or treated as having been remitted) to it under the 2007 Act, and the number of those complaints that are determined, discontinued or reinstated by it or, where section 8(2) applies, its regulatory committee,

(g) information on any measures taken or financial penalties imposed by the regulator on legal services providers that it regulates as a result of complaints remitted (or treated as having been remitted) to it under the 2007 Act (including information as to compliance with the measures and the actions taken to enforce them),

(h) information about directions (if any) given under section 20, including—

(i) the number of directions given in pursuance of each of the purposes in section 20(3),

(ii) a summary of which types of rules are being disapplied or modified (and how frequently they are being disapplied or modified),

(iii) any trends in the kinds of directions that were applied for, rejected or granted,

(iv) the changes in such trends (if any) from the previous report,

(i) where the Commission has given a direction in relation to the handling of complaints, details of how the regulator or, where section 8(2) applies, its regulatory committee, has complied with it,

(j) where the Commission has given a direction in relation to the compensation fund, details of how the regulator or, where section 8(2) applies, its regulatory committee, has complied with it,

(k) details of steps taken by the regulator or, where section 8(2) applies, its regulatory committee, to ensure compliance with any measures taken under section 19 by the Lord President,

(l) except in the case where the regulator is the Law Society, a statement indicating whether the regulator or, where section 8(2) applies, its regulatory committee, considers the category which it has been assigned is appropriate for the purposes of section 7 (having regard to section 7(6)).

(3) Where section 8(2) applies—

(a) the category 1 regulator must make available to its regulatory committee such information as the committee may require to prepare an annual report under this section,

(b) the report must include such information as the committee considers relevant about—

(i) the committee’s internal governance arrangements, and

(ii) the relationship between the committee and the regulator’s governing body, and

(c) the regulatory committee must involve the governing body of the regulator in the preparation of the report.

(4) When preparing an annual report, a category 1 regulator, or where section 8(2) applies, its regulatory committee must consult the independent advisory panel of the Commission.

(5) A category 1 regulator, or where section 8(2) applies, its regulatory committee, must—

(a) publish its annual report by such electronic means as the regulator (or regulatory committee) considers appropriate, and

(b) send a copy of its annual report to the Lord President,

as soon as practicable after the end of the reporting year to which the annual report relates.

(6) In this section—

• “conduct complaint” is to be construed in accordance with Part 1 of the 2007 Act,

• “regulatory complaint” is to be construed in accordance with Part 1 of the 2007 Act,

• “reporting year” means, in relation to a category 1 regulator, a 12 month period that coincides with the regulator’s financial year.

Commencement Information

I6 S. 12 not in force at Royal Assent, see s. 103(3)

13 Compensation funds S

(1) A category 1 regulator must establish and maintain a fund for the purpose of making grants to compensate persons who suffer financial loss by reason of dishonesty by a legal services provider regulated by the regulator (or a provider it regulated at the time the dishonesty occurred).

(2) Where section 8(2) applies, the fund must be under the management and control of the regulatory committee.

(3) It is for the category 1 regulator or, where section 8(2) applies, its regulatory committee, to determine whether to make payments from the fund.

(4) A category 1 regulator or, where section 8(2) applies, its regulatory committee must have rules in relation to the fund which—

(a) state the minimum monetary amount to be contained in the fund,

(b) describe the way in which the fund is administered,

(c) specify the criteria for a grant being made from the fund, which may include—

(i) limiting the claims that may be made by a person in respect of an act of dishonesty by a legal services provider,

(ii) making payments from the fund to other persons (such as judicial factors) in connection with mitigating risks to the clients of a provider arising through the actions of the provider,

(d) provide the procedures for making and determining a claim,

(e) require the making of contributions to that fund by the legal services providers it regulates,

(f) make provision for the destination or distribution of the fund in the event that the regulator ceases to operate.

(5) The rules for the fund may also include such further provision as the category 1 regulator or, where section 8(2) applies, its regulatory committee considers necessary or expedient for the operation of the fund.

(6) Before making or amending rules in pursuance of subsection (4), the category 1 regulator, or where section 8(2) applies, its regulatory committee must consult the independent advisory panel of the Commission.

(7) Where section 8(2) applies, when making or amending rules in pursuance of subsection (4), the regulatory committee of a category 1 regulator must have regard to the views of the governing body of the regulator.

(8) The Scottish Ministers may by regulations make further provision in connection with funds established under this section and the rules a category 1 regulator or, where section 8(2) applies, its regulatory committee, must have for such funds.

(9) The Scottish Ministers may exercise the power to make regulations under subsection (8) only if they have received a request to exercise the power from—

(a) the Lord President,

(b) the regulatory committee of a category 1 regulator,

(c) a category 1 regulator that has no functions other than regulatory functions, or

(d) the independent advisory panel of the Commission.

(10) Before making a request under subsection (9), the person making the request (“the requester”) must—

(a) consult—

(i) the regulatory committee (if any) of each category 1 regulator,

(ii) each category 1 regulator that has no functions other than regulatory functions,

(iii) the independent advisory panel of the Commission, and

(iv) such other person or body as the requester considers appropriate, and

(b) except where the requester is the Lord President, secure the Lord President’s agreement to the making of the request.

(11) But a body mentioned in subsection (10)(a)(i) to (iii) does not need to be consulted if the body is the requester.

(12) For the purpose of seeking the Lord President’s agreement under subsection (10)(b), the requester must provide to the Lord President—

(a) a document setting out—

(i) an explanation of the change sought by the proposed exercise of the power, and

(ii) the reasons for seeking the change, and

(b) copies of any written representations received in response to the consultation under subsection (10)(a).

(13) A request under subsection (9) must include—

(a) a document setting out—

(i) an explanation of the change sought by the proposed exercise of the power, and

(ii) the reasons for seeking the change,

(b) copies of any written representations received in response to the consultation under subsection (10)(a), and

(c) except where the requester is the Lord President, written confirmation of the Lord President’s agreement to the making of the request.

(14) As soon as reasonably practicable after making a request under subsection (9), the requester must publish the documents included with the request in such manner as the requester considers appropriate (having regard to the desirability of the documents being accessible to those likely to have an interest in them).

(15) Regulations under subsection (8) are subject to the affirmative procedure.

Commencement Information

I7 S. 13 not in force at Royal Assent, see s. 103(3)

Requirements of category 2 regulators S

14 Exercise of regulatory functions S

(1) A category 2 regulator must exercise its regulatory functions—

(a) independently of its other functions or activities (if any),

(b) properly in all respects (in particular, with a view to achieving public confidence).

(2) The internal governance arrangements of a category 2 regulator must incorporate such provision as is necessary with a view to ensuring that the regulator—

(a) always exercises its regulatory functions in accordance with subsection (1),

(b) allocates sufficient resources (financial and otherwise) to the exercise of its regulatory functions,

(c) regularly reviews how effectively it is exercising its regulatory functions (in particular, by reviewing the effectiveness of its regulatory scheme).

Commencement Information

I8 S. 14 not in force at Royal Assent, see s. 103(3)

15 Annual reports of category 2 regulators S

(1) A category 2 regulator must prepare a report on the exercise of its regulatory functions as soon as practicable after the end of each reporting year.

(2) The report must include—

(a) information demonstrating how the regulator is complying with the regulatory objectives,

(b) information as to how the regulator is carrying out its regulatory functions,

(c) a statement on the regulator’s strategic priorities for the next reporting year in relation to its regulatory functions,

(d) a summary of the costs incurred by the regulator in carrying out its regulatory functions,

(e) information, in relation to legal services providers that the regulator regulates, about the number of conduct complaints remitted (or treated as having been remitted) to it under the 2007 Act, and the number of those complaints that are determined, discontinued or reinstated by it,

(f) information on any measures taken or financial penalties imposed by the regulator on the legal services providers that it regulates as a result of complaints remitted (or treated as having been remitted) to it under the 2007 Act (including information as to compliance with the measures and the actions taken to enforce them),

(g) information about directions (if any) given under section 20, including—

(i) the number of directions given in pursuance of each of the purposes in section 20(3),

(ii) a summary of which types of rules are being disapplied or modified (and how frequently they are being disapplied or modified),

(iii) any trends in the kinds of directions that were applied for, rejected or granted,

(iv) any changes in such trends (if any) from the previous report,

(h) where the Commission has given a direction in relation to the handling of complaints, details of how the regulator has complied with it,

(i) details of steps taken by the regulator to ensure compliance with any measures taken under section 19 by the Lord President,

(j) except in the case where the regulator is the Faculty of Advocates, a statement indicating whether the regulator considers the category to which it has been assigned is appropriate for the purposes of section 7 (having regard to section 7(6)).

(3) When preparing an annual report, a category 2 regulator must consult the independent advisory panel of the Commission.

(4) A category 2 regulator must—

(a) publish its annual report by such electronic means as the regulator considers appropriate, and

(b) send a copy of its annual report to the Lord President,

as soon as practicable after the end of the reporting year to which the annual report relates.

(5) In this section—

• “conduct complaint” is to be construed in accordance with Part 1 of the 2007 Act,

• “reporting year” means, in relation to a category 2 regulator, a 12 month period that coincides with the regulator’s financial year.

Commencement Information

I9 S. 15 not in force at Royal Assent, see s. 103(3)

Requirements of both category 1 and category 2 regulators S

16 Register of regulated legal services providers S

(1) Each category 1 and category 2 regulator must establish and maintain a register of the legal services providers that it regulates which are authorised to provide legal services.

(2) The register must contain—

(a) in relation to each legal services provider that is an individual—

(i) the name of the individual,

(ii) the address of the place of business (or primary place of business) of the individual as most recently notified to the regulator by or on behalf of the legal services provider,

(iii) the length of time that the individual has been regulated by the regulator in connection with providing legal services,

(iv) details of any sanction resulting from disciplinary action taken against the individual, for the period of 3 years beginning with the date of its imposition,

(b) in relation to each legal services provider that is not an individual—

(i) the name of the body and what type of body it is (for example, a partnership),

(ii) the address of its principal place of business as most recently notified to the regulator by or on behalf of the legal services provider,

(iii) the length of time that the body has been regulated by the regulator in connection with providing legal services,

(iv) details of any sanction resulting from disciplinary action taken against the body, for the period of 3 years beginning with the date of its imposition.

(3) The register must also contain the details of any person or body that it regulates who or which—

(a) is not authorised to provide legal services but is entitled to be so authorised, and

(b) wishes to continue to appear in the register.

(4) An entry for a legal services provider that appears in the register by virtue of subsection (3) must state that the provider is not providing legal services at that time.

(5) The register may contain such other information relating to any person or body it regulates as the regulator considers appropriate.

(6) During any period where a legal services provider’s authorisation to provide legal services is suspended, the entry for that provider must be removed from the register (and, if such suspension is removed, the entry must be restored).

(7) The register must be accessible to, and searchable by, the public, free of charge, by such electronic means as the regulator considers appropriate.

(8) In this section, a reference to a legal services provider being authorised includes a reference to—

(a) a solicitor who has in force a practising certificate (within the meaning of section 4 of the 1980 Act),

(b) a practising advocate (who is not suspended),

(c) a legal business that is authorised to provide legal services by a category 1 regulator.

Commencement Information

I10 S. 16 not in force at Royal Assent, see s. 103(3)

17 Professional indemnity insurance S

(1) Each category 1 and category 2 regulator must have rules concerning indemnity for the legal services providers it regulates against any kind of professional liability.

(2) In particular, the rules may—

(a) require the regulator to establish and maintain a fund or funds for the purpose of such indemnity,

(b) require the regulator to take out and maintain insurance with an authorised insurer,

(c) require legal services providers or any specified type or description of such providers to take out and maintain insurance with an authorised insurer.

(3) Failure to comply with rules made under this section may be treated as professional misconduct or unsatisfactory professional conduct.

(4) Before making or amending rules in pursuance of subsection (1), the regulator (or, where section 8(2) applies, its regulatory committee) must—

(a) consult—

(i) in the case where the rules are being made or amended by a regulatory committee, the governing body of the regulator, and

(ii) the independent advisory panel of the Commission, and

(b) obtain the agreement of the Lord President to the making of the rules or, as the case may be, the amendments.

(5) In this section, an “authorised insurer” is—

(a) a person who has permission under Part 4A of the Financial Services and Markets Act 2000 to effect or carry out contracts of general liability insurance,

(b) a person who has permission under Part 4A of that Act to effect or carry out contracts of insurance relating to accident, sickness, credit, suretyship, miscellaneous financial loss and legal expenses.

(6) The definition of “authorised insurer” must be read with—

(a) section 22 of the Financial Services and Markets Act 2000,

(b) any relevant order under that section, and

(c) schedule 2 of that Act.

(7) In this section, “professional liability” means any civil liability incurred by a legal services provider (or former legal services provider) in connection with the provision of legal services or other services (in addition to legal services) that form part of the professional practice of the solicitors or qualifying individuals within the legal business (within the meaning of section 39(2)) that provides the legal services.

Commencement Information

I11 S. 17 not in force at Royal Assent, see s. 103(3)

Powers of the Lord President in relation to regulators S

18 Review of regulatory performance by the Lord President S

(1) If the condition in subsection (2) is met, the Lord President may review the performance of a category 1 or category 2 regulator’s regulatory functions—

(a) on the Lord President’s own initiative, or

(b) if the Lord President is requested to do so by—

(i) the Scottish Parliament following a resolution of the Parliament that the request should be made (whether or not following consideration of the regulator’s annual report),

(ii) the independent advisory panel of the Commission, or

(iii) Consumer Scotland.

(2) The condition is that the Lord President is concerned that the regulator is failing or is likely to fail—

(a) to exercise its regulatory functions in a manner that is compatible with the regulatory objectives, or

(b) to comply with the requirements imposed on the regulator under this Act or any other enactment.

(3) A request for a review may be made under subsection (1)(b) by a requesting body only where the requesting body—

(a) is concerned that the regulator may be failing, or may be likely to fail—

(i) to exercise its regulatory functions in a manner that is compatible with the regulatory objectives, or

(ii) to comply with the requirements imposed on the regulator under this Act or any other enactment, and

(b) has—

(i) given notice to the regulator of its reasons for proposing to make the request based on its concerns, and

(ii) given the regulator a reasonable opportunity (which must be no fewer than 28 days from the date of the notice) to respond to the notice and address the requesting body’s concerns (or commit to addressing those concerns).

(4) A request for a review made under subsection (1)(b)—

(a) must specify each regulatory function or other function of the regulator to which the request relates, and

(b) must be accompanied by—

(i) a copy of the requesting body’s notice sent to the regulator under subsection (3), and

(ii) either—

(A) a copy of any written response (or a written summary of any verbal response) by the regulator to the notice given under subsection (3) which the requesting body considers to be insufficient to address its reasons for proposing to make a request for a review, or

(B) written confirmation from the requesting body that the regulator has failed to respond to its notice given under subsection (3) within the required period for a response.

(5) Reviewing the performance of a category 1 or category 2 regulator includes (in particular) doing so by reference to—

(a) its compliance with the regulatory objectives,

(b) the exercise of its regulatory functions,

(c) its compliance with the requirements imposed on it under this Act or any other enactment,

(d) the operation of its regulatory committee (if any) or other internal governance arrangements,

(e) its compliance with—

(i) any direction to it by the Commission under the 2007 Act, or

(ii) any measures applying to it by virtue of section 19(4).

(6) A category 1 or 2 regulator must—

(a) provide such information about its performance of its regulatory functions as the Lord President may reasonably request (whether in connection with a review under subsection (1) or a decision as to whether to conduct such a review), and

(b) do so within the period of 28 days beginning with the date of the request (or such longer period as the Lord President may allow).

(7) Subsection (8) applies if—

(a) the Lord President requests information from a category 1 or category 2 regulator in connection with an existing review under subsection (1) relating to the regulator, and

(b) the regulator fails, without a reasonable excuse, to provide some or all of the requested information within the 28 day period mentioned in subsection (6) (or within such longer period allowed by the Lord President to respond).

(8) The Lord President may add the failure to the matter (or matters) being considered as part of the existing review but, before doing so, the Lord President must notify the regulator in writing of the proposal and give the regulator an opportunity to respond within the period specified in the notice (which must be no fewer than 14 days from the date of the notice) to—

(a) provide all of the information requested under subsection (6), or

(b) provide a reasonable excuse for the failure to provide all of the requested information within the period specified in that subsection (or within such longer period allowed by the Lord President to respond to the notice under that subsection).

(9) If the Lord President considers that any person other than a category 1 or category 2 regulator may hold information relating to the performance of a category 1 or category 2 regulator’s regulatory functions—

(a) the Lord President may ask the person to confirm whether they hold such information as the Lord President may specify in the request, and

(b) the person must respond to the request as soon as practicable and the response must include—

(i) confirmation of whether or not the person holds the information specified in the request, and

(ii) if any such information is held by the person, details of the nature of the information that is held.

(10) Any person other than a category 1 or category 2 regulator who holds information relating to the performance of a category 1 or category 2 regulator’s regulatory functions must—

(a) provide such of that information as the Lord President may reasonably request, and

(b) do so within the period of 28 days beginning with the date of the request (or such longer period as the Lord President may allow).

(11) In conducting a review under subsection (1), the Lord President must consult such persons or bodies as the Lord President considers appropriate.

(12) Following a review under subsection (1), the Lord President must—

(a) prepare a report detailing the Lord President’s findings and any measures the Lord President intends to take under section 19,

(b) publish the report in such manner as the Lord President considers appropriate (having regard to the desirability of it being accessible to those likely to have an interest in the report), and

(c) send a copy of the report to—

(i) the regulator to which the review relates, and

(ii) if the review was conducted following a request under subsection (1)(b), the requesting body.

(13) If a request for a review is made under subsection (1)(b) and the Lord President decides not to conduct a review under subsection (1), the Lord President must inform the requesting body in writing of the reasons for the Lord President’s decision.

Commencement Information

I12 S. 18 not in force at Royal Assent, see s. 103(3)

19 Measures open to the Lord President S

(1) The Lord President may, in relation to a category 1 or category 2 regulator, take one or more of the measures mentioned in subsection (4) if the Lord President considers that to be necessary following a review under section 18(1).

(2) When considering whether it is necessary to take any of those measures, or a combination of them, the Lord President must take account of the effect that it may have on the regulator’s observance of the regulatory objectives.

(3) Schedule 2 (to which subsection (1) is subject) makes provision concerning the measures mentioned in subsection (4) and the procedure to be followed in taking them.

(4) The measures are—

(a) setting performance targets,

(b) directing that action be taken,

(c) publishing a statement of censure,

(d) making changes to the regulatory functions exercised by the regulator,

(e) making changes to the way in which any of the regulatory functions of the regulator are to be exercised by it,

(f) removing all of the regulatory functions exercised by—

(i) an accredited regulator, or

(ii) a body which has had an application under section 25 of the 1990 Act granted under section 26 of that Act.

(5) The Scottish Ministers may by regulations—

(a) specify other measures that may be taken by the Lord President in relation to category 1 and category 2 regulators,

(b) make further provision about the measures that the Lord President may take (including for the procedures to be followed).

(6) But the Scottish Ministers may exercise the power to make regulations under subsection (5) only following, and in accordance with, a request to exercise the power received from the Lord President.

(7) Before making a request mentioned in subsection (6), the Lord President must consult—

(a) each category 1 and category 2 regulator,

(b) the independent advisory panel of the Commission, and

(c) such other person or body as the Lord President considers appropriate.

(8) A request under subsection (6) must include—

(a) a document setting out the reasons for the request, and

(b) copies of any written representations received in response to the consultation under subsection (7).

(9) As soon as reasonably practicable after making a request under subsection (6), the Lord President must publish the documents included with the request in such manner as the Lord President considers appropriate (having regard to the desirability of the documents being accessible to those likely to have an interest in them).

(10) Regulations under subsection (5) are subject to the affirmative procedure.

Commencement Information

I13 S. 19 not in force at Royal Assent, see s. 103(3)

Special rule changes S

20 Power to direct special rule changes S

(1) A regulator may, on the application of a legal services provider that it regulates, direct that any rule of the regulator—

(a) does not apply to the provider, or

(b) applies to the provider with such modifications as may be specified in the direction.

(2) A regulator may give a direction only if it is satisfied the direction is compatible with the regulatory objectives.

(3) A direction may be given where the regulator considers it—

(a) desirable for the purpose of enabling a new or alternative way of providing or regulating legal services to be piloted,

(b) reasonable and proportionate for the purpose of—

(i) avoiding a regulatory conflict,

(ii) removing an unnecessary rule, or

(iii) making a rule less onerous, or

(c) necessary or appropriate in the circumstances.

(4) A direction may not disapply or modify a requirement under this Act or any other enactment.

(5) Where a regulator considers that giving a direction for the purpose described in subsection (3)(a) could have the effect of restricting, distorting or preventing competition to any significant extent, it must, before giving the direction, consult the Competition and Markets Authority on the effect of the direction.

(6) A copy of a direction must be given to—

(a) the legal services provider to whom the direction relates, and

(b) if the direction falls within subsection (7), the Lord President.

(7) A direction falls within this subsection if—

(a) it disapplies or modifies such rules or types of rules as the Lord President may specify for the purpose of this section, and

(b) the Lord President has notified the regulator that copies of directions relating to such rules (or types of rules) are to be given.

(8) A direction—

(a) must specify—

(i) the day on which it comes into force, and

(ii) the day on which it ceases to have effect or whether it is to have effect for an indefinite period,

(b) may be subject to conditions, and

(c) may make different provision for different purposes.

(9) A legal services provider to whom a direction relates must inform the regulator of any change of circumstances relevant to the direction.

(10) A direction ceases to have effect on whichever day is the earlier of—

(a) if the direction specifies that it ceases to have effect on a particular day, that day,

(b) if the direction is revoked under section 21, the day on which the revocation comes into force.

(11) An application under this section must be made in such manner as the regulator may direct.

(12) In this section—

• “direction” means, in relation to a regulator, a direction given (or to be given) by the regulator under subsection (1) (including as it may be amended under section 21),

• “regulator” means a category 1 or category 2 regulator or an approved regulator of licensed providers,

• “rule” means, in relation to a regulator, a rule (including a rule in a scheme) made in the exercise of the regulator’s regulatory functions.

(13) A function conferred on a regulator by this section or section 21 is a regulatory function of the regulator (see also sections 3 and 6).

Commencement Information

I14 S. 20 not in force at Royal Assent, see s. 103(3)

21 Powers to amend or revoke directions S

(1) A regulator may—

(a) amend a direction on the application of the legal services provider to whom it relates, or

(b) revoke a direction.

(2) The Lord President may revoke a direction given for the purpose described in section 20(3)(a) at any time by giving notice to—

(a) the regulator that gave the direction, and

(b) the legal services provider to whom the direction relates.

(3) Section 20(3) to (11) applies to an amendment under subsection (1) as it applies to a direction.

(4) Section 20(6) and (8)(a) applies to a revocation under subsection (1) as it applies to a direction.

(5) Section 20(8)(a) applies to a revocation under subsection (2) as it applies to a direction.

(6) In this section, “direction” and “regulator” have the meanings given in section 20(12).

Commencement Information

I15 S. 21 not in force at Royal Assent, see s. 103(3)

22 Register of directions S

(1) A regulator must establish and maintain a register of relevant directions.

(2) The register must for each direction—

(a) contain a copy of—

(i) the direction, and

(ii) any amendments to the direction, and

(b) specify—

(i) the day on which the direction will cease to have effect (if not revoked earlier), or

(ii) whether the direction is to have effect for an indefinite period.

(3) A regulator—

(a) must withhold information in a document mentioned in subsection (2) if satisfied that its disclosure would or would be likely to breach the data protection legislation,

(b) may withhold information in such a document if satisfied that its disclosure would or would be likely to—

(i) prejudice substantially the commercial interests of any person, or

(ii) breach an obligation of confidence owed by any person.

(4) The register must be accessible to, and searchable by, the public, free of charge, by such electronic means as the regulator considers appropriate.

(5) In this section—

• “the data protection legislation” has the meaning given by section 3(9) of the Data Protection Act 2018,

• “regulator” has the meaning given by section 20(12),

• “relevant direction” means, in relation to a regulator, a direction given by the regulator under section 20(1) for the purpose described in section 20(3)(a) that is still in force.

Commencement Information

I16 S. 22 not in force at Royal Assent, see s. 103(3)