Regulation of Legal Services (Scotland) Act 2025

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

I1 S. 8 not in force at Royal Assent, see s. 103(3)

I2 S. 8 in force at 5.3.2026 for specified purposes by S.S.I. 2026/96, reg. 2(1)(2), sch. 1

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)

I4 S. 9 in force at 5.3.2026 for specified purposes by S.S.I. 2026/96, reg. 2(1)(2), sch. 1

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

I5 S. 10 not in force at Royal Assent, see s. 103(3)

I6 S. 10 in force at 5.3.2026 for specified purposes by S.S.I. 2026/96, reg. 2(1)(2), sch. 1

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

I7 S. 11 not in force at Royal Assent, see s. 103(3)

I8 S. 11 in force at 5.3.2026 for specified purposes by S.S.I. 2026/96, reg. 2(1)(2), sch. 1

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

I9 S. 12 not in force at Royal Assent, see s. 103(3)

I10 S. 12 in force at 5.3.2026 for specified purposes by S.S.I. 2026/96, reg. 2(1)(2), sch. 1

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

I11 S. 13 not in force at Royal Assent, see s. 103(3)

I12 S. 13 in force at 5.3.2026 for specified purposes by S.S.I. 2026/96, reg. 2(1)(2), sch. 1