Part 1

Regulatory framework
Chapter 1

Objectives, principles and key definitions

Overview of Part

Overview of the regulatory framework
1
1
Chapter 1 makes provision in respect of—
a
the objectives of regulating legal services and how they are to be applied (see sections 2 and 3),
b
the professional principles (see section 4),
c
defining key expressions for the purposes of this Act (see sections 5 and 6).
2
Chapter 2 makes provision in respect of regulators of legal services, which includes—
a
establishing two categories of regulator and assigning the existing regulators to one of those categories (see section 7),
b
setting the requirements for a category 1 regulator, which include—
i
having an independent regulatory committee (where necessary) which is responsible for exercising its regulatory functions (see sections 8 to 11),
ii
preparing an annual report (see section 12),
iii
having a compensation fund (see section 13),
c
setting the requirements for a category 2 regulator, which include—
i
exercising its regulatory functions independently of any other functions it has and properly in all respects (see section 14),
ii
preparing an annual report (see section 15),
d
requiring both category 1 and category 2 regulators to—
i
maintain a publicly available register of the legal services providers that it regulates (see section 16), and
ii
have rules in respect of professional indemnity insurance (see section 17),
e
setting out the role and powers of the Lord President in respect of regulators and the regulatory framework (see sections 18 and 19 and schedule 2),
f
conferring power on regulators to make special rule changes in relation to a particular legal services provider where it is appropriate to do so (see sections 20 to 22).
3
Paragraph 40 of schedule 3 provides for category 1 regulators to be subject to the Freedom of Information (Scotland) Act 2002 in respect of the exercise of their regulatory functions.
4
Chapter 3 makes provision about the process for a body to become accredited to authorise persons and acquire and exercise rights to provide legal services, which includes—
a
applications and the application process (see sections 23 and 26),
b
requiring the applicant to produce a draft regulatory scheme, which must meet certain requirements (see section 24),
c
the manner in which applications are to be considered and approved (see sections 27 and 28),
d
how any rights acquired by persons authorised by the accredited regulator are to be exercised (see section 29),
e
how the rights may be surrendered or revoked (and what happens to the providers affected) (see sections 30, 34 and 35),
f
the review of regulatory schemes (see sections 32 and 33).
5
Part 1 of schedule 1 makes amendments to enactments relating to the Law Society in consequence of the Society being a category 1 regulator and Part 1 of schedule 3 makes other consequential amendments relating to the Society.

Regulatory objectives

Regulatory objectives
2
1
The objectives of regulating legal services are—
a
to support the constitutional principles of the rule of law and the interests of justice,
b
to protect and promote the interests of consumers and the wider public interest,
c
to promote—
i
access to justice,
ii
an independent, strong and diverse legal profession,
iii
quality, innovation and competition in the provision of legal services,
iv
effective communication between regulators and legal services providers, and
v
effective communication between regulators and bodies that represent the interests of consumers, and
d
for those regulating legal services to—
i
use and promote best practice in relation to assessing and improving the quality of regulation and compliance with applicable legislation and rules,
ii
adhere to the regulatory principles described in section 3(4), and
iii
promote and maintain adherence to the professional principles.
2
In this Act, the “regulatory objectives” are the objectives described in subsection (1).

Application of the regulatory objectives
3
1
A regulatory authority must so far as practicable exercise its regulatory functions (see section 6) in a manner which—
a
is compatible with the regulatory objectives, and
b
it considers most appropriate to meet those objectives.
2
For the purpose of section 2(1)(b) and (c), a regulatory authority must take into account the principles that—
a
a consumer should have access to a range of legal services that are affordable and suited to the consumer’s needs,
b
a consumer should receive sufficient information about the consumer’s rights and the services that are available,
c
a consumer should be treated fairly at all times,
d
a consumer should be able to access a means of redress when services are not of a suitable standard, and
e
the views of consumers should be understood and taken into account.
3
Without limit to the generality of section 2(1)(c)(ii), a regulatory authority must encourage equal opportunities (as defined in Section L2 of Part 2 of schedule 5 of the Scotland Act 1998).
4
For the purpose of section 2(1)(d)(ii), the regulatory principles are—
a
that regulatory functions should be—
i
exercised in a way that is transparent, accountable, proportionate and consistent, and
ii
targeted only at cases in which action is needed, and
b
that regulatory functions should be exercised in a way that contributes to achieving sustainable economic growth, except to the extent that it would be inconsistent with the regulatory objectives to do so.
5
For the purpose of this section, the regulatory authorities are—
a
the Court of Session,
b
the Lord President,
c
the Commission,
d
the Scottish Solicitors’ Discipline Tribunal,
e
each category 1 and category 2 regulator, and
f
each approved regulator of licensed providers.

Professional principles

Professional principles
4
1
A person providing legal services should—
a
support the proper administration of justice,
b
act with independence (in the interests of justice),
c
act with integrity,
d
act in the best interests of the person’s clients (and keep clients’ affairs confidential),
e
maintain good standards of work,
f
where—
i
exercising a right of audience before any court, or
ii
conducting litigation in relation to proceedings in any court,
comply with such duties as are normally owed to the court by such persons,
g
meet the person’s obligations under any relevant professional rules,
h
act in conformity with professional ethics.
2
In this Act, the “professional principles” are the principles described in subsection (1).

Meaning of key expressions

Meaning of “legal services” and “legal services provider”
5
1
For the purposes of this Act, legal services are services which consist of (at least one of)—
a
the provision of legal advice or assistance in connection with—
i
any contract, deed, writ, will or other legal document,
ii
the application of the law, or
iii
any form of resolution of legal disputes,
b
the provision of legal representation in connection with—
i
the application of the law, or
ii
any form of resolution of legal disputes.
2
But, for those purposes, legal services do not include—
a
judicial activities,
b
any other activity of a judicial nature,
c
any activity of a quasi-judicial nature, or
d
any activity which involves acting as a third party decision-maker or facilitator in a type of alternative dispute resolution.
3
In subsection (1)(a)(iii) and (b)(ii), “legal disputes” includes disputes as to any matter of fact the resolution of which is relevant to determining the nature of any person’s legal rights or obligations.
4
In this Act, “legal services provider” means a person or body that provides legal services (whether or not directly to the public and whether or not the person’s provision of such legal services is regulated).

Meaning of regulatory functions
6
For the purposes of this Act, a reference to the regulatory functions of a regulatory authority is a reference to its functions of regulating legal services providers in relation to any matter of professional practice, conduct or discipline including, as appropriate—
a
setting standards for admission or authorisation and the ongoing training of its providers,
b
handling complaints about its providers,
c
making regulatory rules under any relevant enactment, and
d
complying with the requirements imposed on the regulatory authority under this Act (for example, in relation to keeping a register of its providers) and, if applicable, Part 2 of the 2010 Act.
Chapter 2

regulators

Regulatory categories

Regulatory categories
7
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.

Requirements of category 1 regulators

Exercise of regulatory functions
8
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.

Regulatory committee: composition and membership
9
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.

Regulatory committee: lay and legal members
10
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.

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

Annual reports of category 1 regulators
12
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.

Compensation funds
13
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.

Requirements of category 2 regulators

Exercise of regulatory functions
14
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).

Annual reports of category 2 regulators
15
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.

Requirements of both category 1 and category 2 regulators

Register of regulated legal services providers
16
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.

Professional indemnity insurance
17
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.

Powers of the Lord President in relation to regulators

Review of regulatory performance by the Lord President
18
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.

Measures open to the Lord President
19
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.

Special rule changes

Power to direct special rule changes
20
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).

Powers to amend or revoke directions
21
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).

Register of directions
22
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.
Chapter 3

New regulators of legal services

Applications

Right to provide legal services
23
1
A body may apply to the Lord President for the purpose of the body being accredited to—
a
authorise persons to exercise (any or all of) the rights listed in subsection (2), and
b
regulate those persons’ exercise of the acquired rights.
2
The rights are—
a
the right to conduct litigation on behalf of members of the public,
b
rights of audience,
c
the right to provide other types of legal services.
3
Only natural persons may be authorised to exercise the rights listed in paragraphs (a) and (b) of subsection (2).
4
An application for accreditation under this section must include—
a
a draft regulatory scheme,
b
a statement that the body will comply with the requirements of section 26, and
c
confirmation that the body has consulted its members in relation to the application and copies of any written representations received in response to the consultation.

Regulatory scheme
24
1
The draft regulatory scheme to accompany an application for accreditation under section 23(4) must—
a
specify the rights that it is proposed persons authorised by the body may acquire,
b
contain the body’s proposed—
i
authorisation rules,
ii
practice rules, and
iii
if applicable, its ALB rules for the purposes of Part 2,
c
set out—
i
how the body will exercise its regulatory functions compatibly with the regulatory objectives,
ii
the regulatory category to which the body thinks it should be assigned,
d
deal with such other regulatory matters as the Scottish Ministers may by regulations specify (and in such manner as the regulations may specify).
2
For the purpose of subsection (1)(a), an application to acquire (either or both of) the rights listed in paragraph (a) or (b) of section 23(2) must specify—
a
the courts in which authorised providers are to be able to practise, and
b
the categories of proceedings authorised providers are to be able to undertake.
3
The authorisation rules are rules about—
a
the procedure for a person to become an authorised provider of the body, including—
i
the making of applications for authorisation,
ii
the criteria to be met by applicants,
iii
the determination of applications,
iv
the grant of authorisation to exercise acquired rights,
b
the terms of the authorisation including, in particular, the imposition of conditions or restrictions,
c
circumstances in which the authorisation may be suspended or withdrawn,
d
fees that the body intends to charge in connection with the authorisation,
e
how the body will review any decision—
i
refusing an application for authorisation,
ii
granting an application subject to conditions or restrictions,
iii
suspending or withdrawing the authorisation.
4
The authorisation rules must provide—
a
that only persons that the body considers to be fit and proper may be authorised,
b
for the suspension or withdrawal of authorisation where an authorised provider is breaching (or has breached) the regulatory scheme or other rules of professional practice that apply to it.
5
The practice rules are rules about—
a
the standards to be met by authorised providers in the exercise of acquired rights,
b
accounting and auditing,
c
professional indemnity (in respect of which, see section 17),
d
the making and handling of complaints and, in particular, how the body will deal with complaints remitted (or treated as having been remitted) to it under the 2007 Act in relation to its authorised providers,
e
the measures the body may take, in relation to its authorised providers, if—
i
there is a breach of the regulatory scheme, or
ii
a complaint referred to in paragraph (d) is upheld.
6
The practice rules must include provision enabling the body to comply with the provisions of section 29(4).
7
For the purpose of subsection (5)(d), the practice rules must—
a
include rules relating to reviews of final decisions of the body made in relation to complaints remitted (or treated as having been remitted) to the body under the 2007 Act in relation to its authorised providers,
b
require publication of a final decision relating to a conduct complaint suggesting professional misconduct of an authorised provider of the body that is remitted to the body by the Commission (or is treated as having been so remitted by virtue of section 33A(2) of the 2007 Act),
c
require such a decision to include—
i
detail of any facts established,
ii
a statement of reasons for the making of the decision, and
iii
where the complaint is upheld, information about any penalty imposed,
d
where such a complaint is upheld, allow the body to omit any information from the published decision which it considers would be likely to damage the interests of persons other than—
i
the authorised provider against whom the complaint is made, and
ii
where the authorised provider is a natural person, the partner or family of that person,
(but subject to the body publishing its reasons for any such omission),
e
where such a complaint is not upheld, allow the body to omit the name of the authorised provider against whom the complaint is made from the published decision where it considers that to be appropriate.
8
In relation to draft regulatory schemes which seek a right of audience, the practice rules must also include provision—
a
stating general criteria to which authorised providers should have regard in determining whether to accept instructions to represent a person or provide legal services in particular circumstances,
b
stating the order of precedence of courts,
c
securing that, where reasonably practicable, any person wishing to be represented before any court by one of its providers holding an appropriate right of audience is so represented.
9
For the purposes of the rules required under subsection (8), the Inner and Outer Houses of the Court of Session and the High Court of Justiciary exercising its appellate jurisdiction may be treated as separate courts.
10
Regulations under subsection (1) are subject to the affirmative procedure.

Regulatory scheme - additional matters to be included: further provision
25
1
The Scottish Ministers may exercise the power to make regulations under section 24(1) only if they have received a request to exercise the power from—
a
the Lord President,
b
an accredited regulator, or
c
the independent advisory panel of the Commission.
2
Before making a request under subsection (1), the person making the request (“the requester”) must—
a
consult—
i
each accredited regulator (or each other accredited regulator if the requester is an accredited regulator),
ii
the independent advisory panel of the Commission unless the panel is the requester,
iii
the Competition and Markets Authority, 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.
3
For the purpose of seeking the Lord President’s agreement under subsection (2)(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,
b
copies of any written representations received in response to the consultation under subsection (2)(a).
4
A request under subsection (1) 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 (2)(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.
5
As soon as reasonably practicable after making a request under subsection (1), 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).

Publication of draft regulatory scheme and representations
26
1
A body making an application under section 23 must—
a
make a copy of its draft regulatory scheme available electronically for the duration of the relevant period,
b
send a copy of its draft regulatory scheme to the following persons (and inform them that they may make written representations concerning the draft scheme in accordance with subsection (4))—
i
the Competition and Markets Authority,
ii
the Commission, and
iii
the independent advisory panel of the Commission,
c
at the time of making the application, place an advertisement containing the information described in subsection (2) in the Edinburgh Gazette and in a daily newspaper circulating throughout Scotland.
2
An advertisement required under subsection (1)(c) must state that—
a
a copy of the draft regulatory scheme is available electronically during the relevant period,
b
written representations concerning the draft scheme may be made to the Lord President, and
c
for such representations to be considered, they must meet the requirements described in subsection (4).
3
Any person may make written representations concerning a draft regulatory scheme during the relevant period.
4
Representations under subsection (3) must—
a
be made to the Lord President, and
b
be received by the Lord President before the expiry of the relevant period.
5
In this section—
- “draft regulatory scheme” in relation to an application made under section 23, means the draft regulatory scheme required to accompany the application under section 23(4),
- “relevant period” in relation to an application under section 23, means the period of six weeks beginning with the date on which the application is made.

Consideration and grant

Consideration of applications
27
1
The Lord President is to consider an application submitted under section 23(1) and must consider any written representations made to the Lord President in accordance with section 26(3) and (4).
2
The Lord President may not consider the application if the Lord President is not satisfied that the requirements of section 26 have been complied with.
3
The Lord President may make preliminary observations to the body in relation to the draft regulatory scheme accompanying the application.
4
In the event that the body makes adjustments to the draft regulatory scheme in response to preliminary observations made under subsection (3), the Lord President is to consider the draft scheme as so adjusted.
5
The Lord President, when considering a draft regulatory scheme, is—
a
to have regard to whether the provisions of the scheme would be sufficient to achieve, and to ensure the maintenance of, appropriate standards of conduct and practice by persons who may acquire the rights sought, and
b
to consult—
i
the Scottish Ministers,
ii
the Competition and Markets Authority,
iii
the independent advisory panel of the Commission, and
iv
such other persons as the Lord President considers appropriate.
6
In considering the proposed practice rules, the Lord President is to have regard to the desirability of there being common principles applying in relation to the exercising of rights to conduct litigation and rights of audience by all practitioners in relation to the court or, as the case may be, the courts, mentioned in the application.

Approval of application and giving effect to the regulatory scheme
28
1
This section applies where the Lord President has considered an application in accordance with section 27.
2
If the Lord President—
a
is satisfied with the draft regulatory scheme, the Lord President is to approve the application and inform the body,
b
is not satisfied with the draft scheme, the Lord President is to refuse the application and inform the body, giving written reasons for the refusal.
3
As soon as reasonably practicable after notifying the body under subsection (2) of the decision to approve or refuse the application, the Lord President must publish notification of the decision.
4
Notification under subsection (3) must—
a
include a summary of the Lord President’s reasons for the decision, and
b
be published in such manner as the Lord President considers appropriate (having regard to the desirability of the document being accessible to those likely to have an interest in it).
5
The Lord President must send a copy of a letter approving or refusing an application under this section to any person who has made representations in relation to the draft regulatory scheme under section 26(3).
6
Where the application has been approved, the Scottish Ministers must, as soon as reasonably practicable, lay before the Scottish Parliament draft regulations under section 7(5) to assign the body as a category 1 or category 2 regulator.
7
If a body’s application is approved under this section, as soon as reasonably practicable after receiving notice of the Lord President’s approval under subsection (2), the body must—
a
give effect to the draft regulatory scheme and apply it as its regulatory scheme in relation to its authorised providers and persons applying to it for authorisation, and
b
publish its regulatory scheme in a manner that is accessible to the public, free of charge, by such electronic means as the body considers appropriate.
8
For the purposes of this Part, a body which has its application approved under this section is referred to as an accredited regulator.

Exercise of the acquired rights

Exercise of rights to provide legal services
29
1
This section applies when an accredited regulator has given effect to a draft regulatory scheme and applied it as its regulatory scheme under section 28(7), and the regulator is assigned as a category 1 or category 2 regulator.
2
A legal services provider that is authorised by the accredited regulator may exercise an acquired right (or rights).
3
Nothing in subsection (2) (or the authorisation rules of the regulatory scheme) affects the power of any court in relation to any proceedings—
a
to hear a person who would not otherwise have a right of audience before that court in relation to those proceedings, or
b
to refuse to hear a person (for reasons which apply to the person as an individual) who would otherwise have a right of audience before that court in relation to those proceedings, and where a court so refuses it must give its reasons to the person for that decision.
4
Where a conduct complaint is made in relation to the exercise of an acquired right, the accredited regulator of the legal services provider that is the subject of the complaint may, or if so requested by the Lord President must, suspend the provider from exercising the acquired right pending determination of the complaint by the regulator.
5
Where an authorised provider who is authorised to exercise a right of audience in a court is instructed to appear in that court, those instructions are to take precedence before any other professional or business obligation.
6
An authorised provider exercising a right of audience has the same immunity from liability for negligence in respect of the provider’s acts or omissions as if the provider were an advocate.
7
An act or omission on the part of an authorised provider does not give rise to an action for breach of contract in relation to the exercise of a right of audience by the provider.
8
For the purposes of this Chapter—
- “acquired right” means the right or rights to provide legal services specified and described in a regulatory scheme given effect to under section 28,
- “conduct complaint” is to be construed in accordance with Part 1 of the 2007 Act,
- “right of audience” includes, in relation to any court, any such right exercisable by an advocate,
- “right to conduct litigation” means the right to exercise on behalf of a client all or any of the functions, other than any right of audience, which may be exercised by a solicitor in relation to litigation.

Surrender of rights
30
1
An accredited regulator may apply to the Lord President to surrender some or all of the acquired rights.
2
Before submitting an application under subsection (1), the accredited regulator must consult its authorised providers in relation to the proposed application.
3
An application under subsection (1) must include copies of any representations received in response to the consultation under subsection (2).
4
As soon as practicable after receipt of such an application, the Lord President must—
a
send a copy of the application to such person or body (other than an authorised provider of the accredited regulator) as the Lord President considers appropriate, and
b
consult them accordingly.
5
Where an application under subsection (1) is for the surrender of all of the regulator’s acquired rights, consultation under subsection (2) with the body’s authorised providers must, in particular, seek their views about whether a majority of the providers would like—
a
another category 1 or category 2 regulator to authorise them to exercise their acquired rights and regulate their exercise of the acquired rights (if that other regulator is content to so authorise and regulate them), or
b
to form a body and submit an application under section 23 seeking accreditation of the body to authorise them to exercise their acquired rights and regulate their exercise of the acquired rights.
6
A consultee under subsection (2) has a period of 6 weeks beginning with the day on which the consultee receives notification from the accredited regulator of the opportunity to make representations (or, if the regulator considers it appropriate and the Lord President consents, such shorter period as may be specified in the notice) to make representations to the regulator about the proposed surrender.
7
The consultees under subsection (4) have a period of 6 weeks beginning with the day on which a copy of the application is sent (or, if the Lord President considers it appropriate, such shorter period as may be specified when sending a copy to the consultees) to make representations to the Lord President about the proposed surrender.
8
The Lord President may give directions (at any time) as to the requirements with which a body wishing to surrender all or some of its authorised providers’ acquired rights will have to comply.
9
Directions under subsection (8) may—
a
in particular—
i
require arrangements to be made for the completion of any work outstanding at the time the application is made, and
ii
relate to the circumstances of a particular body,
b
be varied or revoked by the Lord President.
10
Where the Lord President grants the application in respect of some or all of the acquired rights of the accredited regulator, the Lord President is to—
a
give notice to the regulator specifying the date (or dates) on which it is to take effect, and
b
publish the notice 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 it).
11
From the date specified in the notice, a person authorised by the body to provide legal services ceases to be authorised and may not exercise the acquired rights or, if applicable, such of them as has been surrendered.
12
Subsection (13) applies where—
a
an application under subsection (1) is for the surrender of all of the regulator’s acquired rights, and
b
the majority of the providers consulted under subsection (2) have expressed a preference for an outcome mentioned in paragraph (a) or (b) of subsection (5).
13
Notice given by the Lord President under subsection (10) may (instead of specifying the date on which the notice is to take effect) specify that the notice is to take effect on the date on which one of the following events occurs—
a
the providers consulted under subsection (2) are authorised to exercise their acquired rights (and are regulated in their exercise of the acquired rights) by another category 1 or category 2 regulator,
b
an application submitted under section 23(1) by a body formed by those providers is approved or refused by the Lord President under section 28.
14
Where a notice under subsection (10) specifies that the notice is to take effect on the occurrence of an event mentioned in subsection (13), subsection (11) has effect as if the reference to “the date specified in the notice” were a reference to “the date of the occurrence of the event mentioned in subsection (13) that is specified in the notice”.

Offence of pretending to have acquired rights
31
1
A person commits an offence if the person without reasonable excuse—
a
takes or uses any name, title, addition or description implying that the person is authorised to exercise an acquired right,
b
otherwise pretends to be authorised to exercise an acquired right.
2
A person who commits an offence under subsection (1) is liable on summary conviction to a fine not exceeding level 4 on the standard scale.

Review of regulatory scheme

Review of regulatory scheme on initiative of accredited regulator
32
1
This section applies where an accredited regulator has carried out a review of its regulatory scheme on its own initiative and proposes such revision to its scheme as it considers appropriate in light of the review.
2
The accredited regulator must send a report to the Lord President detailing the proposed revision to the scheme.
3
Following receipt of a report under subsection (2), the Lord President may—
a
approve the proposed revision to the scheme,
b
not approve the proposed revision to the scheme,
c
direct the accredited regulator to make such revision to its scheme as the Lord President considers should be made.
4
Following revision of its scheme pursuant to paragraph (a) or (c) of subsection (3), the accredited regulator must publish the revised scheme in a manner that is accessible to the public, free of charge, by such electronic means as the regulator considers appropriate.
5
The Lord President may vary or revoke a direction given under subsection (3)(c).

Review of regulatory schemes
33
1
The Lord President may direct an accredited regulator to carry out a review of its regulatory scheme.
2
Following a review, the accredited regulator must give the Lord President a report on the review containing any revisions it proposes to make to its regulatory scheme (if any).
3
Where the Lord President considers that the terms of any proposed revision to the regulatory scheme are satisfactory, the Lord President is to approve the revised scheme and direct the accredited regulator to apply the revised scheme.
4
Subsection (5) applies where the Lord President considers that—
a
the proposed revisions to the scheme are not satisfactory, or
b
revisions should have been proposed (but have not been).
5
Where this subsection applies—
a
the Lord President may direct the accredited regulator to apply the revisions that the Lord President considers should be made to the regulatory scheme from such date as may be specified in the direction, or
b
the Lord President may—
i
provide comments in relation to the proposed revisions to the regulatory scheme, and
ii
direct the accredited regulator to take account of the comments in reviewing the proposed revisions before giving the Lord President a revised report containing any proposed revision to the scheme.
6
Subsections (3) to (5) apply in relation to a revised report given to the Lord President under subsection (5)(b) as they apply in relation to a report given to the Lord President under subsection (2).
7
Following the revision of its regulatory scheme under this section, the accredited regulator must publish its revised scheme in a manner that is accessible to the public, free of charge, by such electronic means as the regulator considers appropriate.
8
The Lord President may vary or revoke a direction given under this section.

Revocation of acquired rights
34
1
Where it appears to the Lord President that an accredited regulator has failed to comply with a direction under section 32(3)(c) or 33(5), the Lord President may revoke the approval of the application under section 28.
2
The Lord President must—
a
give notice of the Lord President’s decision to revoke approval of the application under section 28 (a “decision notice”) to the regulator, and
b
publish the decision notice in such manner as the Lord President considers most appropriate for bringing it to the attention of any relevant person or body.
3
Before issuing a decision notice, the Lord President must consult each person who is authorised by the accredited regulator to provide legal services (“the authorised providers”) in relation to the proposed decision and, in particular, with a view to determining whether, in consequence of the revocation of the accredited regulator’s approval, a majority of the authorised providers would like—
a
another category 1 or category 2 regulator to authorise them to exercise their acquired rights and regulate their exercise of the acquired rights if that other regulator is content to so authorise and regulate them, or
b
to form a body and submit an application under section 23 seeking accreditation of the body to authorise them to exercise their acquired rights and regulate their exercise of the acquired rights.
4
Where a majority of the providers consulted under subsection (3) have expressed a preference for an outcome mentioned in paragraph (a) or (b) of that subsection, the Lord President may decide not to issue a decision notice for such period as the Lord President considers appropriate to enable—
a
another category 1 or category 2 regulator to authorise and regulate the providers, or (as the case may be)
b
the providers to form a body and submit an application under section 23 in respect of that body.
5
From such date as may be specified in a decision notice, a person authorised by the accredited regulator ceases to be so authorised and may not exercise the rights acquired by virtue of that authorisation.

Miscellaneous

Replacement regulatory arrangements for authorised providers
35
1
Where an accredited regulator is a discontinuing regulator as mentioned in paragraph (d) of the definition of that term as set out in subsection (6), the Lord President must consult each authorised provider to determine in particular whether a majority of the authorised providers would like another category 1 or category 2 regulator to authorise them to exercise their acquired rights and regulate their exercise of the acquired rights (if that other regulator is content to so authorise and regulate them).
2
Subsection (3) applies where the Lord President is satisfied that—
a
following consultation under subsection (1), section 30(4) or 34(3) or paragraph 18(2) of schedule 2 (as the case may be), a majority of the authorised providers of a discontinuing regulator would like another category 1 or category 2 regulator to authorise them to exercise their acquired rights and regulate their exercise of the acquired rights, and
b
the other category 1 or category 2 regulator (“the receiving regulator”) is willing to authorise and regulate the authorised providers of the discontinuing regulator.
3
The Lord President may—
a
in a case where the receiving regulator falls within subsection (4), amend the regulatory functions of the receiving regulator to enable it to regulate the authorised providers of the discontinuing regulator,
b
in any other case, request that the Scottish Ministers make regulations under subsection (5) to amend the functions of the receiving regulator.
4
A regulator falls within this subsection if it is an accredited regulator or a body which has had an application under section 25 of the 1990 Act granted under section 26 of that Act.
5
Following a request of the Lord President under subsection (3)(b), the Scottish Ministers may lay a draft of a Scottish statutory instrument containing regulations before the Scottish Parliament to amend the regulatory functions of the receiving regulator.
6
In this section—
- “authorised provider” means a legal services provider that is authorised by a discontinuing regulator to provide legal services,
- “discontinuing regulator” means an accredited regulator that—
  1. is the subject of a potential measure as mentioned in section 19(4)(f) to remove all of its regulatory functions,
  2. has made an application under section 30,
  3. is the subject of regulations to revoke its approval under section 34, or
  4. has ceased operating otherwise than in accordance with any of the ways mentioned in paragraph (a), (b) or (c),
- “regulatory complaint” is to be construed in accordance with Part 1 of the 2007 Act,
- “services complaint” is to be construed in accordance with Part 1 of the 2007 Act.
7
Regulations under subsection (5)—
a
may modify any enactment,
b
are subject to the affirmative procedure.

Consequential amendments and repeals
36
1
Sections 25 to 29 and schedule 2 of the 1990 Act are repealed.
2
Section 40 of the 1990 Act (advisory and supervisory functions of the CMA) is amended as follows.
3
In subsection (1), for paragraph (c) substitute—
c
considering—
i
any provisions of a draft regulatory scheme under section 27 of the Regulation of Legal Services (Scotland) Act 2025, or
ii
any provision which is proposed as a revision to a regulatory scheme under section 33 of that Act,
.
4
Section 42 of the 1990 Act (review of rules approved by the Scottish Ministers) is amended as follows.
5
In subsection (1)—
a
paragraph (b) and the word “or” immediately preceding that paragraph are repealed,
b
in the closing words—
i
the words “and, where the Lord President, in the case of a draft scheme such as is mentioned in paragraph (b), so requests shall” are repealed,
ii
the words “or, as the case may be, the scheme” are repealed.
6
In subsection (2)—
a
in the opening words—
i
the words “or, as the case may be, a scheme,” are repealed,
ii
the words “or scheme” in both places they appear, are repealed,
b
paragraph (b) and the word “or” immediately preceding that paragraph are repealed.
7
Subsections (4) to (6) are repealed.
8
In subsection (7)—
a
the words “and schemes” where they first appear are repealed,
b
the words “and schemes submitted under section 25(1) of this Act” are repealed.

Transitional and saving provision for regulators approved under the 1990 Act
37
Sections 30, 32, 33, 34 and 35 apply to a professional or other body whose application under section 25 of the 1990 Act was approved under section 26 of that Act as they apply to a body whose application for accreditation under section 23 of this Act was approved under section 28 of this Act.
S. 1 not in force at Royal Assent, see s. 103(3)
S. 2 not in force at Royal Assent, see s. 103(3)
S. 3 not in force at Royal Assent, see s. 103(3)
S. 4 not in force at Royal Assent, see s. 103(3)
S. 5 not in force at Royal Assent, see s. 103(3)
S. 6 not in force at Royal Assent, see s. 103(3)
S. 7 not in force at Royal Assent, see s. 103(3)
S. 8 not in force at Royal Assent, see s. 103(3)
S. 9 not in force at Royal Assent, see s. 103(3)
S. 10 not in force at Royal Assent, see s. 103(3)
S. 11 not in force at Royal Assent, see s. 103(3)
S. 12 not in force at Royal Assent, see s. 103(3)
S. 13 not in force at Royal Assent, see s. 103(3)
S. 14 not in force at Royal Assent, see s. 103(3)
S. 15 not in force at Royal Assent, see s. 103(3)
S. 16 not in force at Royal Assent, see s. 103(3)
S. 17 not in force at Royal Assent, see s. 103(3)
S. 18 not in force at Royal Assent, see s. 103(3)
S. 19 not in force at Royal Assent, see s. 103(3)
S. 20 not in force at Royal Assent, see s. 103(3)
S. 21 not in force at Royal Assent, see s. 103(3)
S. 22 not in force at Royal Assent, see s. 103(3)
S. 23 not in force at Royal Assent, see s. 103(3)
S. 24 not in force at Royal Assent, see s. 103(3)
S. 25 not in force at Royal Assent, see s. 103(3)
S. 26 not in force at Royal Assent, see s. 103(3)
S. 27 not in force at Royal Assent, see s. 103(3)
S. 28 not in force at Royal Assent, see s. 103(3)
S. 29 not in force at Royal Assent, see s. 103(3)
S. 30 not in force at Royal Assent, see s. 103(3)
S. 31 not in force at Royal Assent, see s. 103(3)
S. 32 not in force at Royal Assent, see s. 103(3)
S. 33 not in force at Royal Assent, see s. 103(3)
S. 34 not in force at Royal Assent, see s. 103(3)
S. 35 not in force at Royal Assent, see s. 103(3)
S. 36 not in force at Royal Assent, see s. 103(3)
S. 37 not in force at Royal Assent, see s. 103(3)