(introduced by sections 1(5) and 38(6))
1(1)Section 3A of the 1980 Act (discharge of functions of the Council of the Law Society) is amended as follows.
(2)In subsection (10), in paragraph (a), after “enactment” insert “(but see subsection (11))”.
(3)In subsection (11), in paragraph (a), for “3B to 3G” substitute “3B and 3D and Chapter 2 of Part 1 of the Regulation of Legal Services (Scotland) Act 2025”.
2(1)Section 3B of the 1980 Act is amended as follows.
(2)In subsection (1), for “for the purpose mentioned in subsection (2)” substitute “in accordance with Chapter 2 of Part 1 of the Regulation of Legal Services (Scotland) Act 2025”.
(3)Subsection (2) is repealed.
(4)In subsection (3)—
(a)in the opening words “Accordingly” is repealed,
(b)paragraph (b) and the “or” immediately preceding it are repealed.
(5)After subsection (4), insert—
“(5)Paragraphs (b) and (c) of section 3A(9) do not apply to the Council’s regulatory functions.”.
3The following sections of the 1980 Act are repealed—
(a)section 3C (particular rules applying),
(b)section 3E (further provision for section 3B etc.).
4(1)Section 3F of the 1980 Act (meaning of regulatory functions) is amended as follows.
(2)In subsection (1), for “3B to 3E” substitute “3B and 3D”.
(3)For subsection (2), substitute—
“(2)Those functions include, in particular—
(a)setting standards for admission or authorisation and the ongoing training of the persons described in subsection (1),
(b)handling complaints about those persons,
(c)making regulatory rules under this Act and any other relevant enactment,
(d)administering the Client Protection Fund under section 43,
(e)safeguarding the interests of clients under sections 45A and 46A, and
(f)complying with the requirements imposed on the Council and the regulatory committee under the Regulation of Legal Services (Scotland) Act 2025 (in so far as provision is not made for those matters under this Act).”.
5(1)Section 3G of the 1980 Act (extended meaning of regulatory functions under section 3F) is amended as follows.
(2)In the opening words, for “3B to 3E” substitute “3B and 3D”.
6(1)Section 43 of the 1980 Act (Guarantee Fund) is amended as follows.
(2)After subsection (2), insert—
“(2A)The Client Protection Fund may also be used for the purpose of providing loans or grants to judicial factors appointed in respect of any person described in subsection (2)(a) to (c) in order to mitigate the risk of any further pecuniary losses being suffered by the clients of such a person by reason of the dishonesty.”.
(3)In subsection (5), the words from “they” to the end become paragraph (a) and after that paragraph insert—
“(b)the applicant has already made a claim for the loss in respect of a particular act of dishonesty unless the claim relates to a further loss of which the applicant was unaware (and could not reasonably have known about) at the time of making the original claim.”.
(4)In subsection (6), for “any committee” substitute “a sub-committee or individual”.
(5)The title of section 43 becomes “Client Protection Fund”.
(6)After section 43, insert—
(1)The Scottish Ministers may by regulations make provision in relation to the Client Protection Fund and may, in particular, modify section 43 and schedule 3.
(2)Without limit to that generality, regulations made under this section may—
(a)make provision in relation to when grants are (or are not) to be made,
(b)amend the maximum amount of an individual grant for the time being specified in paragraph 4 of Part 1 of schedule 3,
(c)make provision in connection with the making of contributions to the Fund and its administration and management.
(3)The Scottish Ministers may exercise the power to make regulations under subsection (1) only if they have received a request from—
(a)the Lord President,
(b)the regulatory committee, or
(c)the independent advisory panel established by the Commission under paragraph 11A of schedule 1 of the 2007 Act,
(4)Before making a request under subsection (3), the person making the request (“the requester”) must—
(a)consult—
(i)the regulatory committee unless the committee is the requester,
(ii)the panel mentioned in subsection (3)(c) unless it is the requester, and
(iii)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.
(5)For the purpose of seeking the Lord President’s agreement under subsection (4)(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 (4)(a).
(6)A request under subsection (3) 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 (4)(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.
(7)As soon as reasonably practicable after making a request under subsection (3), 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).
(8)Regulations under subsection (1) are subject to the affirmative procedure (see section 29 of the Interpretation and Legislative Reform (Scotland) Act 2010).”.
7(1)Schedule 3 of the 1980 Act is amended as follows.
(2)In Part 1, paragraph 5 of Part 1 (as inserted by section 130(b) of the 2010 Act) is repealed.
8In section 39 of the 2007 Act (monitoring effectiveness of guarantee funds etc.), in paragraph (a) of subsection (1), before “the Council” insert “the regulatory committee of”.
9(1)Section 3F of the 1980 Act (meaning of “regulatory functions”) is amended as follows.
(2)In paragraph (a) of subsection (1), for “(including firms of solicitors) and incorporated practices” substitute “and authorised legal businesses”.
10(1)Section 18 of the 1980 Act (suspension of practising certificates) is amended as follows.
(2)In subsection (1A)—
(a)in paragraph (a), for “the incorporated practice” substitute “an authorised legal business”,
(b)in paragraph (b)—
(i)for “an incorporated practice” substitute “an authorised legal business”,
(ii)for “incorporated practice with another incorporated practice” substitute “authorised legal business with another authorised legal business”,
(c)for the closing words substitute—
“its authorisation is deemed to be withdrawn and, where the business is an incorporated practice, its recognition under section 34(1A) is deemed to be revoked.”.
(3)In subsection (3A)—
(a)in paragraph (a), for “incorporated practice” substitute “authorised legal business”,
(b)in paragraph (b), for “incorporated practice” substitute “authorised legal business”.
11(1)Section 21 of the 1980 Act (consultants to hold practising certificates) is amended as follows.
(2)In subsection (3), after paragraph (b) insert—
“(c)not being an owner, member or director of another form of authorised legal business, causes or permits their name to be associated with that business,”.
12(1)Section 28 of the 1980 Act (offence for solicitors who are disqualified to seek employment without informing employer) is amended as follows.
(2)In the closing words—
(a)for “a solicitor in connection with that solicitors practice or by an incorporated practice or multi-national practice” substitute “an authorised legal business”, and
(b)the words “him, or as the case may be,” are repealed.
13(1)Section 34 of the 1980 Act (rules as to professional practice, conduct and discipline) is amended as follows.
(2)In subsection (1)—
(a)after “(3)” insert “of this section and section 41 of the Regulation of Legal Services (Scotland) Act 2025”,
(b)for “incorporated practices” substitute “authorised legal businesses (including incorporated practices)”.
(3)In subsection (1A), the “and” after paragraph (d) is repealed and after that paragraph insert—
“(da)in the event that a body corporate is no longer recognised as an incorporated practice, require the review or withdrawal of its authorisation to provide legal services as a legal business, and”.
(4)In subsection (1D), in paragraph (a), for “incorporated practices” substitute “authorised legal businesses”.
14(1)Section 35 of the 1980 Act (accounts rules) is amended as follows.
(2)In subsection (1)—
(a)in paragraph (a), for “solicitors and incorporated practices” substitute “authorised legal businesses”,
(b)in paragraph, (b) for “solicitors and incorporated practices” substitute “authorised legal businesses”,
(c)in paragraph (c), for “solicitors and incorporated practices” substitute “authorised legal businesses”,
(d)the “and” immediately following paragraph (d) is repealed, and after that paragraph insert—
“(da)as to which solicitor is (or solicitors are) responsible for ensuring compliance with the rules made under this section on behalf of an authorised legal business, and”,
(e)in paragraph (e)—
(i)after “solicitors” insert “or authorised legal businesses”,
(ii)for “a solicitor who” substitute “an authorised legal business which”.
15(1)Section 36 of the 1980 Act (interest on client’s money) is amended as follows.
(2)In subsection (1)—
(a)in the opening words, for “a solicitor or an incorporated practice” substitute “an authorised legal business”,
(b)in paragraph (aa), in the closing words, for “solicitor in his or, as the case may be the incorporated practice” substitute “authorised legal business”,
(c)in paragraph (b), for “solicitor’s or, as the case may be, the incorporated practice’s” substitute “authorised legal business’s”.
(3)In subsection (2), for “a solicitor or incorporated practice” substitute “an authorised legal business”.
(4)In subsection (3)—
(a)for “a solicitor or incorporated practice” substitute “an authorised legal business”,
(b)for “solicitor or, as the case may be, incorporated practice” substitute “authorised legal business”,
(c)the words “his or, as the case may be,” are repealed.
(5)In subsection (4), for “a solicitor and his client or an incorporated practice” substitute “an authorised legal business (or any solicitor acting on its behalf)”.
16(1)Section 37 of the 1980 Act (accountant’s certificates) is amended as follows.
(2)In subsection (2), for “incorporated practice” substitute “authorised legal business”.
(3)In subsection (3), in paragraph (b), for “a solicitor or his firm or of an incorporated practice” substitute “an authorised legal business”.
(4)After subsection (3) insert—
“(3A)The accountant’s certificate rules must include rules providing for a particular solicitor (or solicitors) to be responsible for ensuring compliance with the rules on behalf of an authorised legal business.”.
(5)In subsection (5)—
(a)in paragraph (a)—
(i)for “a solicitor who or incorporated practice” substitute “an authorised legal business”,
(ii)for “the solicitor or his firm or, as the case may be, of the incorporated practice” substitute “the authorised legal business”,
(iii)the words “him or them or as the case may be,” are repealed,
(b)in paragraph (b)—
(i)for “a solicitor or incorporated practice who” substitute “an authorised legal business which”,
(ii)the words “he has not in the course of his practice or, as the case may be,” are repealed.
(6)In subsection (6)—
(a)in paragraph (a), in sub-paragraph (iii), for “solicitors or incorporated practices” substitute “authorised legal businesses”,
(b)in the closing words—
(i)the words “a solicitor who satisfies the Council that he or, as the case may be,” are repealed,
(ii)for “incorporated practice” substitute “authorised legal business”.
(7)In subsection (7)—
(a)for “solicitor or incorporated practice” substitute “authorised legal business”,
(b)the words “him, or as the case may be,” are repealed.
17(1)Section 37A of the 1980 Act (accounts and anti-money laundering fees) is amended as follows.
(2)In subsection (1), in paragraph (b), for “incorporated practice” substitute “authorised legal business”.
(3)In subsection (5), in paragraph (b)—
(a)for “incorporated practices” substitute “authorised legal businesses”,
(b)after “as” insert “owners, partners,”.
18(1)Section 39A of the 1980 Act (powers where excessive fees etc. charged) is amended as follows.
(2)In subsection (1), for “incorporated practice” in each place it occurs substitute “authorised legal business”.
(3)In subsection (2), in paragraph (b)—
(a)for “incorporated practice” in both places it occurs substitute “authorised legal business”,
(b)after “are” insert “owners, partners or”.
(4)In subsection (3), for “incorporated practice” where it first occurs substitute “authorised legal business”.
(5)In subsection (4), in paragraph (a), for “incorporated practice” substitute “authorised legal business”.
(6)In subsection (6), for “incorporated practice” substitute “authorised legal business”.
(7)In subsection (7), for “incorporated practice” substitute “authorised legal business”.
19(1)Section 40 of the 1980 Act (power where failure to comply with accounts rules etc.) is amended as follows.
(2)In subsection (1)—
(a)for “incorporated practice” in each place it occurs substitute “authorised legal business”,
(b)in the second paragraph (b), after “are” insert “owners, partners or, as the case may be,”.
(3)In subsection (2), for “incorporated practice” where it first occurs substitute “authorised legal business”.
20(1)Section 41 of the 1980 Act (appointment of judicial factor) is amended as follows.
(2)In the opening words, for “incorporated practice” substitute “authorised legal business”.
(3)In paragraph (a), for “incorporated practice” substitute “authorised legal business”.
(4)In paragraph (c), for “incorporated practice” substitute “authorised legal business”.
(5)In the closing words, for “incorporated practice” in both places it occurs substitute “authorised legal business”.
21(1)Section 42 of the 1980 Act (distribution of sums in client bank account) is amended as follows.
(2)In subsection (1), for “incorporated practice” in both places it occurs substitute “authorised legal business”.
(3)In subsection (2)—
(a)in paragraph (b), for “behoof” substitute “the benefit”,
(b)after paragraph (c) insert—
“(d)the entering by the solicitor into a debt arrangement scheme within the meaning of Part 1 of the Debt Arrangement and Attachment (Scotland) Act 2002.”.
(4)In subsection (2A)—
(a)in the opening words, for “incorporated practice” substitute “authorised legal business”,
(b)before paragraph (a), insert—
“(za)the sequestration of its estate,
(zb)the granting by it of a trust deed for the benefit of creditors,
(zc)the entering by it into a debt arrangement scheme within the meaning of Part 1 of the Debt Arrangement and Attachment (Scotland) Act 2002,”,
(c)in paragraph (b), for “incorporated practice” substitute “authorised legal business”.
(5)In subsection (3), for “incorporated practice” in each place it occurs substitute “authorised legal business”.
22(1)Section 43 of the 1980 Act (Guarantee Fund) is amended as follows.
(2)In subsection (2)—
(a)in paragraph (b)—
(i)for “incorporated practice or any” substitute “authorised legal business or any owner, partner,”,
(ii)for “incorporated practice” where it second occurs substitute “authorised legal business”,
(iii)for “recognised under section 34(1A)” substitute “authorised”,
(b)in paragraph (c), the words “(with the same meaning as for Part 2 of the 2010 Act)” are repealed.
(3)In subsection (3)—
(a)in paragraph (cc)—
(i)for “incorporated practice or any” substitute “authorised legal business or any owner, partner,”,
(ii)for the words from “director” where it second occurs to the end of the paragraph substitute “owner, partner, director, member, manager, secretary or other employee of the authorised legal business in connection with the business”,
(b)in paragraph (g)—
(i)after “any” where it second occurs insert “owner, partner,”,
(ii)for “incorporated practice” substitute “authorised legal business”,
(iii)for “incorporated practice’s” substitute “authorised legal business’s”.
(4)In subsection (7), in paragraph (c), for “incorporated practice” substitute “authorised legal business”.
23(1)Part 1 of schedule 3 of the 1980 Act (the Scottish Solicitors Guarantee Fund) is amended as follows.
(2)In paragraph 1—
(a)in sub-paragraph (2A), for paragraph (a) substitute—
“(aa)owners, partners, directors or members of authorised legal businesses, or”,
(b)in sub-paragraph (2B), in paragraph (a), for the words from the beginning to “34(1A)” substitute “by every authorised legal business in respect of each year during which, or part of which, it is authorised to provide legal services by the Society”,
(c)in sub-paragraph (3A)—
(i)in paragraph (a)(i)—
(A)for “incorporated practices” substitute “authorised legal businesses”,
(B)after “as” insert “owners, partners,”,
(ii)in paragraph (b), for “incorporated practices” substitute “authorised legal businesses”,
(d)in sub-paragraph (4), for “incorporated practice” substitute “authorised legal business”,
(e)in sub-paragraph (5), for “incorporated practice” substitute “authorised legal business”,
(f)in sub-paragraph (8), for “incorporated practice” substitute “authorised legal business”.
(3)In paragraph 3, in sub-paragraph (2)—
(a)for “incorporated practices” substitute “authorised legal businesses”,
(b)for “incorporated practice or practices” substitute “authorised legal business or businesses”.
(4)In paragraph 4, in sub-paragraph (2), for “incorporated practice” substitute “authorised legal business”.
24(1)Part 2 of schedule 3 of the 1980 Act (powers of Council to investigate) is amended as follows.
(2)In paragraph 5, sub-paragraph (2), for “incorporated practice” substitute “authorised legal business”.
25(1)Section 44 of the 1980 Act (professional indemnity) is amended as follows.
(2)In subsection (1), for “incorporated practices” in both places it occurs substitute “authorised legal businesses”.
(3)In subsection (3)—
(a)in paragraph (b), for “incorporated practices or any class of incorporated practices” substitute “authorised legal businesses or any type of authorised legal business”,
(b)in paragraph (c), for “incorporated practices or any class of incorporated practices” substitute “authorised legal businesses or any type of authorised legal business”,
(c)in paragraph (f), for “incorporated practice” substitute “authorised legal business”,
(d)in paragraph (g), for “incorporated practices” substitute “authorised legal businesses”.
(4)In subsection (5), in the definition of “professional liability”, for “incorporated practices” substitute “authorised legal businesses”.
26(1)The 1980 Act is amended as follows.
(2)After section 45 (safeguarding interests of clients of solicitor struck off or suspended) insert—
(1)This section has effect in relation to any authorised legal business whose authorisation to provide legal services is suspended or withdrawn (such business being referred to in this section as a “former authorised legal business”).
(2)The right to operate on or otherwise deal with any client account in the name of the former authorised legal business vests in the Society (notwithstanding any enactment or rule of law to the contrary) to the exclusion of any other person and is exercisable from the date of suspension or withdrawal of the relevant authorisation (as applicable).
(3)Any sum of money held by or in the name of the former authorised legal business on behalf of, or in relation to—
(a)the clients of the former authorised legal business, or
(b)any trust of the kind mentioned in subsection (5)(b),
vests in the Society (notwithstanding any enactment or rule of law to the contrary) to the exclusion of any other person with effect from the date of suspension or withdrawal of the relevant authorisation (as applicable).
(4)The Council may direct any former authorised legal business or any other person to take any specified action (or to refrain from doing something) if the Council considers that to be necessary or expedient for safeguarding the interests of the clients of the former authorised legal business.
(5)Directions given under subsection (4) may in particular (but without prejudice to the generality of subsection (4)) require the former authorised legal business or any other person to make available to a relevant person or body any document or information (of whatever kind) held or previously held in the possession or control of the former authorised legal business which—
(a)relates to, or is held on behalf of, a client of the former authorised legal business, or
(b)relates to any trust of which the former authorised legal business (or any of its members, owners, partners or directors or any entity owned by the former authorised legal business or its members, owners, partners or directors (or any of them) for the purposes of being a trustee) is sole trustee or co-trustee only with one or more of the members, owners, partners, directors or employees of the former authorised legal business.
(6)For the purposes of subsection (5), a relevant person or body is—
(a)the particular client,
(b)the Society,
(c)an authorised legal business or licensed legal services provider that is instructed by the particular client, the former authorised legal business or the Council to act in place of the former authorised legal business.
(7)The former authorised legal business or other person to whom a direction is given under subsection (4) may appeal to the Court against the direction within 14 days beginning with the day of being notified of the direction.
(8)On an appeal under subsection (7)—
(a)the Court may—
(i)vary the direction,
(ii)impose such conditions in relation to the direction as it considers appropriate in all the circumstances, or
(iii)revoke the direction,
(b)the Court’s decision is final.
(9)The Court may, on application by the Council, make an order—
(a)requiring the former authorised legal business or any other person to comply with a direction given under subsection (4),
(b)varying the direction or imposing such conditions as the Court considers appropriate in all the circumstances,
(c)providing that, without the leave of the Court, no payment may be made by any bank, building society or other body named in the order out of any account (or any sum otherwise deposited) in the name of the former authorised legal business,
(d)providing otherwise as it may see fit.
(10)Before making an order under subsection (9), the Court must—
(a)except where the Court considers it an appropriate course of action in all the circumstances of the case to dispense with this requirement, give the former authorised legal business and any other person with an interest an opportunity to be heard,
(b)be satisfied that the order represents an appropriate course of action in all the circumstances of the case.
(11)Part II of Schedule 3 has effect in relation to the powers of the Council under this section.”.
(3)After section 46 (safeguarding interests of clients in certain other cases) insert—
(1)This section applies in relation to an authorised legal business comprised of a sole solicitor who—
(a)has died,
(b)is incapacitated by illness or accident to such an extent as to be unable to operate and manage the relevant authorised legal business,
(c)is disqualified from operating or managing the relevant authorised legal business (whether as a result of the suspension or withdrawal of the practising certificate of the sole solicitor or the imposition of conditions on that certificate or otherwise), or
(d)has ceased to practise for any other reason.
(2)The right to operate on or otherwise deal with any client account in the name of the solicitor or the relevant authorised legal business vests in the Society (notwithstanding any enactment or rule of law to the contrary) to the exclusion of any personal representatives of the solicitor or any other person, and is exercisable from the date of the death, incapacity or disqualification of the solicitor.
(3)Any sum of money held by, or in the name of, the solicitor or the relevant authorised legal business on behalf of, or in relation to—
(a)the clients of the solicitor or the relevant authorised legal business, or
(b)any trust of the kind mentioned in subsection (4)(b),
vests in the Society (notwithstanding any enactment or rule of law to the contrary) to the exclusion of any personal representatives of the solicitor or any other person with effect from the date of the death, incapacity or disqualification of the solicitor (as applicable).
(4)The Council may issue a direction requiring that any document or information (of whatever kind) held or previously held in the possession or control of the solicitor or relevant authorised legal business which—
(a)relates to, or is held on behalf of, a client of the solicitor or relevant authorised legal business, or
(b)relates to any trust of which the solicitor or relevant authorised legal business or any entity owned by the solicitor or relevant authorised legal business formed for the purposes of being a trustee is sole trustee or co-trustee only with one or more of its employees is made available to—
(i)the particular client,
(ii)the Society,
(iii)an authorised legal business or licensed legal services provider that is instructed by the particular client or the Council to act in place of the solicitor or the relevant authorised legal business.
(5)The Court may, on an application by the Council, make an order—
(a)requiring any party with possession or control of the relevant document or information to comply with a direction given under subsection (4) within such time as the Court may order,
(b)varying the direction or imposing such conditions as the Court considers appropriate in all the circumstances,
(c)providing that, without the leave of the Court, no payment may be made by any bank, building society or other body named in the order out of any account (or any sum otherwise deposited) in the name of the solicitor or the relevant authorised legal business,
(d)providing otherwise as it may see fit.
(6)Before making an order under subsection (5), the Court must—
(a)except where the Court considers it an appropriate course of action in all the circumstances of the case to dispense with this requirement, give any person with an interest an opportunity to be heard,
(b)be satisfied that the order represents an appropriate course of action in all the circumstances of the case.
(7)Part II of Schedule 3 has effect in relation to the powers of the Council under this section.
(8)In this section, an authorised legal business is “comprised of a sole solicitor” if it—
(a)consists of a solicitor practising under the solicitor’s own name or as a single solicitor under a firm or business name, or
(b)is wholly owned by a single solicitor.
(9)For the purpose of subsection (8)(b), an authorised legal business may be wholly owned by a single solicitor—
(a)directly or through one or more other bodies,
(b)partly directly and partly through one or more other bodies.”.
(4)Sections 45 (safeguarding interests of clients of solicitor struck off or suspended) and 46 (safeguarding interests of clients in certain other cases) are repealed.
(5)In schedule 3, in paragraph 5—
(a)in sub-paragraph (1)—
(i)for “45 or 46” substitute “45A or 46A”,
(ii)for “required” where it first occurs substitute “directed”,
(b)in sub-paragraph (2) for “45 or 46” substitute “45A or 46A”,
(c)sub-paragraph (3) is repealed.
27(1)In section 62A of the 1980 Act (Council’s power to recover expenses incurred under section 45 or 46)—
(a)in subsection (1)—
(i)the words “Without prejudice to the Society’s entitlement under section 46(4) to recover expenses” are repealed,
(ii)after the word “solicitor” insert “(or from the estate of a solicitor who has died)”,
(iii)for “45, or 46”, substitute “45A or 46A (including, but not limited to, giving directions under section 45A(4) or 46A(4)”,
(b)subsection (2) is repealed,
(c)after subsection (2) insert—
“(3)The Court, on the application of the Council, may order a current or former partner, owner, director or member (as the case may be) of a solicitor or an authorised legal business in respect of whom the Council has taken any action under sections 45A or 46A (including, but not limited to, making directions under section 45A(4) or 46A(4)) to pay a specified proportion of the expenditure mentioned in subsection (1).
(4)The Court may make an order under subsection (3) only if it is satisfied that the conduct (or any part of the conduct) by reason of which the powers conferred by sections 45A or 46A were exercisable in relation to the solicitor or authorised legal business was conduct carried on with the consent or connivance of, or was attributable to any neglect on the part of, the current or former partner, owner, director or member.
(5)In subsection (3), “specified” means specified in the order made by the Court.”.
(2)In section 70 of the 2010 Act (safeguarding clients)—
(a)after subsection (2) insert—
“(2A)The right to operate on or otherwise deal with any client account in the name of the licensed provider vests in the approved regulator (notwithstanding any enactment or rule of law to the contrary) to the exclusion of any other person and is exercisable from the date of suspension or revocation of the licensed provider’s licence (as applicable).
(2B)Any sum of money held by, or in the name of, the licensed provider on behalf of, or in relation to the clients of the licensed provider, or any trust of the kind mentioned in subsection (4)(a)(ii), vests in the approved regulator (notwithstanding any enactment or rule of law to the contrary) to the exclusion of any other person with effect from the date of the suspension or revocation of the licensed provider’s licence (as applicable).”.
(b)in subsection (4)—
(i)in paragraph (a)(ii), after the words “within it” insert “or any entity owned by the licensed provider or any of its investors or directors formed for the purposes of being a trustee”,
(ii)paragraph (b) is repealed,
(c)in subsection (6), after paragraph (c) insert—
“(d)providing otherwise as it may see fit.”,
(d)in subsection (7), in paragraph (a), at the beginning insert “except where the Court considers it an appropriate course of action in all the circumstances of the case to dispense with this requirement,”,
(e)after subsection (8) insert—
“(8A)The Court, on the application of the approved regulator, may order a responsible official of a licensed provider in respect of whom it has taken any action under this section to pay a specified proportion of the expenditure mentioned in subsection (8).
(8B)The Court may make an order under subsection (8A) only if it is satisfied that the conduct (or any part of the conduct) by reason of which the powers conferred by this section are exercisable in relation to the licensed provider was conduct carried on with the consent or connivance of, or was attributable to any neglect on the part of, the responsible official.
(8C)In subsections (8A) and (8B)—
“a responsible official” is—
a current or former investor in the licensed provider,
in the case of a licensed provider that is a company, a current or former director or other similar officer,
in the case of a licensed provider that is a limited liability partnership, a current or former member,
in the case of a licensed provider that is a partnership, a current or former partner,
in the case of a licensed provider that is another body or association, a person who is or was concerned in the management or control of its affairs,
but in each case also extends to a person purporting to act in such a capacity,
“specified” means specified in the order made by the Court.”.
28(1)Section 47 of the 1980 Act (restriction on employing solicitor struck off or suspended) is amended as follows.
(2)For subsection (1) substitute—
“(1)An authorised legal business must not, without the prior written permission of the Council, employ or remunerate a person (“A”) in connection with the authorised legal business’s practice at a time when A is disqualified from practising as a solicitor by reason of A being struck off the roll or suspended from practice as a solicitor.”.
(3)In subsection (3), for “A solicitor or, as the case may be, incorporated practice” substitute “An authorised legal business”.
(4)For subsection (4) substitute—
“(4)If an authorised legal business contravenes this section or a condition attached to the grant of permission under this section, the Tribunal or, in the case of an appeal, the Court may impose conditions or restrictions in relation to the authorised legal business’s authorisation to provide legal services.”.
29(1)Section 51 of the 1980 Act (complaints to Tribunal) is amended as follows.
(2)In subsection (2), for “incorporated practice” substitute “authorised legal business”.
(3)In subsection (4), after “solicitor” where it third occurs insert “or authorised legal business”.
30(1)Section 52 of the 1980 Act (procedure on complaints and appeals to Tribunal) is amended as follows.
(2)In subsection (1), for “incorporated practice” substitute “authorised legal business”.
31(1)Section 53 of the 1980 Act (powers of Tribunal) is amended as follows.
(2)In subsection (1)—
(a)for paragraph (c) substitute—
“(c)an authorised legal business has been convicted by a court of an offence, which conviction the Tribunal is satisfied renders it unsuitable to continue—
(i)in a case where the business is an incorporated practice, to be recognised under section 34(1A), or
(ii)in any case, to be authorised to provide legal services, or”,
(b)in paragraph (d), for “incorporated practice” substitute “authorised legal business”.
(3)In subsection (2)—
(a)in paragraph (c), for “incorporated practice” substitute “authorised legal business”,
(b)in paragraph (d), for “incorporated practice” substitute “authorised legal business”,
(c)the “or” immediately after paragraph (f) is repealed,
(d)after paragraph (f), insert—
“(fa)order that the authorisation of a legal business to provide legal services be withdrawn, or”.
(4)In subsection (3A), in paragraph (b)—
(a)for “incorporated practice” where it first occurs substitute “authorised legal business”,
(b)after “34(1A)” insert “or had its authorisation to provide legal services withdrawn”.
(5)After subsection (5), insert—
“(5A)Where the Tribunal have exercised the power conferred by subsection (2) to censure, or impose a fine on, an authorised legal business, or to both censure and impose a fine—
(a)the Tribunal may order that the business’s authorisation is to be subject to such conditions as the Tribunal may direct, and
(b)the Council must give effect to such an order.”.
(6)After subsection (6A), insert—
“(6AA)Where the Tribunal order that the authorisation of a legal business to provide legal services be withdrawn, the Tribunal must direct that the order is to take effect on such date as the Tribunal specifies, being a date not earlier than 60 days after its order is intimated to the authorised legal business, and such an order is to take effect accordingly.”.
(7)In subsection (7), after “(6A)” in both places it occurs insert “, (6AA)”.
32(1)Section 54 of the 1980 Act (appeals from decisions of Tribunal) is amended as follows.
(2)In subsection (1A), for “incorporated practice” substitute “authorised legal business”.
(3)In subsection (1B), in paragraph (b), for “incorporated practice” substitute “authorised legal business”.
(4)In subsection (2), after paragraph (b) insert—
“(ba)the Tribunal has ordered that the authorisation of a legal business to provide legal services be withdrawn, the authorised legal business may within 21 days of the date when the order is intimated to it apply to the court for an order varying (subject to the limit of 60 days referred to in subsection (6AA) of section 53) the direction under that subsection,”.
33(1)Part 2 of schedule 4 of the 1980 Act (procedure and powers of Tribunal) is amended as follows.
(2)In paragraph 9, for “incorporated practice” in each place it occurs substitute “authorised legal business”.
(3)In paragraph 10, for “incorporated practice” substitute “authorised legal business”.
(4)In paragraph 16—
(a)in paragraph (c), for “incorporated practice” substitute “authorised legal business”,
(b)in paragraph (d), for “incorporated practice” substitute “authorised legal business”,
(c)after paragraph (e), insert—
“(ea)ordering that the authorisation of a legal business to provide legal services be withdrawn or subject to conditions, or”,
(d)in the closing words, after “53(6A)” insert “or (6AA)”.
(5)In paragraph 23, in paragraph (cb)(ii), for “, the firm of solicitors or, as the case may be, the incorporated practice” substitute “or the authorised legal business”.
(6)In paragraph 25, for “, the firm of solicitors or, as the case may be, the incorporated practice,” substitute “or the authorised legal business,”.
34(1)Section 61 of the 1980 Act (protection of banks) is amended as follows.
(2)In subsection (1), for “incorporated practice” substitute “authorised legal business”.
(3)In subsection (2), for “incorporated practice” substitute “authorised legal business”.
(4)In subsection (3), for “incorporated practice” in both places it occurs substitute “authorised legal business”.
35(1)Section 62A of the 1980 Act (Council’s power to recover expenses incurred under section 45 or 46) is amended as follows.
(2)In subsection (1), for “incorporated practice” substitute “authorised legal business”.
36(1)Section 64 of the 1980 Act (service of notices etc.) is amended as follows.
(2)For “incorporated practice” substitute “authorised legal business”.
(3)After “office” insert “or last intimated address”.
37(1)Section 65 of the 1980 Act (interpretation) is amended as follows.
(2)In subsection (1), after the definition of “anti-money laundering fee” insert—
““authorised legal business” is a legal business within the meaning of section 39 of the Regulation of Legal Services (Scotland) Act 2025 that is authorised to provide legal services by the Society (in its capacity as a category 1 regulator) in accordance with its authorisation rules made in pursuance of section 42 of that Act (and “authorised”, in relation to a legal business, is to be construed accordingly).”.
38(1)Schedule 1 of the 1980 Act (the Law Society of Scotland) is amended as follows.
(2)In paragraph 6, for “paragraph” substitute “paragraphs 6B(2) and”.
(3)After paragraph 6A, insert—
“6B(1)The Society may, in accordance with its authorisation rules made in pursuance of section 42(1)(e) of the Regulation of Legal Services (Scotland) Act 2025 charge an annual fee in relation to the authorisation of legal businesses (and may charge different fees based on such criteria (such as the size or financial performance of the business) as the rules may specify).
(2)For the purposes of paragraph 6, the Society in general meeting—
(a)is to take into account the amount of any annual authorisation fee payable under sub-paragraph (1) when fixing subscriptions under paragraph 6, and
(b)in so doing, may elect to fix a subscription of £0 for members (or categories of member) if it considers the annual authorisation fees payable under sub-paragraph (1) sufficient.”.
(4)In paragraph 7A, the words from “a” to the end become paragraph (a) and after that paragraph insert “, or
(b)a special charge on all authorised legal businesses of such amount and payable at such time and for such specified purpose as it may determine.”.
(5)In paragraph 7B, after “member” in both places it occurs insert “or type of authorised legal business”.
(6)In paragraph 8, after “subscriptions” insert “, annual authorisation fees”.