Regulation of Legal Services (Scotland) Act 2025

Safeguarding interests of clients

26 (1) The 1980 Act is amended as follows.

(2) After section 45 (safeguarding interests of clients of solicitor struck off or suspended) insert—

“45A Safeguarding interests of clients of an authorised legal business where authorisation suspended or withdrawn

(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has effect in relation to any authorised legal business whose authorisation to provide legal services is suspended or withdrawn (such business being referred to in this section as a “former authorised legal business”).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—

“46A Safeguarding interests of clients in certain other cases

(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.