Regulation of Legal Services (Scotland) Act 2025

Part 1 Category 1 regulator

Exercise of regulatory functions

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(3) Subsection (2) is repealed.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(a) in the opening words “Accordingly” is repealed,

(b) paragraph (b) and the “or” immediately preceding it are repealed.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.”.

3 The following sections of the 1980 Act are repealed—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”.

Client Protection Fund

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—

“43A Client Protection Fund: further provision

(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.

8 In 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”.