Part 2

Regulation of legal businesses

Requirement to be authorised to provide legal services

Requirement for legal businesses to be authorised to provide legal services
39
1
A legal business may provide legal services to the public for fee, gain or reward only if it is authorised to do so by the category 1 regulator that is responsible for the regulation of the owners of the legal business.
2
For the purposes of this Part, a legal business is a business which provides (or offers to provide) legal services to the public for fee, gain or reward that—
a
consists of—
i
a solicitor, or
ii
a qualifying individual, or
b
is wholly owned by—
i
a solicitor or solicitors,
ii
a qualifying individual or individuals, or
iii
a solicitor (or solicitors) and a qualifying individual (or individuals).
3
For the purpose of subsection (2)(b), a business may be wholly owned—
a
directly or through one or more other bodies,
b
partly directly and partly through one or more other bodies.
4
A category 1 regulator is responsible for the regulation of the owner of a legal business if the owner is a member of the regulator or is otherwise subject to its regulation in respect of the legal services the owner provides.
5
It is an offence for a person to own or operate a legal business which provides legal services to the public for fee, gain or reward without that business being authorised in accordance with this Part.
6
A person who commits an offence under this section is liable on summary conviction to a fine not exceeding £20,000.
7
The Scottish Ministers may by regulations amend subsection (6) to substitute a different amount of fine for the one for the time being specified there.
8
Before making regulations under subsection (7), the Scottish Ministers 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, and
iii
such other person or body as the Scottish Ministers consider appropriate, and
b
publish copies of any written representations received in response to the consultation in such manner as they consider appropriate (having regard to the desirability of the documents being accessible to those likely to have an interest in them).
9
Regulations under subsection (7) are subject to the negative procedure.
10
For the purpose of this section, a “qualifying individual” means an individual, other than a solicitor, whose provision of legal services is regulated by a category 1 regulator.
11
Subsection (12) applies to a legal business—
a
that intends to provide (or offer to provide) legal services to the public for fee gain or reward, and
b
which was immediately before the coming into force of this section—
i
a sole solicitor within the meaning given by section 45(5) of the 1980 Act,
ii
a firm of solicitors within the meaning of that Act,
iii
an incorporated practice within the meaning given by section 34(1A)(c) of that Act, or
iv
a multi-national practice within the meaning given by section 65(1) of that Act.
12
On the coming into force of this section, a legal business to which this subsection applies is to be treated as authorised in accordance with this Part by the Law Society to provide legal services to the public for fee, gain or reward.
13
But the effect of subsection (12) is subject to any alternative provision made by rules approved under section 41.
14
In this Part—
a
a reference to an authorised legal business of a category 1 regulator is a reference to a legal business that is authorised to provide legal services by the relevant regulator,
b
a reference to the relevant category 1 regulator, in relation to an authorised legal business, is a reference to the category 1 regulator which authorises the legal business.
S. 39 not in force at Royal Assent, see s. 103(3)