Safeguarding interests of clients
260.Paragraph 26 inserts new sections 45A and 46A into the 1980 Act. Those sections have effect where an authorised legal business whose authorisation to provide legal services is suspended or withdrawn (referred to in the Act as a “former authorised legal business”), or, in the case of an authorised legal business which is effectively a sole solicitor, on the death, incapacity or disqualification of that solicitor. The new sections vest any client funds in the Law Society alone (together with the right to deal with and operate on any client account) and the Society would be able to issue directions setting out how other client assets (files and documents, for example) are to be dealt with. The Council may direct any former authorised legal business to take (or stop taking) any specified action considered necessary or expedient for safeguarding the interests of the clients of the former authorised legal business. The former authorised legal business may appeal to the court against such a direction.
261.Under new section 45A(9), the Court can make an order requiring the former authorised legal business to comply with a direction under subsection (4). It may also vary a direction, or prevent payments being made out of any account in the name of the former authorised legal business (unless the Court gives leave for the payment to be made) or make any other order it sees fit. The Court also has equivalent powers under new section 46A(5).
