Administration of Justice Act 1985

Compensation Fund

6 (1) On an application for recognition under section 9 of this Act a body corporate—

(a) shall pay to the Society with any fee required to be paid by virtue of subsection (2)(a) of that section a contribution to the Compensation Fund of such amount as the Council may from time to time determine ; and

(b) where it appears from the application that the body has held or received clients' money at any time during a particular period specified in the application, shall also, if so required by the Society, pay to the Society a further contribution to that fund of such amount as the Council may from time to time determine ;

and Schedule 2 to the 1974 Act shall apply to amounts paid to the Society in pursuance of paragraph (a) or (b) of this sub-paragraph as if they were annual contributions or special levies paid in pursuance of paragraph (a) or (b) of paragraph 2(1) of that Schedule.

(2) Where the Council are satisfied—

(a) that a person has suffered or is likely to suffer loss in consequence of dishonesty on the part of an officer or employee of a recognised body in connection with that body's business (or purported business) as a recognised body or in connection with any trust of which it is or formerly was a trustee ; or

(b) that a person has suffered or is likely to suffer hardship in consequence of failure on the part of a recognised body to account for money which has come into its possession in connection with that body's business (or purported business) as a recognised body or in connection with any trust of which it is or formerly was a trustee ; or

(c) that a member of a recognised body has suffered or is likely to suffer loss or hardship by reason of his liability to any of that body's clients in consequence of some act or default of any officer or employee of that body in circumstances where, but for the liability of that member, a grant might have been made out of the Compensation Fund to some other person,

the Council may make a grant out of the Compensation Fund for the purpose of relieving that loss or hardship.

(3) Subsections (3) to (7) of section 36 of the 1974 Act shall apply in relation to grants under sub-paragraph (2) as they apply in relation to grants under subsection (2) of that section ; and accordingly the reference in subsection (3) of that section to a grant under subsection (2)(c) shall be construed as including a reference to a grant under sub-paragraph (2)(c).