other services (in addition to legal services) that form part of the professional practice of solicitors, or qualifying individuals, within a legal business,

(b)

make different provision for different cases or types of case.

(4)

A category 1 regulator may not amend its ALB rules (or any of them) without the prior approval of the Lord President.

(5)

In making any material amendment of its ALB rules, a category 1 regulator must consult—

(a)

its members,

(b)

the Competition and Markets Authority,

(c)

the Commission,

(d)

the independent advisory panel of the Commission,

(e)

Consumer Scotland, and

(f)

such other persons or bodies it considers appropriate.

(6)

A category 1 regulator, in submitting an amendment of its ALB rules for approval under subsection (4), must submit copies of any written representations received in response to the consultation under subsection (5).

(7)

The Scottish Ministers may exercise the power to make regulations under subsection (2)(c) only if they have received a request to exercise the power from—

(a)

the Lord President,

(b)

the regulatory committee of a category 1 regulator,

(c)

a category 1 regulator that has no functions other than regulatory functions, or

(d)

the independent advisory panel of the Commission.

(8)

Before making a request under subsection (7), the person making the request (“the requester”) 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,

(iii)

the independent advisory panel of the Commission, and

(iv)

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.

(9)

But a body mentioned in subsection (8)(a)(i) to (iii) does not need to be consulted if the body is the requester.

(10)

For the purpose of seeking the Lord President’s agreement under subsection (8)(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,

(b)

copies of any written representations received in response to the consultation under subsection (8)(a).

(11)

A request under subsection (7) 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 (8)(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.

(12)

As soon as reasonably practicable after making a request under subsection (7), 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).

(13)

In subsection (3)(a), a “qualifying individual” has the meaning given in section 39(10).

(14)

Regulations under subsection (2)(c) are subject to the affirmative procedure.

42Authorisation rules

(1)

For the purposes of this Part, the authorisation rules are rules about—

(a)

the procedure for becoming an authorised legal business, including (in particular)—

(i)

the making of applications,

(ii)

the criteria to be met by applicants,

(iii)

the determination of applications,

(iv)

the grant of authorisation,

(b)

the terms on which authorisation is granted including, in particular, the imposition of conditions or restrictions,

(c)

the circumstances in which conditions or restrictions may be imposed, varied or revoked in relation to the existing authorisation of a legal business,

(d)

the—

(i)

circumstances in which a legal business’s authorisation may or must be reviewed, suspended or withdrawn,

(ii)

circumstances in which an authorised legal business may surrender its authorisation,

(e)

the fees that are (or may be) chargeable by the regulator in connection with authorisation.

(2)

Rules made in pursuance of subsection (1)(a) to (d) must allow for review by the category 1 regulator of any decision made by it under the rules that materially affects an applicant for authorisation or (as the case may be) an authorised legal business.

(3)

Authorisation rules must—

(a)

state that an application for authorisation may be refused on the ground that the applicant appears to be incapable (for any reason) of complying with the regulatory scheme of the regulator,

(b)

provide for how a licensed provider may become an authorised legal business,

(c)

provide for grounds for suspension or withdrawal of authorisation where the legal business is breaching (or has breached) the regulatory scheme of the regulator or other rules of professional practice that apply to it,

(d)

set out how the fees that are chargeable in connection with authorisation are determined (which may be by reference to the financial performance of an authorised legal business or such other criteria as may be specified in the rules).

(4)

Authorisation rules may make provision about the effect on an authorisation (including a deemed authorisation under section 39(12) issued to a legal business which is a partnership or other unincorporated body of any change in the membership of the legal business.

(5)

Provision which may be made under subsection (4) includes provision for the authorisation of the legal business to be transferred where the legal business ceases to exist and another legal business succeeds to the whole or substantially the whole of its business.

(6)

Authorisation rules may include such further rules or arrangements as to authorising legal businesses for which provision is (in the category 1 regulator’s opinion) necessary or expedient.

43Appeals in relation to authorisation decisions

(1)

An appeal against a relevant authorisation decision may be made to the sheriff by—

(a)

an applicant for authorisation under rules made in pursuance of section 42, or

(b)

an authorised legal business.

(2)

An appeal under subsection (1) must be made within the period of 3 months beginning with the later of—

(a)

the day on which the relevant authorisation decision is intimated to the applicant or, as the case may be, authorised legal business, or

(b)

where the relevant authorisation decision has been the subject of an internal appeal process of the category 1 regulator, the day on which the decision of the internal appeal is intimated to the applicant or, as the case may be, the authorised legal business.

(3)

A relevant authorisation decision is a decision taken under authorisation rules made in pursuance of this Part to—

(a)

refuse an application for authorisation of a legal business,

(b)

impose, vary or revoke conditions or restrictions in relation to its authorisation, or

(c)

suspend or withdraw its authorisation.

(4)

In the appeal, the sheriff may—

(a)

uphold, vary or quash the decision,

(b)

make such further order (including for the expenses of the parties) as is necessary in the interests of justice.

(5)

The sheriff’s determination in the appeal is final.

44Practice rules

(1)

For the purposes of this Part, the practice rules are rules about—

(a)

the—

(i)

operation and administration of authorised legal businesses,

(ii)

standards to be met by authorised legal businesses,

(b)

the operational positions within authorised legal businesses,

(c)

accounting and auditing,

(d)

professional indemnity,

(e)

the making and handling of any complaint about an authorised legal business,

(f)

the measures that may be taken by the regulator, in relation to an authorised legal business, if—

(i)

there is a breach of the regulatory scheme of the regulator, or

(ii)

a complaint referred to in paragraph (e) is upheld.

(2)

Without limit to the generality of subsection (1), practice rules must—

(a)

require authorised legal businesses to—

(i)

comply with the regulator’s ALB rules and the terms on which authorisation is granted including, in particular, any conditions or restrictions which have been imposed in relation to the authorisation,

(ii)

adhere to the professional principles,

(iii)

have proper accounting and auditing procedures,

(iv)

have sufficient arrangements for professional indemnity, and

(v)

co-operate with reviews of, and investigations into, their performance,

(b)

include provision that it is a breach of the ALB rules for an authorised legal business to fail to comply with—

(i)

its duties under this Part, and

(ii)

duties under any other enactment specified in the scheme, and

(c)

allow an authorised legal business to make representations to the regulator before the regulator takes any of the measures available to it under the rules.

(3)

Practice rules may include such further arrangements as to the professional practice, conduct or discipline of authorised legal businesses for which provision is (in the regulator’s opinion) necessary or expedient.

45Financial sanctions

(1)

Practice rules made in pursuance of section 44(1)(f) may provide for—

(a)

the imposition of a financial penalty,

(b)

the withdrawal of the imposition of a financial penalty if the regulator considers that it would not be reasonable to seek (or to continue to seek) payment of the financial penalty.

(2)

The Scottish Ministers may by regulations specify the maximum amount of a financial penalty that may be imposed by virtue of subsection (1).

(3)

A financial penalty imposed by virtue of this section is payable to the Scottish Ministers (but the regulator may collect it on their behalf).

(4)

Where a regulator collects a financial penalty imposed on an authorised legal business under subsection (3), the regulator may—

(a)

retain a sum to be deducted from the amount payable to the Scottish Ministers under subsection (3) in respect of any expenditure reasonably incurred by the regulator in collecting the penalty, or

(b)

recover from the authorised legal business any expenditure reasonably incurred by the regulator in collecting the penalty.

(5)

At any time a regulator may discontinue collection of a financial penalty imposed by virtue of this section where the regulator considers it would not be reasonable in the circumstances for the regulator to attempt or continue to attempt collection.

(6)

Subsection (5) does not prevent the regulator from, in circumstances where it has discontinued attempts to collect a financial penalty, resuming such attempts where the regulator considers it is reasonable in the circumstances to do so.

(7)

An authorised legal business may appeal against a financial penalty (or the amount of a financial penalty) imposed on it by virtue of this section—

(a)

to the sheriff,

(b)

within the period of 3 months beginning with the date on which the penalty is intimated to it.

(8)

Where an appeal is made under subsection (7), no part of the penalty requires to be paid before the appeal is determined or withdrawn.

(9)

In the appeal, the sheriff may—

(a)

uphold, vary or quash the decision,

(b)

make such further order (including for the expenses of the parties) as is necessary in the interests of justice.

(10)

The sheriff’s determination in the appeal is final.

(11)

Before making regulations under subsection (2), 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).

(12)

Regulations under subsection (2)—

(a)

are subject to the negative procedure, and

(b)

may not be made without the agreement of the Lord President.

46Reconciling different rules

(1)

The provision required by section 41(2)(b) to be in the ALB rules is such provision as is reasonably practicable (and appropriate in the circumstances) for—

(a)

preventing or resolving regulatory conflicts, and

(b)

avoiding unnecessary duplication of regulatory rules (for example, by applying existing regulatory rules in so far as possible).

(2)

For the purposes of this section, a regulatory conflict is a conflict between (any of)—

(a)

the ALB rules of a category 1 regulator,

(b)

any other professional or regulatory rules made by the regulator in respect of the persons who provide legal services that it regulates, and

(c)

any professional or regulatory rules made by any other body which regulates the provision of legal or other services by the persons regulated by the category 1 regulator.

(3)

The Scottish Ministers may by regulations make further provision about regulatory conflicts (such as may involve a category 1 regulator).

(4)

The Scottish Ministers may exercise the power to make regulations under subsection (3) only if they have received a request from—

(a)

the Lord President,

(b)

the regulatory committee of a category 1 regulator,

(c)

a category 1 regulator that has no functions other than regulatory functions, or

(d)

the independent advisory panel of the Commission.

(5)

Before making a request under subsection (4), the person making the request (“the requester”) 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,

(iii)

the independent advisory panel of the Commission, and

(iv)

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.

(6)

But a body mentioned in subsection (5)(a)(i) to (iii) does not need to be consulted if the body is the requester.

(7)

For the purpose of seeking the Lord President’s agreement under subsection (5)(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,

(b)

copies of any written representations received in response to the consultation under subsection (5)(a).

(8)

A request under subsection (4) 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 (5)(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.

(9)

As soon as reasonably practicable after making a request under subsection (4), 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).

(10)

Regulations under subsection (3) are subject to the negative procedure.

47Monitoring of performance of authorised legal businesses

(1)

A category 1 regulator is to carry out a review of the performance of an authorised legal business—

(a)

at such time or in such circumstances as the regulator considers appropriate, or

(b)

when requested to do so by the Lord President.

(2)

A review under this section may (in particular) examine—

(a)

the authorised legal business’s compliance with—

(i)

its duties under this Act and any other enactment,

(ii)

the terms on which its authorisation is granted including any conditions or restrictions imposed in relation to the authorisation,

(b)

the financial sustainability of the business,

(c)

such other matters as the regulator considers appropriate.

(3)

A request for the review of an authorised legal business under subsection (1)(b) must—

(a)

set out, by reference to the matters that may be reviewed, why the Lord President considers a review appropriate, and

(b)

be copied to the authorised legal business which is to be reviewed.

(4)

When conducting a review of an authorised legal business, a category 1 regulator may—

(a)

require the business to produce any relevant document or other information (either at the business’s premises or otherwise),

(b)

interview any person who owns, is employed by, or is otherwise involved with the business.

(5)

Following a review, the category 1 regulator must—

(a)

prepare a report on its review, and

(b)

send a copy of its report to—

(i)

the authorised legal business, and

(ii)

if the review was requested under subsection (1)(b), the Lord President.

(6)

Before finalising the report, the category 1 regulator must—

(a)

send a draft of the report to the authorised legal business, and

(b)

give it a reasonable opportunity to make representations about—

(i)

the findings of the report, and

(ii)

any action the business may be required to take or steps that may be taken by the regulator as a result of the review.