Revised legislation carried on this site may not be fully up to date. At the current time any known changes or effects made by subsequent legislation have been applied to the text of the legislation you are viewing by the editorial team. Please see ‘Frequently Asked Questions’ for details regarding the timescales for which new effects are identified and recorded on this site.

Part 1Regulatory framework

Chapter 1Objectives, principles and key definitions

Overview of Part

1Overview of the regulatory framework

(1)

Chapter 1 makes provision in respect of—

(a)

the objectives of regulating legal services and how they are to be applied (see sections 2 and 3),

(b)

the professional principles (see section 4),

(c)

defining key expressions for the purposes of this Act (see sections 5 and 6).

(2)

Chapter 2 makes provision in respect of regulators of legal services, which includes—

(a)

establishing two categories of regulator and assigning the existing regulators to one of those categories (see section 7),

(b)

setting the requirements for a category 1 regulator, which include—

(i)

having an independent regulatory committee (where necessary) which is responsible for exercising its regulatory functions (see sections 8 to 11),

(ii)

preparing an annual report (see section 12),

(iii)

having a compensation fund (see section 13),

(c)

setting the requirements for a category 2 regulator, which include—

(i)

exercising its regulatory functions independently of any other functions it has and properly in all respects (see section 14),

(ii)

preparing an annual report (see section 15),

(d)

requiring both category 1 and category 2 regulators to—

(i)

maintain a publicly available register of the legal services providers that it regulates (see section 16), and

(ii)

have rules in respect of professional indemnity insurance (see section 17),

(e)

setting out the role and powers of the Lord President in respect of regulators and the regulatory framework (see sections 18 and 19 and schedule 2),

(f)

conferring power on regulators to make special rule changes in relation to a particular legal services provider where it is appropriate to do so (see sections 20 to 22).

(3)

Paragraph 40 of schedule 3 provides for category 1 regulators to be subject to the Freedom of Information (Scotland) Act 2002 in respect of the exercise of their regulatory functions.

(4)

Chapter 3 makes provision about the process for a body to become accredited to authorise persons and acquire and exercise rights to provide legal services, which includes—

(a)

applications and the application process (see sections 23 and 26),

(b)

requiring the applicant to produce a draft regulatory scheme, which must meet certain requirements (see section 24),

(c)

the manner in which applications are to be considered and approved (see sections 27 and 28),

(d)

how any rights acquired by persons authorised by the accredited regulator are to be exercised (see section 29),

(e)

how the rights may be surrendered or revoked (and what happens to the providers affected) (see sections 30, 34 and 35),

(f)

the review of regulatory schemes (see sections 32 and 33).

(5)

Part 1 of schedule 1 makes amendments to enactments relating to the Law Society in consequence of the Society being a category 1 regulator and Part 1 of schedule 3 makes other consequential amendments relating to the Society.

Regulatory objectives

2Regulatory objectives

(1)

The objectives of regulating legal services are—

(a)

to support the constitutional principles of the rule of law and the interests of justice,

(b)

to protect and promote the interests of consumers and the wider public interest,

(c)

to promote—

(i)

access to justice,

(ii)

an independent, strong and diverse legal profession,

(iii)

quality, innovation and competition in the provision of legal services,

(iv)

effective communication between regulators and legal services providers, and

(v)

effective communication between regulators and bodies that represent the interests of consumers, and

(d)

for those regulating legal services to—

(i)

use and promote best practice in relation to assessing and improving the quality of regulation and compliance with applicable legislation and rules,

(ii)

adhere to the regulatory principles described in section 3(4), and

(iii)

promote and maintain adherence to the professional principles.

(2)

In this Act, the “regulatory objectives” are the objectives described in subsection (1).

3Application of the regulatory objectives

(1)

A regulatory authority must so far as practicable exercise its regulatory functions (see section 6) in a manner which—

(a)

is compatible with the regulatory objectives, and

(b)

it considers most appropriate to meet those objectives.

(2)

For the purpose of section 2(1)(b) and (c), a regulatory authority must take into account the principles that—

(a)

a consumer should have access to a range of legal services that are affordable and suited to the consumer’s needs,

(b)

a consumer should receive sufficient information about the consumer’s rights and the services that are available,

(c)

a consumer should be treated fairly at all times,

(d)

a consumer should be able to access a means of redress when services are not of a suitable standard, and

(e)

the views of consumers should be understood and taken into account.

(3)

Without limit to the generality of section 2(1)(c)(ii), a regulatory authority must encourage equal opportunities (as defined in Section L2 of Part 2 of schedule 5 of the Scotland Act 1998).

(4)

For the purpose of section 2(1)(d)(ii), the regulatory principles are—

(a)

that regulatory functions should be—

(i)

exercised in a way that is transparent, accountable, proportionate and consistent, and

(ii)

targeted only at cases in which action is needed, and

(b)

that regulatory functions should be exercised in a way that contributes to achieving sustainable economic growth, except to the extent that it would be inconsistent with the regulatory objectives to do so.

(5)

For the purpose of this section, the regulatory authorities are—

(a)

the Court of Session,

(b)

the Lord President,

(c)

the Commission,

(d)

the Scottish Solicitors’ Discipline Tribunal,

(e)

each category 1 and category 2 regulator, and

(f)

each approved regulator of licensed providers.

Professional principles

4Professional principles

(1)

A person providing legal services should—

(a)

support the proper administration of justice,

(b)

act with independence (in the interests of justice),

(c)

act with integrity,

(d)

act in the best interests of the person’s clients (and keep clients’ affairs confidential),

(e)

maintain good standards of work,

(f)

where—

(i)

exercising a right of audience before any court, or

(ii)

conducting litigation in relation to proceedings in any court,

comply with such duties as are normally owed to the court by such persons,

(g)

meet the person’s obligations under any relevant professional rules,

(h)

act in conformity with professional ethics.

(2)

In this Act, the “professional principles” are the principles described in subsection (1).

Meaning of key expressions

5Meaning of “legal services” and “legal services provider”

(1)

For the purposes of this Act, legal services are services which consist of (at least one of)—

(a)

the provision of legal advice or assistance in connection with—

(i)

any contract, deed, writ, will or other legal document,

(ii)

the application of the law, or

(iii)

any form of resolution of legal disputes,

(b)

the provision of legal representation in connection with—

(i)

the application of the law, or

(ii)

any form of resolution of legal disputes.

(2)

But, for those purposes, legal services do not include—

(a)

judicial activities,

(b)

any other activity of a judicial nature,

(c)

any activity of a quasi-judicial nature, or

(d)

any activity which involves acting as a third party decision-maker or facilitator in a type of alternative dispute resolution.

(3)

In subsection (1)(a)(iii) and (b)(ii), “legal disputes” includes disputes as to any matter of fact the resolution of which is relevant to determining the nature of any person’s legal rights or obligations.

(4)

In this Act, “legal services provider” means a person or body that provides legal services (whether or not directly to the public and whether or not the person’s provision of such legal services is regulated).

6Meaning of regulatory functions

For the purposes of this Act, a reference to the regulatory functions of a regulatory authority is a reference to its functions of regulating legal services providers in relation to any matter of professional practice, conduct or discipline including, as appropriate—

(a)

setting standards for admission or authorisation and the ongoing training of its providers,

(b)

handling complaints about its providers,

(c)

making regulatory rules under any relevant enactment, and

(d)

complying with the requirements imposed on the regulatory authority under this Act (for example, in relation to keeping a register of its providers) and, if applicable, Part 2 of the 2010 Act.