SCHEDULES

SCHEDULE 1 Intervention in Solicitor’s Practice

Section 35.

Part I Circumstances in which Society may Intervene

1

(1)

Subject to sub–paragraph (2), the powers conferred by Part II of this Schedule shall be exercisable where—

(a)

the F1Society has reason to suspect dishonesty on the part of—

(i)

a solicitor, or

(ii)

an employee of a solicitor, or

(iii)

the personal representatives of a deceased solicitor,

in connection with that solicitor’s practice F2or former practice or in connection with any trust of which that solicitor is or formerly was a trustee F3or that employee is or was a trustee in his capacity as such an employee ;

F4(aa)

the Society has reason to suspect dishonesty on the part of a solicitor (“S) in connection with—

(i)

the business of any person of whom S is or was an employee, or of any body of which S is or was a manager, or

(ii)

any business which is or was carried on by S as a sole trader;

(b)

the F5Society considers that there has been undue delay on the part of the personal representatives of a deceased solicitor who immediately before his death was practising as a sole solicitor in connection with that solicitor’s practice or in connection with any F6trust ;

(c)

the F7Society is satisfied that a solicitor has failed to comply with rules made by virtue of section F831, 32 or 37(2)(c);

(d)

a solicitor has been F9made bankrupt or has made a composition or arrangement with his creditors;

(e)

a solicitor has been committed to prison in any civil or criminal proceedings;

F10(ee)

the F11Society is satisfied that a sole solicitor is incapacitated by illness F12, injury or accident to such an extent as to be unable to attend to his practice;

F13(f)

a solicitor lacks capacity (within the meaning of the Mental Capacity Act 2005) to act as a solicitor and powers under sections 15 to 20 or section 48 of that Act are exercisable in relation to him;

(g)

the name of a solicitor has been removed from or struck off the roll or a solicitor has been suspended from practice.

F14(h)

the F15Society is satisfied that a F16. . . solicitor has abandoned his practice;

F17(i)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(j)

any power conferred by this Schedule has been exercised in relation to a sole solicitor by virtue of sub–paragraph (1)(a) and he has acted as a sole solicitor within the period of eighteen months beginning with the date on which it was so exercised;

(k)

the F18Society is satisfied that a person has acted as a solicitor at a time when he did not have a practising certificate which was in force;

(l)

the F19Society is satisfied that a solicitor has failed to comply with any condition, subject to which his practising certificate was granted or otherwise has effect, to the effect that he may act as a solicitor only—

(i)

in employment which is approved by the Society in connection with the imposition of that condition;

(ii)

as a member of a partnership which is so approved;

(iii)

as F20a manager of a body recognised by the F21Society under section 9 of the M1Administration of Justice Act 1985 and so approved; or

(iv)

in any specified combination of those ways.

F22(m)

the Society is satisfied that it is necessary to exercise the powers conferred by Part 2 of this Schedule (or any of them) in relation to a solicitor to protect—

(i)

the interests of clients (or former or potential clients) of the solicitor or his firm, or

(ii)

the interests of the beneficiaries of any trust of which the solicitor is or was a trustee.

F23(1A)

In sub-paragraph (1) “ manager ” has the same meaning as in the Legal Services Act 2007 (see section 207 of that Act).

(2)

F24. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

On the death of a sole solicitor paragraphs 6 to 8 shall apply to the client accounts of his practice.

3

The powers conferred by Part II of this Schedule shall also be exercisable, subject to paragraphs 5(4) and F2510(9), where—

F26(a)

the Society is satisfied that there has been undue delay—

(i)

on the part of a solicitor in connection with any matter in which the solicitor or his firm is or was acting on behalf of a client or with any trust, or

(ii)

on the part of an employee of a solicitor in connection with any trust of which the employee is or was a trustee in his capacity as such an employee; and

(b)

the Society by notice in writing invites the solicitor to give an explanation within a period of not less than 8 days specified in the notice; and

(c)

the solicitor fails within that period to give an explanation which the F27Society regards as satisfactory; and

(d)

the Society gives notice of the failure to the solicitor and (at the same or any later time) notice that the powers conferred by Part II of this Schedule are accordingly exercisable.

4

(1)

Where the powers conferred by Part II of this Schedule are exercisable in relation to a solicitor, they shall continue to be exercisable after his death or after his name has been removed from or struck off the roll.

(2)

The references to the solicitor or his firm in paragraphs 5(1), 6(2) and (3) F28, 6A, 8, 9(1) F29, (5) and (6) and F3010(2) and (7) include, in any case where the solicitor has died, references to his personal representatives.

Part II Powers Exercisable on Intervention

Money

5

(1)

The High Court, on the application of the Society, may order that no payment shall be made without the leave of the court by any person (whether or not named in the order) of any money held by him (in whatever manner and whether it was received before or after the making of the order) on behalf of the solicitor or his firm.

(2)

No order under this paragraph shall take effect in relation to any person to whom it applies unless the Society has served a copy of the order on him (whether or not he is named in it) and, in the case of a bank F31or other financial institution, has indicated at which of its branches the Society believes that the money to which the order relates is held.

(3)

A person shall not be treated as having disobeyed an order under this paragraph by making a payment of money if he satisfies the court that he exercised due diligence to ascertain whether it was money to which the order related but nevertheless failed to ascertain that the order related to it.

(4)

This paragraph does not apply where the powers conferred by this Part of this Schedule are exercisable by virtue of paragraph 3.

6

(1)

Without prejudice to paragraph 5, if the F32Society passes a resolution to the effect that any sums of money to which this paragraph applies, and the right to recover or receive them, shall vest in the Society, all such sums shall vest accordingly (whether they were received by the person holding them before or after the F33Society's resolution) and shall be held by the Society on trust to exercise in relation to them the powers conferred by this Part of this Schedule and subject thereto F34and to rules under paragraph 6B upon trust for the persons beneficially entitled to them.

(2)

This paragraph applies—

(a)

where the powers conferred by this paragraph are exercisable by virtue of paragraph 1, to all sums of money held by or on behalf of the solicitor or his firm in connection with

F35(i)

his practice or former practice,

(ii)

any trust of which he is or formerly was a trustee, or

(iii)

any trust of which a person who is or was an employee of the solicitor is or was a trustee in the person's capacity as such an employee;

(b)

where they are exercisable by virtue of paragraph 2, to all sums of money in any client account; and

(c)

where they are exercisable by virtue of paragraph 3, to all sums of money held by or on behalf of the solicitor or his firm in connection with the trust or other matter F36in connection with which the Society is satisfied there has been undue delay as mentioned in sub-paragraph (a) of that paragraph.

(3)

The Society shall serve on the solicitor or his firm and on any other person having possession of sums of money to which this paragraph applies a certified copy of the Council’s resolution and a notice prohibiting the payment out of any such sums of money.

(4)

Within F378 days of the service of a notice under sub–paragraph (3), the person on whom it was served, on giving not less than 48 hours’ notice in writing to the Society and (if the notice gives the name of the solicitor instructed by the Society) to that solicitor, may apply to the High Court for an order directing the Society to withdraw the notice.

(5)

If the court makes such an order, it shall have power also to make such other order with respect to the matter as it may think fit.

(6)

If any person on whom a notice has been served under sub–paragraph (3) pays out sums of money at a time when such payment is prohibited by the notice, he shall be guilty of an offence and liable on summary conviction to a fine not exceeding F38level 3 on the standard scale.

F396A

(1)

Without prejudice to paragraph 5, if the Society passes a resolution to the effect that any rights to which this paragraph applies shall vest in the Society, those rights shall vest accordingly.

(2)

This paragraph applies to any right to recover or receive debts due to the solicitor or his firm in connection with his practice or former practice.

(3)

Any sums recovered by the Society by virtue of the exercise of rights vested under sub-paragraph (1) shall vest in the Society and shall be held by it on trust to exercise in relation to them the powers conferred by this Part of this Schedule and, subject to those powers and to rules under paragraph 6B, upon trust for the persons beneficially entitled to them.

(4)

The Society shall serve on the solicitor or his firm, and any person who owes a debt to which the order applies, a certified copy of the Society's resolution.

6B

(1)

The Society may make rules governing its treatment of sums vested in it under paragraph 6 or 6A(3).

(2)

The rules may in particular make provision in respect of cases where the Society, having taken such steps to do so as are reasonable in all the circumstances of the case, is unable to trace the person or persons beneficially entitled to any sum vested in the Society under paragraph 6 or 6A(3) (including provision which requires amounts to be paid into or out of compensation funds (within the meaning of section 36A)).

7

(1)

If the Society takes possession of any sum of money to which paragraph 6 F40or 6A(3) applies, the Society shall pay it into a special account in the name of the Society or of a person nominated on behalf of the Society, F41or into a client account of a solicitor nominated on behalf of the society, and any such person or solicitorshall hold that sum on trust to permit the Society to exercise in relation to it the powers conferred by this Part of this Schedule and subject thereto F42and to rules under paragraph 6B on trust for the persons beneficially entitled to it.

(2)

A bank F43or other financial institutionat which a special account is kept shall be under no obligation to ascertain whether it is being dealt with properly.

8

Without prejudice to paragraphs 5 to 7, if the High Court is satisfied, on an application by the Society, that there is reason to suspect that any person holds money on behalf of the solicitor or his firm, the court may require that person to give the Society information as to any such money and the accounts in which it is held.

Documents

9

(1)

The Society may give notice to the solicitor or his firm requiring the production or delivery to any person appointed by the Society at a time and place to be fixed by the Society—

(a)

where the powers conferred by this Part of this Schedule are exercisable by virtue of paragraph 1, of all documents in the possession F44or under the control of the solicitor or his firm in connection with his practice F45or former practice or with any trust of which the solicitor is or was a trustee; and

(b)

where they are exercisable by virtue of paragraph 3, of all documents in the possession F46or under the control of the solicitor or his firm in connection with the trust or other matters F47of which the Society is satisfied(whether or not they relate also to other matters).

(2)

The person appointed by the Society may take possession of any such documents on behalf of the Society.

(3)

Except in a case where an application has been made to the High Court under sub–paragraph (4), if any person having possession F48or control of any such documents refuses, neglects or otherwise fails to comply with a requirement under sub–paragraph (1), he shall be guilty of an offence and liable on summary conviction to a fine not exceeding F49level 3 on the standard scale.

(4)

The High Court, on the application of the Society, may order a person required to produce or deliver documents under sub–paragraph (1) to produce or deliver them to any person appointed by the Society at such time and place as may be specified in the order, and authorise him to take possession of them on behalf of the Society.

(5)

If on an application by the Society the High Court is satisfied that there is reason to suspect that documents in relation to which the powers conferred by sub–paragraph (1) are exercisable have come into the possession F50or under the control of some person other than the solicitor or his firm, the court may order that person to produce or deliver the documents to any person appointed by the Society at such time and place as may be specified in the order and authorise him to take possession of them on behalf of the Society.

F51(5A)

In the case of a document which consists of information which is stored in electronic form, a requirement imposed by a notice under sub-paragraph (1) or an order under sub-paragraph (4) or (5), is a requirement to produce or deliver the information in a form in which it is legible or from which it can readily be produced in a legible form.

(6)

On making an order under this paragraph, or at any later time, the court, on the application of the Society, may authorise a person appointed by the Society to enter any premises (using such force as is reasonably necessary) to search for and take possession of

F52(a)

any documents to which the order relates.

F53(b)

any property—

(i)

in the possession of or under the control of the solicitor or his firm, or

(ii)

in the case of an order under sub-paragraph (5), which was in the possession or under the control of such a person and has come into the possession or under the control of the person in respect of whom the order is made,

which the Society reasonably requires for the purpose of accessing information contained in such documents,

and to use property obtained under paragraph (b) for that purpose.

(7)

The Society, on taking possession of any documents F54or other property under this paragraph, shall serve upon the solicitor or personal representatives and upon any other person from whom they were received on the Society’s behalf or from whose premises they were taken a notice that possession has been taken on the date specified in the notice.

(8)

Subject to sub–paragraph (9) a person upon whom a notice under sub–paragraph (7) is served, on giving not less than 48 hours’ notice to the Society and (if the notice gives the name of the solicitor instructed by the Society) to that solicitor, may apply to the High Court for an order directing the Society to deliver the documents F55or other property to such person as the applicant may require.

(9)

A notice under sub–paragraph (8) shall be given within 8 days of the service of the Society’s notice under sub–paragraph (7).

(10)

Without prejudice to the foregoing provisions of this Schedule, the Society may apply to the High Court for an order as to the disposal or destruction of any documents F56or other property in its possession by virtue of this paragraph or paragraph 10.

(11)

On an application under sub–paragraph (8) or (10), the Court may make such order as it thinks fit.

(12)

Except so far as its right to do so may be restricted by an order on an application under sub–paragraph (8) or (10), the Society may take copies of or extracts from any documents in its possession by virtue of this paragraph or paragraph 10 and require any person to whom it is proposed that such documents shall be delivered, as a condition precedent to delivery, to give a reasonable undertaking to supply copies or extracts to the Society.

F57Mail and other forms of communication

F58 10

(1)

The High Court, on the application of the Society, may from time to time make a communications redirection order.

(2)

A communications redirection order is an order that specified communications to the solicitor or his firm are to be directed, in accordance with the order, to the Society or any person appointed by the Society.

(3)

For the purposes of this paragraph—

(a)

“ specified communications ” means communications of such description as are specified in the order;

(b)

the descriptions of communications which may be so specified include—

(i)

communications in the form of a postal packet;

(ii)

electronic communications;

(iii)

communications by telephone.

(4)

A communications redirection order has effect for such time not exceeding 18 months as is specified in the order.

(5)

Where a communications redirection order has effect, the Society or the person appointed by the Society may take possession or receipt of the communications redirected in accordance with the order.

(6)

Where a communications redirection order is made, the Society must pay to—

(a)

in the case of an order relating to postal packets, the postal operator concerned, and

(b)

in any other case, the person specified in the order,

the like charges (if any) as would have been payable for the redirection of the communications to which the order relates if the addressee had permanently ceased to occupy or use the premises or other destination of the communications and had applied to the postal operator or the specified person (as the case may be) to redirect the communications to him as mentioned in the order.

(7)

The High Court may, on the application of the Society, authorise the Society, or a person appointed by it, to take such steps as may be specified in the order in relation to any website purporting to be or have been maintained by or on behalf of the solicitor or his firm if the High Court is satisfied that the taking of those steps is necessary to protect the public interest or the interests of clients (or potential or former clients) of the solicitor or his firm.

(8)

In this paragraph “ postal operator ” and “ postal packet ” have the meaning given by F59section 27 of the Postal Services Act 2011.

(9)

This paragraph does not apply where the powers conferred by this Part of this Schedule are exercisable by virtue of paragraph 3.

Trusts

11

(1)

If the solicitor or his personal representative is a trustee of a F60trust , the Society may apply to the High Court for an order for the appointment of a new trustee in substitution for him.

(2)

The M2Trustee Act 1925 shall have effect in relation to an appointment of a new trustee under this paragraph as it has effect in relation to an appointment under section 41 of that Act.

General

12

The powers in relation to sums of money F61, documents and other property conferred by this Part of this Schedule shall be exercisable notwithstanding any lien on them or right to their possession.

13

Subject to any order for the payment of costs that may be made on an application to the court under this Schedule, any costs incurred by the Society for the purposes of this Schedule, including, without prejudice to the generality of this paragraph, the costs of any person exercising powers under this Part of this Schedule on behalf of the Society, shall be paid by the Solicitor or his personal representatives and shall be recoverable from him or them as a debt owing to the Society.

F6213A

(1)

The High Court, on the application of the Society, may order a former partner of the solicitor to pay a specified proportion of the costs mentioned in paragraph 13.

(2)

The High Court may make an order under this paragraph only if it is satisfied that the conduct (or any part of the conduct) by reason of which the powers conferred by this Part were exercisable in relation to the solicitor was conduct carried on with the consent or connivance of, or was attributable to any neglect on the part of, the former partner.

(3)

In this paragraph “ specified ” means specified in the order made by the High Court.

14

Where an offence under this Schedule committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any director, manager, secretary or other similar officer of the body corporate or any person who was purporting to act in any such capacity, he, as well as the body corporate, shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

15

Any application to the High Court under this Schedule may be disposed of in chambers.

16

The Society may do all things which are reasonably necessary for the purpose of facilitating the exercise of its powers under this Schedule.

F63 SCHEDULE 1A INADEQUATE PROFESSIONAL SERVICES

Circumstances in which Council’s powers may be exercised

F631

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Directions which may be given

F632

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Compensation

F633

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Taxation of costs

F634

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Failure to comply with direction

F635

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fees

F636

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Costs

F637

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Duty of Tribunal

F638

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interpretation

F639

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F64F64SCHEDULE 2

1

The fund shall be maintained and administered by the Society and shall be held by the Society on trust for the purposes provided for in section 36 and this Schedule.

2

(1)

Subject to F65sub–paragraphs (2) and (2A), every solicitor—

(a)

shall on each occasion on which he applies for a practising certificate pay to the Society with the fee payable in respect of that certificate under section 11 a contribution (in this Schedule referred to as an “annual contribution”) of such amount as the Council may from time to time determine; and

(b)

where it appears from his application for a practising certificate that he has held or received clients’ money at any time during the period specified in the application, shall also, if so required by the Society, pay to the Society, before the issue of the certificate, a further contribution (in this Schedule referred to as a “special levy”) of such amount . . . F66as the Council may from time to time determine.

(2)

An annual contribution and a special levy—

(a)

shall not be payable in respect of the first three practising certificates to be issued to a solicitor after his admission; and

(b)

shall be payable in the reduced amount mentioned in sub–paragraph (3) in respect of the next three certificates to be so issued.

F67(2A)

Sub–paragraph (1) above shall not apply to any solicitor who is a Crown Prosecutor.

(3)

The reduced amount referred to in sub–paragraph (2)(b) is one–half of the amount which would otherwise be payable.

F68(3A)

The Council may require a solicitor to pay an annual contribution of a reduced amount where that payment is made with respect to a practising certificate which has a replacement date which is less than 12 months after the replacement date of the solicitor’s previous practising certificate.

(3B)

Where it appears from his application for a practising certificate that a solicitor has not held or received clients’ money at any time during the period specified in the application, the Council may require him—

(a)

to pay an annual contribution of a specified reduced amount on that application, or

(b)

to pay no annual contribution on that application.

(4)

All annual contributions and special levies received by the Society under this paragraph shall be paid into the fund.

F693

The Society may invest any money which forms part of the fund in any investments in which trustees may invest under the general power of investment in section 3 of the Trustee Act 2000 (as restricted by sections 4 and 5 of that Act).

4

F70 . . . the Society may borrow for the purposes of the fund from any lender and may charge any investments of the fund by way of security for any such loan; but the aggregate sum owing at any one time in respect of such loans shall not exceed £100,000.

5

The Society may insure with authorised insurers for such purposes and on such terms as the Council may deem expedient in relation to the fund.

6

There shall be carried to the credit of the fund—

(a)

all annual contributions and special levies paid to the Society in pursuance of paragraph 2;

(b)

all interest, dividends and other income and accretions of capital arising from the investment of the fund or any part of it;

(c)

the proceeds of any realisation of any investments of the fund;

(d)

all money borrowed for the purposes of the fund;

(e)

all sums received by the Society under any insurance effected by the society under paragraph 5;

(f)

all sums received by the Society under section 36(4); and

(g)

any other money which may belong or accrue to the fund or be received by the Society in respect of the fund.

7

All money from time to time forming part of the fund and all investments of the fund shall be applicable—

(a)

for payment of any costs, charges and expenses of establishing, maintaining, administering and applying the fund;

(b)

for payment of any premiums on insurances affected by the Society under paragraph 5;

(c)

for repayment of any money borrowed by the Society for the purposes of the fund and for payment of interest on any money so borrowed;

(d)

for payment of any grants which the Society may make under section 36;

(e)

for payment of all costs, charges and expenses incurred by the Society by virtue of paragraph 1(1)(a) of Schedule 1 and of any costs or damages incurred by the Society or its employees or agents as a result of proceedings against the Society or its employees or agents for any act or omission done or made by it or them in good faith and in the execution or purported execution of the powers conferred by Part II of Schedule 1;

(f)

for payment of any other sums properly payable out of the fund by virtue of section 36 or this Schedule.

SCHEDULES 3 CONSEQUENTIAL AMENDMENTS

Section 89.

F711

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F722

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F733

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F74X14

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annotations:
Amendments (Textual)

F74Sch.3 para. 4 repealed (31.01.2013) by Statute Law (Repeals) Act 2013, Sch.1 Pt.5

Editorial Information

X1The text of ss. 86, 89(1)(2), Sch. 3 paras. 4, 6, 8, and 9, and Sch. 4, is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and, except as indicated, does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

F755

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

X26

In section 192(2) of the M3 County Courts Act 1959 (as substituted by section 10(2) of the M4 Administration of Justice Act 1969), for paragraph (c) substitute the following paragraph:—

“(c)

section 69(3) of the Solicitors Act 1974”

Annotations:
Marginal Citations

M31959 c. 22.

M41969 c. 58.

Editorial Information

X2The text of ss. 86, 89(1)(2), Sch. 3 paras. 4, 6, 8, and 9, and Sch. 4, is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and, except as indicated, does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

F767

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

X38

In section 4(2) of the M5 Matrimonial Causes Act 1967, for the words “section 73(4) of the Solicitors Act 1957” substitute the words “ section 74(3) of the Solicitors Act 1974 ”.

Annotations:
Marginal Citations

M51967 c. 56.

Editorial Information

X3The text of ss. 86, 89(1)(2), Sch. 3 paras. 4, 6, 8, and 9, and Sch. 4, is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and, except as indicated, does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

9

F77. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F7810

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

X4Schedule 4 ENACTMENTS REPEALED

Section 89.

Annotations:
Editorial Information

X4The text of ss. 86, 89(1)(2), Sch. 3 paras. 4, 6, 8, and 9, and Sch. 4, is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and, except as indicated, does not reflect any amendments or repeals which may have been made prior to 1.2.1991.