Legal Services Bill [HL]

moved Amendment No. 149ZN: 149ZN: Schedule 16, page 230, line 45, at end insert— ““(ba) if the body is an individual carrying on a business as a sole principal, that individual;”” The noble Lord said: I shall speak also to a whole raft of related amendments. Amendment No. 149ZN and the other amendments in the group relate to entity-based regulation. This would allow the Solicitors Regulation Authority to focus some of its regulation on the organisation through which the legal services are delivered rather than focus all regulation on the individual solicitor. The Government have announced that legal disciplinary practices will be in place later this year. Any hope that the profession has of ensuring that legal disciplinary practices can immediately get off the ground will depend on all the technical problems having been removed during the passage of this Bill. The purpose of these amendments, therefore, is to allow the regulation of legal disciplinary practices by entity-based regulation, which has been accepted by both the Government and the SRA as being by far the most practical and easiest way to regulate them. The amendments are largely technical. Amendments Nos. 150ZF, 150ZN, 150ZQ and 150ZR would make certain that the Law Society had the power to make rules requiring solicitors and registered European lawyers to practise in regulated entities, subject to any exceptions laid down in the rules. Amendments Nos. 149ZN, 150ZL, 150ZS, 150CZF, 150CZG, 150CZH, 150CC and 150LA provide that the entity-regulation regime extends to sole practitioners and to employees of sole practitioners. A sole practitioner may run a legal services business of considerable size with a large number of qualified and unqualified employees. The Law Society should be able to apply the same regulatory regime to the whole of a business, whether owned by a single solicitor, a partnership or an incorporated business. Amendment No. 150ZJ would allow the Law Society to impose conditions on the recognition of a recognised body, which is essential for proper regulation. This is a similar provision to the power to place conditions on an individual solicitor’s practising certificate. New alternative business structure licensing bodies will also have a similar power. Amendments Nos. 149ZP, 150ZM, 150AA, 150AB, 150BA, 150BB, 150CZA, 150CZB, 150CZC, 150CZD, 150CZE and 150CZJ are technical amendments that ensure that the amendments to the Administration of Justice Act do not accidentally prevent some forms of practice which currently exist. Complex structures involving lawyers and different forms of European corporate practice have evolved. These are essentially legal disciplinary practices and not alternative business structures; but, unless these amendments are made certain, structures which are currently permitted would have to be regulated as alternative business structures under the new regime. Amendment No. 150ZH is designed to ensure that the Law Society has sufficient flexibility in developing its entity-based regulation requirements with regard to prescribing the manner and form for recognition applications. Amendment No. 150ZK is also intended to allow flexibility. It permits the scheme to be proportionate to the different risks presented by different categories of legal business. I beg to move.