Part 7: Further Provisions Relating to the Board and the Olc
386.This Part of the Act makes provision for the funding of the Board and OLC by way of levy on the approved regulators, including requirements for rules to be made by the Board clarifying when the levy is to be made payable, and the amount payable as well as the circumstances in which the levy may be waived.
387.It also defines the type of guidance that the Board may give. It makes provision allowing the Board to enter into voluntary arrangements for the purpose of improving standards in the provision of legal services, and provision for extending the jurisdiction of the OLC to a further range of complaints. This Part also provides that information obtained by the Board (whether in its capacity as an approved regulator or licensing authority or otherwise) may be used by the Board for any purpose connected to the exercise of its functions.
Section 162: Guidance
388.Section 162(1) sets out a non-exhaustive list of matters about which the Board may give guidance. This guidance may include information or advice, and section 162(3) allows the Board to give financial or other assistance to persons who provide that information or advice. The Board will be able to publish its guidance and offer copies for sale. Following any guidance being issued, the Board may consider the extent to which an approved regulator has complied with such guidance when exercising its regulatory functions. Section 162(6) requires that, when the Board acts as approved regulator or a licensing authority under Part 5 of the Act, it must have regard to any guidance it has issued under this section.
Section 163: Voluntary arrangements
389.This section allows the Board to enter into voluntary arrangements with any person for the purposes of improving standards and promoting best practice in the legal services sector.
Section 164: Power to establish voluntary scheme for resolving complaints
390.This section gives the OLC a power, subject to an order made by the Lord Chancellor, to establish a complaints scheme which is separate from the ombudsman scheme under Part 6. A scheme set up under this section can make provision in relation to complaints about acts or omissions of persons providing legal services who are not authorised persons. Such a scheme is referred to as a “voluntary scheme” and the rules under this section are referred to as “voluntary scheme rules”. The Lord Chancellor’s order can limit the kinds of complaint that come within the scheme by reference to the description of the complainant, the respondent, or the legal services to which the complaint relates. The voluntary scheme can provide redress to consumers but cannot be used to discipline respondents. Section 164(9) makes clear that the consent requirements and the Board’s powers in respect of rules (in sections 155 and 156 respectively) apply to voluntary scheme rules in the same way as they apply to scheme rules. Section 164(8) makes clear that section 131, which establishes vicarious responsibility in respect of matters which are the subject of complaints, applies for the purposes of the voluntary scheme as it applies for the purposes of the ombudsman scheme.
Section 165: Procedure for making orders under section 164
391.This section sets out the procedure for making an order under section 164(2). The Lord Chancellor can only make such an order upon recommendation by one of the interested bodies (the OLC, the Board or the Consumer Panel). Following a request from the Lord Chancellor an interested body must consider whether it is appropriate to make a recommendation. Before making a recommendation, an interested body must publish the draft recommendation and invite and consider representations from the public. Upon receipt of a recommendation the Lord Chancellor must consider whether to follow it. If the Lord Chancellor decides not to follow a recommendation the Lord Chancellor must publish reasons for this.
Section 166: Operation of voluntary scheme
392.This section sets out the circumstances in which complaints may be determined and provides for a way in which further detail of the voluntary scheme is provided. A complaint may be determined under the voluntary jurisdiction scheme only if the complainant falls within a class of persons specified in voluntary scheme rules, if the complainant wants the voluntary scheme to deal with their complaint, if (at the time of the act or omission complained of) the respondent was participating in the scheme and if (when the complaint is made) the respondent has not withdrawn from the scheme.
393.Further, complaints received and determined under the auspices of the voluntary jurisdiction scheme will be dealt with in accordance with standard terms fixed by the OLC with the Board’s consent. In particular, standard terms may provide for the payment of a fee to the OLC by persons participating in the scheme and/or awards of costs on the determination of a complaint (including awards in favour of the OLC to provide a contribution to its costs in dealing with the complaint).
Section 167: Restricted Information
394.Under this section, “restricted information” is any information obtained by the Board in the exercise of its functions. A restricted person is the Board (including in its capacity as approved regulator or licensing authority) or a person authorised by the Board to carry out its functions. Restricted information must not be disclosed by a restricted person or by any person who has received the information from a restricted person. Section 168 provides an exception to this rule. Restricted information does not include “excluded information”, namely information which was obtained more than 70 years before the date of disclosure, or which is already available to the public, or which is in an appropriately “anonymised” form so that information relating to a particular individual cannot be ascertained from it.
Section 168: Disclosure of restricted information
395.This section makes exceptions to section 167. The first is that a restricted person may disclose restricted information to another restricted person. The second is that restricted information may be disclosed for the purposes of enabling the Board to exercise its functions. Section 168(3) sets out a list of further specific and limited circumstances in which restricted information may be disclosed, with the possibility (section 168(3)(g)) of additional purposes being added by order made by the Lord Chancellor. Such orders may only be made in order to allow disclosure to persons (other than approved regulators) who exercise regulatory functions. The section also allows the Lord Chancellor to prevent the disclosure of restricted information under section 167 by order for the purposes prescribed in that order.
Section 169: Disclosure of information to the Board
396.This section sets out a list of permitted persons and allows for the disclosure of information by them to the Board to enable or assist it in exercising its functions. The section prohibits the disclosure of information where it contravenes the Data Protection Act 1988, where it is prohibited by Part 1 of the Regulation of Investigatory Powers Act 2000 or, if it is being disclosed on behalf of the Commissioners for Her Majesty’s Revenue and Customs, where it has not been authorised by the Commissioners. The section allows the Lord Chancellor to designate other persons as persons who can disclose information to the Board, where their functions are of a public nature.
Section 170: Data protection
397.This section amends the Data Protection Act 1998 to ensure that the Legal Services Act 2007 is able to operate compatibly with it by exempting personal data processed by the Legal Services Board from the subject information provisions, where application of those provisions would prejudice the proper discharge of the functions. This will ensure that the Board is able to use its information powers to the benefit of the public by highlighting areas of concern. This amendment is similar to provision made in the 1998 Act for certain other regulators and ombudsmen, for example the Financial Services Authority.
Section 172: Funding
398.This section sets out the mechanism by which the Board and the OLC receive funding to meet their expenditure in carrying out their functions. The Lord Chancellor may pay sums to the Board or the OLC to cover their expenditure under or for the purposes of the Act. The Lord Chancellor may also pay sums to the Board to cover expenditure for the purposes of its functions under any other enactment. This is to ensure that the Board can, via the levy, recover amounts in respect of expenditure resulting from functions which it has under other Acts by virtue of amendments made by this Act. The Lord Chancellor may determine the manner in which, and times at which, sums are to be paid and may impose conditions on the payments.
Section 173: The levy
399.This section makes provision for a levy. The purpose of the levy is to cover:
expenditure by the Board under or for the purposes of the Act or any other enactment;
expenditure by the OLC under or for the purposes of the Act; and
expenditure of the Lord Chancellor on the establishment of the Board and the OLC.
400.This expenditure is met in the first instance by sums paid by the Lord Chancellor’s grant under section 172. The levy, which is paid into the Consolidated Fund, recoups this expenditure from the “leviable bodies”. The leviable bodies are the approved regulators, the person designated as the regulator in relation to claims management services under the Compensation Act 2006, and such other persons as the Lord Chancellor may prescribe by order (section 173(5)). The Board must be satisfied that the rules concerning the apportionment of the levy are fair and proportionate. To ensure that expenditure is not recovered twice, the expenditure to which the levy relates is the difference between the total of the expenditure of the Board and OLC and the expenditure of the Lord Chancellor (for the establishment of the Board and OLC) and the total of any sums received by the Board and OLC as:
application fees;
charges for providing statements, guidance, rules;
sums received in the Board’s capacity as approved regulator;
sums received in the Board’s capacity as licensing authority;
amounts received by the OLC by way of charges paid by respondents;
costs paid to the OLC in relation to complaints;
amounts paid to the Board in respect of voluntary arrangements; and
amounts paid to the Board under paragraph 7(g) of the Schedule to the Compensation Act 2006.
401.The OLC’s leviable expenditure excludes any cost incurred that may reasonably be attributed to the exercise of its functions under sections 164, 165 and 166.
Section 174: The levy: supplementary provisions
402.In addition, the levy rules require the Board to calculate the apportionment of the levy among the bodies which are required to pay it, and to notify those bodies of their liability to pay the levy and of the times it is payable.
403.In addition, the levy rules require the Board to calculate the apportionment of the levy among approved regulators and to notify approved regulators of their liability to pay the levy and the times at which it is to be paid.
Section 175: Amounts payable into the Consolidated Fund
404.All monies received by the Board or the OLC must be paid into the Consolidated Fund. This section lists the different sources of income of the Board and OLC that must be paid into the Consolidated Fund.
