Consultation on Ownership and Control of Firms Providing Legal Services under the Legal Services (Scotland) Act 2010

Consultation on Ownership and Control of Firms

Ownership and control of firms providing legal services under the Legal Services (Scotland) Act 2010

The primary aim of the Legal Services (Scotland) Act 2010 is to remove the current restrictions in the Solicitors (Scotland) Act 1980 on how solicitors can organise their businesses. It will allow (but not compel) solicitors to form partnerships with non-solicitors, and to seek investment from outside the profession.

The new business entities permitted by the Act will be called licensed legal services providers ("licensed providers"), and will be regulated at entity level by regulators approved by the Scottish Ministers in accordance with a regulatory framework set out in the Act.

Licensed providers will provide legal services to the public for fee, gain or reward, under a licence issued by an approved regulator. Licensed providers must contain at least one solicitor, but will also contain at least one other type of professional offering other services. For example, a licensed provider might be a partnership between a number of solicitors and accountants, and offer a range of legal and accountancy services.

Non-solicitors will be able to invest in licensed providers. In order to do so, they will be required to satisfy a strict "fitness for involvement" test.

In addition to the "fitness for involvement" test, section 49 of the Act provides that at least 51% of the total ownership or control of any licensed provider must lie with solicitor investors, or investors who are members of other regulated professions. A general definition of "regulated profession" is given in the Act, with section 49(3) providing that "a 'regulated profession' is a profession the professional activities of whose members (and qualifications for membership of which) are, under statutory or administrative arrangements, regulated by a professional association". However, the Scottish Ministers are required (in section 49(4)(a)) to set out, by regulations, exactly what is, or is not, to be regarded as a "regulated profession".

The consultation on "ownership and control of firms providing legal services under the Legal Services (Scotland) Act 2010" sought views on who should be included in the definition of "regulated profession" in section 49 of the Act and so be permitted to own a majority or controlling share in a licensed provider. 29 responses were received and the following are those responses which the Scottish Government has permission to publish. The consultation was open from 14 February to 11 May 2011

Further background information is available in the consultation paper .

Organisations

Consumer Focus Scotland

NewLaw Legal Ltd

Orkney Islands Council

Royal Institution of Chartered Surveyors in Scotland

Save & Invest Group Limited

Scottish Legal Action Group (SCOLAG)

Scottish Legal Complaints Commission (SLCC)

The Association of Chartered Certified Accountants (ACCA)

The Chartered Institute of Patent Attorneys (CIPA) & The Institute of Trade Mark Attorneys (ITMA)

The Chartered Institute of Public Finance & Accountancy (CIPFA)