Powers of Council to intervene
Powers where dishonesty alleged
38. (1) If the Council have reasonable cause to believe that a solicitor or an employee of his or an
incorporated practice or any employee thereof has been guilty of any such dishonesty as is mentioned in section 43(2) they may—
(a) require the production or delivery to any person appointed by the Council at a time and place fixed by the Council of the documents to which this section applies;
(b) take possession of all such documents; and
(c) apply to the court for an order that no payment be made by any banker, building society or other body named in the order out of any banking account or any sum deposited in the name of such solicitor or his firm or, as the case may be, such incorporated practice without the leave of the court and the court may make such order.
(2) This section applies to the following documents—
(a) all books, accounts, deeds, securities, papers and other documents in the possession or control of such solicitor or his firm or, as the case may be, such incorporated practice;
(b) all books, accounts, deeds, securities, papers and other documents relating to any trust of which he is a sole trustee or is a co-trustee only with one or more of his partners or employees or, as the case may be, of which the incorporated practice or one of its employees is a sole trustee or it is a co-trustee only with one or more of its employees.
(3) Part II of Schedule 3 shall have effect in relation to the powers of the Council under this section.
Powers where delay alleged
39. (1) If
(a) a complaint is made to the Society that there has been undue delay on the part of a solicitor or an incorporated practice in dealing with any matter in which he or his firm or, as the case may be, it is or has been concerned in a professional capacity, or any matter relating to a trust of which he is or was the sole trustee, or a co-trustee only with one or more of his partners or employees or, as the case may be, the incorporated practice or one of its employees was the sole trustee or it was a co-trustee only with one or more of its employees, and
(b) the Council are of opinion that the delay ought to be investigated,
the Council may by notice in writing at any time, and from time to time, require the solicitor or, as the case may be, incorporated practice to give an explanation of the delay.
(2) Any notice given by the Council under subsection (1) may specify a period, not being less than 21 days, within which they require an explanation to be furnished; and if within that period the solicitor or, as the case may be, incorporated practice does not reply or fails to furnish an explanation which the Council regard as sufficient and satisfactory, and he or, as the case may be, it is so informed in writing, section 38 shall apply in relation to that solicitor and his firm or, as the case may be, to that incorporated practice in so far as it relates to documents or payments connected with the matter complained of (but not otherwise) and shall so apply notwithstanding that the Council may not have reasonable cause to believe that the solicitor or, as the case may be, incorporated practice has been guilty of any such dishonesty as is mentioned in section 43(2).
Powers where excessive fees etc. charged
39A. (1) This section applies where the Council are satisfied, in the case of any solicitor or incorporated
practice, after inquiry and after giving The solicitor or incorporated practice an opportunity of being heard, that the solicitor or incorporated practice has issued an account for professional fees and outlays of an amount which is grossly excessive (whether or not the account has been paid by or on behalf of the client or debited by the solicitor or incorporated practice to the account of any sums held on behalf of the client).
(2) Where this section applies the Council may—
(a) in the case of a solicitor, withdraw his practising certificate; or
(b) in the case of an incorporated practice, withdraw the practising certificates of all or any of the solicitors who are directors of the incorporated practice;
and a certificate so withdrawn shall cease to have effect and the solicitor shall be suspended from practice as a solicitor.
(3) On being satisfied by the solicitor or, as the case may be, incorporated practice that he or it has complied with the requirements of subsection (4) the Council, unless they are of the opinion that the solicitor or incorporated practice is liable to disciplinary proceedings under Part IV, shall terminate the suspension from practice of the solicitor or solicitors concerned and shall restore to him or them any practising certificates held by him or them for the practice year then current.
(4) The requirements referred to in subsection (3) are—
(a) to submit the account to the Auditor of the Court of Session for taxation together with all documents in the possession or control of the solicitor or incorporated practice which relate to the matters in respect of which the account was issued; and
(b) to refund to the client a sum not less than the relevant amount.
(5) The Council shall be entitled to be represented at a diet for taxation by virtue of subsection (4)(a) and to make representations to the Auditor of Court.
(6) Where, on taxation of an account by virtue of subsection (4)(a), the amount due in respect of the account as taxed is the amount specified in the account as issued, the fee of the Auditor of Court shall be paid by the Council; but in any other case the fee shall be paid by the solicitor or, as the case may be, the incorporated practice.
(7) In subsection (4)(b) “the relevant amount” is the amount (if any) by which the sum received by the solicitor or incorporated practice in respect of the account exceeds the amount due in respect of the account as taxed.
(8) A solicitor may, within 21 days of receiving written notice of a decision of the Council under subsection (2) to withdraw his practising certificate, appeal to the Court against that decision; and on any such appeal the Court may give such directions in the matter, including directions as to the expenses of the proceedings before the Court, as it may think fit; and the order of the Court shall be final.
(9) The withdrawal of a solicitor’s practising certificate under subsection (2) shall be without prejudice to the operation of section 35(3) or section 37(8).
Powers where failure to comply with accounts rules, etc.
40. (1) Where the Council are satisfied, in the case of any solicitor or incorporated practice, after
enquiry and after giving the solicitor or, as the case may be, incorporated practice an opportunity of being heard, that the solicitor or, as the case may be, incorporated practice has failed or is failing to comply with any provisions of—
(a) section 35 or the accounts rules made under that section, or
(b) section 37 or the accountant’s certificate rules or other rules made under that section,
so far as applicable in his or, as the case may be, its case (in this section referred to as “the applicable provisions”), the Council may, subject to the provisions of this section,
(a) withdraw the practising certificate held by the solicitor; or as the case may be—
(b) withdraw the practising certificate or certificates of any or all of the solicitors who are directors of the incorporated practice,
and a certificate so withdrawn shall thereupon cease to have effect and the solicitor shall be suspended from practice as a solicitor.
(2) On being satisfied by the solicitor that he or, as the case may be, by the incorporated practice that it is able and willing to comply with the applicable provisions, the Council, unless they are of the opinion that the solicitor or, as the case may be, the incorporated practice is liable to disciplinary proceedings under Part IV, shall terminate the suspension from practice of the solicitor or solicitors concerned and shall restore to him or them any practising certificate or certificates held by him or them for the practice year then current.
(3) Within 21 days after receiving written notice of a decision of the Council under this section to withdraw his practising certificate, or to refuse to terminate his suspension from practice, a solicitor may appeal to the court against the decision; and on any such appeal the court may give such directions in the matter, including directions as to the expenses of the proceedings before the court, as it may think fit; and the order of the court shall be final.
(4) Any withdrawal of a solicitor’s practising certificate by the Council in exercise of the power conferred by subsection (1) shall be without prejudice to the operation of section 35(3) or section 37(8).
Appointment of judicial factor
41. Where the Council, in exercise of any power conferred on them by the accounts rules, have caused an investigation to be made of the books, accounts and other documents of a solicitor or an incorporated practice, and, on consideration of the report of the investigation, the Council are satisfied—
(a) that the solicitor or, as the case may be the incorporated practice has failed to comply with the provisions of those rules, and
(b) that, in the case of a solicitor, in connection with his practice as such either—
(i) his liabilities exceed his assets in the business, or
(ii) his books, accounts and other documents are in such a condition that it is not reasonable, practicable to ascertain definitely whether his liabilities exceed his assets, or
(iii) there is reasonable ground for apprehending that a claim on the Guarantee Fund may arise; or
(c) that, in the case of an incorporated practice, either-
(i) its liabilities exceed its assets, or
(ii) its books, accounts and other documents are in such a condition that it is not reasonable practicable to ascertain definitely whether its liabilities exceed its assets, or
(iii) there is reasonable ground for apprehending that a claim on the guarantee fund may arise,
the Council may apply to the Court for the appointment of a judicial factor on the estate of the solicitor or, as the case may be, of the incorporated practice; and the court, on consideration of the said report and after giving the solicitor or as the case may be, the incorporated practice an opportunity of being heard, may appoint a judicial factor on such estate, or do otherwise as seems proper to it.
Distribution of sums in client bank account
42. (1) Subject to the provisions of this section, where, in any of the events mentioned in subsection (2) or (2A), the sum at the credit of any client account kept by a solicitor or an incorporated practice (or where several such accounts are kept by him or, as the case may be, by it the total of the sums at the credit of those accounts) is less than the total of the sums received by him in the course of his practice on behalf of his clients or, as the case may be, by it on behalf of its clients and remaining due by him or, as the case may be, by it to them, then, notwithstanding any rule of law to the contrary, the sum at the credit of the client account (or where several such accounts are kept, the total of the sums at the credit of those accounts) shall be divisible proportionately among the clients of the solicitor or, as the case may be, the incorporated practice according to the respective sums received by him in the course of his practice on their behalf or, as the case may be, by it on their behalf and remaining due by him or as the case may be, by it to them.
(2) The events to which subsection (1) applies are in relation to any solicitor—
(a) the sequestration of his estate;
(b) the granting by him of a trust deed for behoof of creditors;
(c) the appointment of a judicial factor on his estate.
(2A) The events to which subsection (1) applies are in relation to any incorporated practice—
(a) the making of an administration or winding-up order or the appointment of a provisional liquidator, liquidator, receiver or judicial factor; or
(b) the passing of a resolution for voluntary winding-up (other than one passed solely for the purposes of reconstruction or amalgamation with another incorporated practice).
(3) Where a solicitor or incorporated practice keeps an account at a bank in his, or as the case may be, its own name for a specified client no regard shall be had for the purposes of this section to the sum at the credit of that account or to any sums received by the solicitor in the course of his practice on behalf of that client or, as the case may be, by the incorporated practice on that behalf and remaining due by him or, as the case may be, by it to that client, so far as these are represented by the sum at the credit of that bank account; nor shall any regard be had for such purposes to any—
(a) deposit or share account with a building society; or
(b) account showing sums on loan to a local authority,
being in either case an account kept by the solicitor in his own name or, as the case may be, by the incorporated practice in its own name for a specified client.
(4) For the purposes of this section any reference to an account at a bank includes a reference to a deposit receipt at a bank.
Powers where inadequate professional services alleged
42A. (1) Where—
(a) the Council receive, from any person having an interest, a complaint that professional services provided by a solicitor in connection with any matter in which he has been instructed by a client were inadequate; and
(b) the Council, after inquiry and after giving the solicitor an opportunity to make representations, uphold the complaint,
they may take such of the steps mentioned in subsection (2) as they think fit.
(2) The steps referred to in subsection (1) are—
(a) to determine that the amount of the fees and outlays to which the solicitor shall be entitled for the services shall be—
(i) nil; or
(ii) such amount as the Council may specify in the determination, and to direct the solicitor to comply, or secure compliance, with such of the requirements set out in subsection (3) as appear to them to be necessary to give effect to the determination;
(b) to direct the solicitor to secure the rectification at his own expense of any such error, omission or other deficiency arising in connection with the services as the Council may specify;
(c) to direct the solicitor to take, at his own expense, such other action in the interests of the client as the Council may specify;
(d) to direct the solicitor to pay to the client by way of compensation
such sum, not exceeding £5,000, as the Council may specify.
(3) The requirements referred to in subsection (2)(a) are—
(a) to refund, whether wholly or to any specified extent, any amount already paid by or on behalf of the client in respect of the fees and outlays of the solicitor in connection with the services;
(b) to waive, whether wholly or to any specified extent, the right to recover those fees and outlays.
(4) Before making a determination in accordance with subsection (2)(a) the Council may submit the solicitor’s account for the fees and outlays to the Auditor of the Court of Session for taxation.
(5) Where a solicitor in respect of whom a complaint of inadequate professional services is made was, at the time when the services were provided, an employee of another solicitor, a direction under this section shall specify and apply to that other solicitor as well as the solicitor in respect of whom the complaint is made.
(6) The Council shall intimate a determination or direction made under this section to every solicitor specified in it by sending a copy of the determination or direction to him.
(7) A solicitor in respect of whom a determination or direction has been made under this section may, within 21 days of the date on which the determination or direction is intimated to him, appeal to the Tribunal against the determination or direction.
(8) In the foregoing provisions of this section-
“client”, in relation to any matter in which a solicitor has been instructed, includes
any person on whose behalf the person who gave the instructions was acting;
“complaint” includes a complaint of provision of inadequate professional services
remitted to the Council by the Tribunal under paragraph 8A of Schedule 4; and
“solicitor” includes-
(a) any solicitor, whether or not he had a practising certificate in force at the time of the provision of the professional services which are alleged to be inadequate, and notwithstanding that subsequent to that time he has had his name removed from or struck off the roll, ceased to practice or been suspended from practice;
(b) a firm of solicitors, whether or not, since the provision of the professional services which are alleged to be inadequate-
(i) there has been any change in the firm by the addition of a new partner or the death or resignation of an existing partner; or
(ii) the firm has ceased to practice; and
(c) an incorporated practice, whether or not, since the provision of the professional services which are alleged to be inadequate -
(i) there has been any change in the persons exercising the management and control of the practice; or
(ii) the practice has ceased to be recognised by virtue of section 34(1A) or has been wound up.
Inadequate professional services: Council’s powers to monitor compliance with directions
42B. (1) The Council shall, by notice in writing, require every solicitor specified in—
(a) a direction made under section 42A; or
(b) such a direction as confirmed or varied on appeal by -
(i) the Tribunal; or
(ii) the Court, to give, within such period being not less than 21 days as the notice may specify, an explanation of the steps which he has taken to comply with the direction.
(2) Where an appeal is made under subsection (7) of section 42A against a direction made under that section, any notice under subsection (1)(a) as above relating to that direction shall cease to have effect.
(3) Where an appeal is made by virtue of subsection (2) of section 53B against a decision of the Tribunal under subsection (1) of that section, any notice under subsection (1)(b)(i) above relating to the direction confirmed or varied by that decision shall cease to have effect.
(4) In this section “solicitor” has the same meaning as in section 42A(8).
Powers to examine documents and demand explanations in connection with complaints
42C. (1) Where the Council are satisfied that it is necessary for them to do so for the purpose of
investigating a complaint made to them or remitted to them by the Tribunal alleging—
(a) professional misconduct by a solicitor;
(b) the failure of an incorporated practice to comply with any provision of this Act or of rules made under this Act applicable to that practice; or
(c) the provision by a solicitor or an incorporated practice of inadequate professional services,
the Council may give notice in writing in accordance with subsection (2) to the solicitor or his firm or to the incorporated practice or, where the solicitor is an employee of a firm or of an incorporated practice, to his employer.
(2) A notice under subsection (1) may require—
(a) the production or delivery to any person appointed by the Council, at a time and place specified in the notice, of all documents to which this section applies which are in the possession or control of the solicitor, firm or incorporated practice and relate to the matters to which the complaint relates (whether or not they relate also to other matters); and
(b) an explanation, within such period, not being less than 21 days, as the notice may specify, from the solicitor, firm or incorporated practice regarding the matters to which the complaint relates.
(3) This section applies to the documents specified in section 38(2).
(4) Part II of Schedule 3 shall have effect in relation to the powers conferred by subsection (1) to require the production or delivery of documents as it has effect in relation to the powers conferred by section 38, but with the following modifications—
(a) for the references in that Part to section 38 there shall be substituted references to this section; and
(b) for the reference in paragraph 5(1) in that Part to a person failing to produce or deliver documents immediately on being required by the Council to do so there shall be substituted a reference to a person failing to produce or deliver the documents within the time specified in the notice under subsection (1) of this section.
