Debates — Legal Services Act

Committee stage in the Lords

06 Mar 200787 speechesView in Hansard ↗

The Parliamentary Under-Secretary of State, Department for Constitutional Affairs (Baroness Ashton of Upholland)My Lords, on behalf of my noble and learned friend Lord Falconer of Thoroton, I beg to move that the House do now again…
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The Parliamentary Under-Secretary of State, Department for Constitutional Affairs (Baroness Ashton of Upholland)Labour
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My Lords, on behalf of my noble and learned friend Lord Falconer of Thoroton, I beg to move that the House do now again resolve itself into Committee on this Bill. Moved accordingly, and, on Question, Motion agreed to. House in Committee accordingly. [The DEPUTY CHAIRMAN OF COMMITTEES (Lord Allenby of Megiddo) in the Chair.]
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Lord Maclennan of RogartI support the amendments proposed by the noble Lord, Lord Kingsland. It is clear that, despite the best efforts of ever…
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Lord Maclennan of RogartLiberal Democrat
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I support the amendments proposed by the noble Lord, Lord Kingsland. It is clear that, despite the best efforts of everyone in this Committee, the role of the Legal Services Board remains to be discharged in ways which will be judged by its performance, and we cannot entirely predict how it will satisfy those whom it seeks to regulate and the consumers whom it seeks to assist. The case for a general duty to consult is strong. It will enable the considerations which are unquestionably in the Government’s mind in bringing forward the legislation to be properly weighed and the views to be reacted to as they are forthcoming year on year. It is an admirably sensible proposal.
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Baroness Ashton of UphollandI agree with the noble Lords, Lord Kingsland and Lord Maclennan of Rogart, that it is essential that the board consults…
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Baroness Ashton of UphollandLabour
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I agree with the noble Lords, Lord Kingsland and Lord Maclennan of Rogart, that it is essential that the board consults on important points of policy and the framework under which it operates. The combination of the Bill and the regulatory best practice provides that the board will do so and that it must give sufficient regard to representations from consumers and practitioners. As the noble Lord, Lord Kingsland, said, Amendment No. 139FA duplicates the current provisions of the Bill, ensuring that the board makes arrangements to consult consumers. We think that, in Clauses 8 to 11, we already have the statutory duty to consult consumers which sets up and maintains the Consumer Panel. Clause 10, for example, obliges the board to consider representations made to it by the Consumer Panel. In accepting Amendment No. 38, we have accepted in principle that this requirement should apply also to representations from the approved regulators. As the noble Lord said in referring to Clause 49, the Bill also ensures that before a statement of policy is issued and before rules are made by the board, they must comply with the procedures in Clauses 49 and 195. Those provide that, “the Board must have regard to any representations duly made”. That is not limited to practitioners and consumers. It is a wider duty that encompasses other interested parties; for example, other regulators such as the Financial Services Authority which may wish to inform how the board develops its policies and procedures. Clause 6 refers to the annual report and, “the extent to which … the Board has met the regulatory objectives”, and the discharge of its functions. As we discussed, the Secretary of State must then lay the annual report before Parliament for scrutiny. That is another opportunity to provide ongoing transparency and accountability once the board’s policies are established. In particular, the board will need to consult the approved regulators and whoever else it feels is necessary to decide on its work plan for the coming year. Amendment No. 139FB seeks to create a statutory obligation for the board to consult in advance of setting its work plan for the year and specifically to consult on the degree to which the activities are appropriately targeted on areas giving rise to the greatest regulatory concern. Clause 3(3)(a) already obliges the board to have regard to the targeting of only those cases where action is needed. As I said, if an approved regulator or consumer has concerns about how the board’s plans will operate, they can make representation to the board. In addition, any allegations of unnecessary regulatory burdens will of course be open to parliamentary scrutiny. We think that we have captured what the noble Lord is seeking to do in the Bill. Perhaps he will reflect on the references that I have made between now and the next stage. Combined with good regulatory practice, there is nothing between us on what we are seeking to do. We believe that we have captured it in the Bill already. On that basis, I hope that he will withdraw the amendment.
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Baroness Ashton of UphollandI was saying under my breath that it is early in the day—hence the smiling. I was interested in what the noble Lord sai…
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Baroness Ashton of UphollandLabour
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I was saying under my breath that it is early in the day—hence the smiling. I was interested in what the noble Lord said. We will come on to talk about the levy issues in more detail, but, as I think I have said on every occasion that we have discussed the Bill, I am extremely interested in ensuring that we have the right safeguards in the Bill. Of course I will look at this. I can see what the noble Lord is seeking to achieve and why. I am beholden to him for that and I will look at the proposal carefully.
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Baroness Ashton of Uphollandmoved Amendment No. 139G:
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Baroness Ashton of UphollandLabour
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moved Amendment No. 139G:
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Lord Maclennan of RogartI support the noble Lord, Lord Kingsland, in his Amendment No. 139H and those associated with it in the group, which se…
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Lord Maclennan of RogartLiberal Democrat
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I support the noble Lord, Lord Kingsland, in his Amendment No. 139H and those associated with it in the group, which seek to ensure that the start-up costs of the Legal Services Board and the Office for Legal Complaints are not fully met by the professions, which would unquestionably be damaged by that. I strongly take the point made by the Bar Council of the potential impact on young barristers. It is not self-evidently true that those being regulated should bear the cost of regulation. Regulation is being introduced—not phased in over the period—to protect the public interest and, if the full costs of establishment are be met by the professions, there must be a concern that those costs would be lumped on to those who have to purchase the services of the professions. Such a concentration of the burden is unacceptable. It is desirable that these regulatory supervision changes are phased in as smoothly as possible, and thus become as acceptable as possible. It is unlikely that the PricewaterhouseCoopers regulatory impact assessment, which predicted an absence of increases in the number of complaints, will be met. That prediction is slightly surprising, given the extent of dissatisfaction with the existing complaints procedures and the probability that the failure of the present system has acted as a disincentive to pursuing existing courses. Consequently, we can anticipate that there will be somewhat increased costs, which I hope can be shared between the general public and the professions, if the amendment tabled by the noble Lord, Lord Kingsland, is accepted.
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Lord Campbell of AllowayI support the amendments, for the reasons given by my noble friend Lord Kingsland and the noble Lord, Lord Maclennan of…
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Lord Campbell of AllowayConservative
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I support the amendments, for the reasons given by my noble friend Lord Kingsland and the noble Lord, Lord Maclennan of Rogart. Basically, they are wholly requisite as a matter of due and fair administration according to the ordinary, accepted principles of justice.
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Lord Mackay of ClashfernIt is worth recalling that, in so far as cash burdens are imposed on the legal profession, these will be charges on acc…
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Lord Mackay of ClashfernConservative
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It is worth recalling that, in so far as cash burdens are imposed on the legal profession, these will be charges on access to justice for those who are consumers of legal services. That aspect of the matter must be borne in mind, particularly in relation to start-up costs. It is not very fair that a particular group should be penalised by having to bear the start-up costs of an enterprise that is quite large. Light touch it may be, but it is certainly not without pretty substantial costs. I venture to think that it is unlikely that the number of complaints dealt with by the system will remain constant in the years to come. In the years that have passed, the number of complaints has not been fixed, but has generally increased. If this system is as good as we hope it may be, it is highly likely that people who rightly or wrongly feel aggrieved will want to have recourse to it, whereas people in similar positions in the past may have felt that it was not worth embarking on the process. I am an honorary Bencher of the Inner Temple, but otherwise am completely unaffected by any of these proposals.
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Baroness Ashton of UphollandI am grateful to noble Lords for this very important debate on the levy. However, the Government begin by not accepting…
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Baroness Ashton of UphollandLabour
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I am grateful to noble Lords for this very important debate on the levy. However, the Government begin by not accepting that they should contribute to the establishment costs or running costs of the board and the OLC, as it has been said they should. I know what the noble Lord, Lord Kingsland, said about the Compensation Act, which I had the privilege to pilot through your Lordships’ House, and about the policy for which I was responsible. However, we were creating something entirely new; there had been nothing to base our policy on before. We believe that legal services providers enjoy exclusive access in the provision of reserved legal services, which can lead to them providing ancillary legal services. We hope and expect the profession will gain from the increased consumer confidence that these reforms will generate and that consumers will enjoy greater access to justice when things have gone wrong for them. We hold to the view that the costs should be met by the professions. Having said that as our backdrop principle, I understand the concerns that Members of the Committee have raised. The noble Lord, Lord Kingsland, in his previous amendment was worried that there should be a focus on how that cost would be contained and that it did not simply escalate. There is real critical importance in value for money being one of the core principles which must underpin the way in which the implementation process is managed and the future operation of the board and the OLC. We believe that the Bill builds in a number of safeguards to ensure this is the case. First, Clause 195 sets out in detail the consultation procedure that the board will have to follow when consulting on rules, including the levy rules. Secondly, Clause 166 prevents the board making levy rules except with the consent of the Lord Chancellor. Thirdly, as we will discuss in due course, following the report of the Delegated Powers Committee, I have brought forward amendments that will see the levy rules subject to parliamentary scrutiny through the negative resolution procedure. I hope that I may also offer reassurance to Members of the Committee in relation to establishment costs if I expand on how we anticipate that we will recover the costs incurred. As I have explained, while I believe it is appropriate that the costs should be met by the approved regulators, the mechanism through which this will happen is through the levy and until the board is appointed there can be no levy rules. Therefore, the Government will fund the costs of establishing the board and the OLC, and recover that expenditure once the board has been appointed and is in a position to make the levy rules. To minimise any potential pressure on approved regulators and their members, the recovery of this expenditure will be done on a phased basis rather than in a single year. I also want to reassure Members of the Committee that we will continue to involve stakeholders in the implementation process to ensure that they have the opportunity to input and to ensure transparency. On 15 March, my honourable colleague Bridget Prentice is meeting a variety of stakeholders to discuss implementation and how we will continue to engage with them as we take these issues forward. The third effect of this group of amendments would define in the Bill, as the noble Lord, Lord Kingsland, said, the fair principles. Amendment No. 142AA sets out to define “fair principles”. I could not agree more that it is very important that the board has regard to fair principles when apportioning the levy, which is why Clause 166 expressly includes this requirement. But I am not sure that I agree with the noble Lord that we can define them. We believe it is better that the board considers all appropriate factors and determines how a fair apportionment should be achieved. The Committee will know of my aversion to lists in principle, and to not being able to take into account factors that will at the time be very relevant, bearing in mind the numbers and size of regulators and so on. It is important that the board has the discretion to set out the factors it considers appropriate in its levy rules, which will be made by statutory instrument. The PricewaterhouseCoopers report began afresh with a bottoms-up approach. It did not seek to identify the processes already operating and to validate the cost of each activity. Instead, it built a completely new cost model for the OLC, which is important and entirely consistent with what we seek to achieve; namely, a wholly new organisation with new procedures, new processes and a new culture, which again we have debated in your Lordships’ House. My understanding is that it costed an increase of 25 per cent in the volume of complaints that the OLC might receive, but it also took into account that all authorised persons would have in-house complaints-handling arrangements. The aspiration is for that first port of call to successfully sort out the complaint before it needs to go on. Between now and the next stage, I am more than happy to set out in greater detail the costings included in the PricewaterhouseCoopers report and to answer any further questions that would be best dealt with in that way. But I go back to where I began, which is the principle we hold to as we believe it is right; it is not unprecedented, of course. The costs should be borne in the way I have set out, recognising fair principles and enabling phasing in so that the burden is reduced.
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Lord Campbell of AllowayThe noble Baroness has just dealt with the question of principle, but what is the justification for imposing a levy at…
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Lord Campbell of AllowayConservative
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The noble Baroness has just dealt with the question of principle, but what is the justification for imposing a levy at all? The Government want to introduce a regulatory system, but why should they impose a levy on those concerned rather than meet the costs themselves? Is this a sort of political justification to generate consumer confidence, or something like that? Can she deal with the justification for this?
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Baroness Ashton of UphollandI shall certainly seek to do that for the noble Lord. We have set up a system in response to a concern which noble Lord…
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Baroness Ashton of UphollandLabour
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I shall certainly seek to do that for the noble Lord. We have set up a system in response to a concern which noble Lords have also expressed: that the complaints system was not being handled effectively. Certainly, noble Lords have referred on more than one occasion in Committee to this as a real problem that they want to see addressed. It is a problem that has been recognised by the organisations concerned and indeed we have had many debates about whether we are simply building on what noble Lords felt could be considered to be failure rather than creating something new. We have responded to a problem. On top of that, we have to consider how best to provide an appropriate response, and who should pay. It is our view that a considered, phased approach of the kind I have identified is right. As I have already indicated, it is not unprecedented and it is an appropriate way of dealing with the issues here. We do not think that we should spend taxpayers’ money in this way. There are always competing priorities in government; in the end everything is political. We seek to do this in a right and appropriate manner to resolve an issue, and to make sure that we provide not only strong consumer confidence but a good service for practitioners and regulatory bodies. That is our principle. Noble Lords may choose to disagree with it, but that is where we stand.
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Lord Campbell of AllowayI do not disagree for that reason, but where is the problem to which the noble Baroness refers in the complaints mechan…
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Lord Campbell of AllowayConservative
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I do not disagree for that reason, but where is the problem to which the noble Baroness refers in the complaints mechanism of the Bar Council? We have a clean bill of health on this. What is the justification for it? I am speaking of what I know something about—the Bar Council. I do not know much about patent agents and so on, but I suppose there is no justification there. The only justification seems to be the mess the Law Society has made of its complaints procedure. Why should everybody else pay a levy because the Law Society complaints machinery is in a mess, if the Committee will forgive me for saying so?
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Baroness Ashton of UphollandWe have also debated at great length the whole question of delegation and I continue in my discussions with the Bar Cou…
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Baroness Ashton of UphollandLabour
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We have also debated at great length the whole question of delegation and I continue in my discussions with the Bar Council. I have sought not to get into a debate about who is better than whom percentage-wise. Lots of figures have been bandied about. I recognise the work of the Bar Council and the way in which it has handled complaints and I can probably reassure the noble Lord that, while it is not perfect in that regard, it does a pretty good job. I also recognise that there are more concerns regarding the Law Society, but it would be the first to acknowledge that. We have sought to provide something brand new: everyone will be brought into this regime. I know that for some that feels inappropriate and perhaps too much, but I hope that the noble Lord will look again at the principle which states that it is very important to regulate across the sector, and to do it properly.
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Baroness Ashton of UphollandI had guessed where this amendment might have come from. As the noble Lord has indicated, it is very similar to Amendme…
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Baroness Ashton of UphollandLabour
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I had guessed where this amendment might have come from. As the noble Lord has indicated, it is very similar to Amendment No. 33, which we debated on the second day in Committee. As I indicated then, I met the trademark attorneys and patent agents on 5 February, and was keen to listen to their concerns in respect of proportionality in the Bill, particularly in relation to the proportion of costs that falls upon small regulators. They were very keen to ensure that the Bill should not take a one-size-fits-all approach, and I agree completely with that. When we were talking about Amendment No. 33, the noble Lord referred to such considerations as the fact that the extent to which the board acts might discourage entry or retention in the regulated sector, and he returns to that theme again. I agreed then, and agree now, that some of those considerations are extremely sensible. I agreed during that debate that I would envisage the board considering such factors as the regulator’s resources, the effect of the fees, and the extent of entry or retention in the regulated sector—which, as the noble Lord has indicated, arise in this amendment. I disagree with the noble Lord on the setting out of those considerations in the Bill. If we look at the board’s duty under Clause 3 to act proportionately, and under Clause 166 to satisfy itself that the apportionment of the levy will be in accordance with fair principles, we have established, in both those clauses, principles that are not usually—in fact, I do not think they have ever been—defined elsewhere in legislation. We think those principles are established, and would inform the board and ensure that it took into account precisely the considerations the noble Lord has raised. I am also keen that the board is able to consider what is appropriate on a case-by-case basis. The trademark attorneys and patent agents felt strongly about that. I would be worried that setting out considerations in the Bill could restrict the ability of the board to consider factors that were appropriate in the particular circumstances that were being faced, if those had not been set out in the Bill. It could mean that the board felt pressure to consider what was in legislation before considering what was actually appropriate according to its rules. It is possible that the board might feel it could only consider what was prescribed in legislation, which would certainly not be in the interests of the bodies we are concerned about. We think it is right that the board has the discretion to set out the factors that are appropriate in its rules. Those will be made by statutory instrument, as I have already indicated, and they are covered by established principles. That does not take away from the validity of the concerns of the two bodies that have raised them, nor from our absolute desire to ensure that their concerns are met under the Bill.
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Lord Maclennan of RogartBefore the Minister sits down, would she clarify her last point? Is she saying that, although she does not think these…
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Lord Maclennan of RogartLiberal Democrat
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Before the Minister sits down, would she clarify her last point? Is she saying that, although she does not think these principles should be spelt out in the Bill, she would be quite content to see them spelt out in the statutory instrument?
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Baroness Ashton of UphollandI am saying, and I will reiterate it, that I do not want these considerations in the Bill, for the reasons I have given…
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Baroness Ashton of UphollandLabour
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I am saying, and I will reiterate it, that I do not want these considerations in the Bill, for the reasons I have given, but I think the issues that have been raised by the noble Lord, Lord Kingsland, are of genuine concern, and I would expect the board to take them into account. It will make its decision about how it wishes the rules to be, taking into account the issues that will have been raised with it, just as they have been raised with me and my honourable friend Bridget Prentice. The board will then set out the rules, which will come to your Lordships’ House and another place under a statutory instrument. I hope the noble Lord, Lord Maclennan of Rogart, will see that as a consequence those issues have been addressed. I was saying that from the Government’s perspective, these are issues of genuine concern that we accept need to be addressed properly. We will leave it up to the board how it does that.
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Baroness Ashton of UphollandThe noble Lord is far too clever for me. He will not be surprised that I will want to go away and think about that, for…
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Baroness Ashton of UphollandLabour
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The noble Lord is far too clever for me. He will not be surprised that I will want to go away and think about that, for all sorts of reasons. We are at one in making sure that these bodies continue to thrive. We are trying to work out the most appropriate way to achieve that. As ever, I will reflect on what the noble Lord has said.
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Lord Maclennan of RogartWe on these Benches take a broadly similar view to that enunciated by the noble Lord, Lord Kingsland. It is desirable t…
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Lord Maclennan of RogartLiberal Democrat
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We on these Benches take a broadly similar view to that enunciated by the noble Lord, Lord Kingsland. It is desirable that the work of the Legal Services Board should, as has been said in previous debates, be conducted with a light touch and not be inflated beyond the necessities of the discharge of its duties. The Government have subscribed to this view and no doubt have an interest in the underlying purposes of the legislation being met. But the Government’s continuing involvement in the scrutiny of what is being done would scarcely be more effectively ensured than if they are required, on behalf of the public, to make some contribution to the costs. If the costs became over-inflated because of a misdirection of the board’s activities, it would unquestionably be possible for the Government to enter into a dialogue directly about that. Candidly, I would welcome that. There is a lot in the Bill that gives the power—or, rather, the potentiality—to the Legal Services Board to outgrow the function that has been described in previous debates by the Minister. We have to avoid a propensity towards inflation of activity. A financial check of this kind is entirely justifiable as a matter of principle, since it is the public interest and that of the consumer generally which is benefiting from this important measure to sustain public satisfaction in the work of the legal professions and access to a proper complaints system. All these factors justify some involvement and spreading of the burden beyond those who are being regulated and those who are involved in complaints. We all have an interest in ensuring that this is done properly; we may all, at some time or another, have need of such a system. It is not just those who are availing themselves of it at the present who ought to be responsible for the present charges. For broad reasons of principle and for the practical reason of giving the Government a locus, which I do not doubt they would use, to oversee or at least keep an eye on the work of the Legal Services Board, I strongly support the amendment.
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Baroness Ashton of UphollandI agree with the remarks of the noble Lord, Lord Maclennan, about the importance of light-touch regulation. I agree tha…
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Baroness Ashton of UphollandLabour
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I agree with the remarks of the noble Lord, Lord Maclennan, about the importance of light-touch regulation. I agree that we need to ensure that there is not a propensity for the board to grow like Topsy; we must avoid inflation in the way that the noble Lord described. As I have said consistently throughout our proceedings, I will look again to ensure that we have recognised those issues properly. There are different models to choose from, and I guess that the Financial Reporting Council model applies in this case. I have also been looking at the models that support my case that such organisations should be paid for by the professions. I will not reiterate what I said about the benefits we believe there would be. The different models include the Financial Services Authority and the Financial Ombudsman Service, which is funded entirely by the financial sector. The pensions regulator is also entirely funded by the industry. The funding of Ofcom is split 45 per cent and 55 per cent, while two-thirds of the Financial Reporting Council’s funding comes from the sector it regulates. There are different reasons why the funding regimes have been set up in this way. The Council for Healthcare Regulatory Excellence, which has been quoted, is required to be seen to be completely independent of the medical professions. That is why it is funded in that way. There are lots of different models. In choosing what to do, the Government have to be mindful of the variety of models and mindful of what they are seeking to achieve.
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Baroness Carnegy of LourCan the Minister tell the Committee, from her examination of the comparisons, what differences between the accountancy…
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Baroness Carnegy of LourConservative
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Can the Minister tell the Committee, from her examination of the comparisons, what differences between the accountancy profession and the legal profession make the arrangements different?
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Baroness Ashton of UphollandAs I indicated to the noble Lord, Lord Kingsland, I think that the best way of tackling the accountancy issues he raise…
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Baroness Ashton of UphollandLabour
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As I indicated to the noble Lord, Lord Kingsland, I think that the best way of tackling the accountancy issues he raised would be to set out in a letter before the next stage the details of our comparators and figures. I think it would help the Committee to have the PricewaterhouseCoopers assumptions and the way that it approached the issue. I would like to do that. I think that I would do a much better job by doing that than by trying to tackle the subject in the Committee this evening.
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Baroness Ashton of UphollandI was trying to demonstrate the different financial systems that have been set up and the reasons why they were set up…
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Baroness Ashton of UphollandLabour
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I was trying to demonstrate the different financial systems that have been set up and the reasons why they were set up in that way. I am told that there are very particular reasons why the Healthcare Commission had to be that way. The independence of the medical profession in this context is not exactly the same as the independence of the legal profession in the context of the LSB. Of course, I will write to the noble Lord and spell that out properly.
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Baroness Ashton of UphollandI am grateful to the noble Lord for explaining the purpose behind the amendment so succinctly. I understand why he has…
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Baroness Ashton of UphollandLabour
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I am grateful to the noble Lord for explaining the purpose behind the amendment so succinctly. I understand why he has picked out shareholders specifically in connection with shareholding in ABS companies, ensuring that the involvement of non-lawyer directors does not jeopardise professional duties. I agree entirely with his objective. In creating new opportunities to deliver legal services, we must make it clear and beyond doubt that professional duties must apply in the same way as they always have done. This is the key purpose of Clause 169; it places lawyers’ duty to comply with regulatory arrangements on a statutory footing. This duty will cover all professional conduct rules and apply not only to individual lawyers but to all companies and firms providing legal services and to all managers and employees of these providers. Moreover, Clause 88 provides further protection. This clause ensures that if a non-lawyer partner, director, shareholder or employee acts in a way that causes or contributes to a breach of professional duties by the firm or its lawyers, that person will be breaking the law. Non-lawyer directors, partners and shareholders may be disciplined by licensing authorities as a result, and may lose any rights to hold shares in the ABS firm, as provided for by Schedules 11 and 13 to the Bill. While I agree entirely with what the noble Lord seeks to do, we believe that his amendment is unnecessary, as the Bill already prevents ABS firms and their shareholders or anyone who owes duties to shareholders from acting in a way that conflicts with lawyers’ professional conduct rules. Further, a director of a company could not in good faith argue that to break the law as it applied to his firm was to act in the interests of the company and its shareholders. That applies as much to a licensed ABS body, with its particular legal obligations, as to any other. If a company is authorised to undertake only certain activities by being licensed and the terms of the licence require particular forms of behaviour, including compliance with regulatory arrangements, that behaviour is something that all shareholders must accept and support as well. I would not wish, by virtue of a provision such as the one proposed here, to cast general doubt on the continuing validity of obligations owed under other law, when it is clear already from the Bill that this will not be able to operate to adversely affect the ability of regulated persons to comply with regulatory arrangements. In other words, as long as we make it clear in the Bill that there is a statutory duty to comply with professional conduct rules, there is no need for an override provision. On that basis, I hope that the noble Lord will withdraw his amendment.
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Baroness Ashton of UphollandI am again grateful to the noble Lord for explaining what he is seeking to do. I shall try to explain the approach that…
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Baroness Ashton of UphollandLabour
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I am again grateful to the noble Lord for explaining what he is seeking to do. I shall try to explain the approach that we have taken and the purpose behind these clauses. We begin from the principle that the new regulatory framework applies to each of the approved regulators and to their regulatory arrangements. As the body that is responsible for adjudicating breaches of the Law Society’s rules of professional conduct, it is essential that the SDT is part of that new framework. Clause 171 brings the Solicitors Disciplinary Tribunal within the oversight of the Legal Services Board for the purposes of any changes to its rules that it seeks to make. Noble Lords will be aware that under Section 46(9) of the Solicitors Act, rules made by the tribunal about its practice and procedures must be agreed by the Master of the Rolls. This clause provides that in the future alterations in the tribunal’s rules will require the agreement of the Legal Services Board instead. This is in line with a number of other changes we have made in the Bill to the current functions of the Master of the Rolls in relation to the solicitors’ profession, the approval of their professional rules and appeals from the SDT. It is important to emphasise that the Solicitors Disciplinary Tribunal is a fully independent body. This clause simply brings the tribunal, which is part of the arrangements for regulating lawyers, within the oversight of the LSB. It does not make it an approved regulator. Initially the Joint Committee on Human Rights had some concerns about the impact of this change on the compatibility of the SDT with Article 6(1) of the European Convention on Human Rights. However, in its latest report the Joint Committee now agrees that the transfer of responsibility for rule approval from the Master of the Rolls to the LSB is unlikely to lead to any significant risk of incompatibility with Article 6(1). As the noble Lord said, Clause 172 allows for the LSB in restricted circumstances to make a direction. It is important that it has this power, which I emphasise is limited in that it can be used only where the SDT is failing to perform its functions to an adequate standard, or at all—for example, dealing with cases unreasonably slowly. The LSB can direct the SDT only to take such steps as are necessary to remedy the failure. The LSB cannot interfere with the determination of any individual case. It is, if you like, a backstop power. Any direction by the LSB under Clause 31 is subject to the procedure and preconditions in Schedule 7, which include the requirement for the board to obtain the advice of the Lord Chief Justice, whose view in relation to the effect of any direction on the independence and impartiality of the SDT will be of great importance. I would be concerned if there was no high-level oversight over the way in which the SDT operates, not in the determination of individual cases but if the tribunal is failing in its functions. For example, if it is operating in a completely inefficient way and is failing to get through cases within a reasonable time as required by Article 6 of the European convention, it must be absolutely clear that the LSB can step in and direct it to remedy the failure. Without this clause nobody will have that power. As I said, the SDT will continue to operate as a self-governing entity. Indeed, the Bill reinforces that independence, giving it greater administrative independence by making clear that it can set its own budget. The LSB will have a role in approving that budget. Our intention here is to allow for the possibility—it is important to emphasise that it is just a possibility, and a rather distant one at that—that if it were failing, the LSB may direct it to take steps. I do not believe that this power limits its status as an independent and impartial tribunal. Clause 173 allows for modifications to be made to its functions by order rather than requiring primary legislation. I would not want there to be any suspicion that this seeks to fetter its independence. I make it absolutely clear at the outset that the modifications to its functions can be made only with its consent—Clause 69 as modified by Clause 173. Nothing can be forced on the tribunal. Therefore, I am confident that its independence will not be compromised by this clause and, as I said, so is the Joint Committee on Human Rights. Currently, changes to the tribunal’s functions have to be made by primary legislation, which does not give it the necessary flexibility. The intention behind this power is to ensure that it is able to modify its functions as quickly and efficiently as possible to reflect changes in the market for legal services and, as a result, in the jurisdiction it may have to exercise. For example, changes under the new ABS regime may occur quickly and it may need to make relatively quick modifications to its statutory functions to address these changes. The clause allows the modifications to be achieved through a recommendation by the LSB to the Lord Chancellor and with the consent of the tribunal. The modification is then made by order. The order can be made only in the same form as that recommended. The clause will allow the SDT to propose modifications of its functions to the Legal Services Board. The LSB is not bound to accept them, but there is clear benefit in the tribunal being able to make these changes by other means than primary legislation. A further insurance against interference is that modifications can be made only for the purpose of enabling the tribunal to perform its role more effectively and efficiently. The tribunal will be the judge of that. I reiterate that it will remain an independent tribunal. Modifications will be made only with its consent. I hope that gives the reassurance that the noble Lord seeks and that he will feel able to withdraw the amendment.
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Baroness Ashton of UphollandI hear what the noble Lord is saying and I need to take more advice on that. I recognise that he is seeking not to have…
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Baroness Ashton of UphollandLabour
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I hear what the noble Lord is saying and I need to take more advice on that. I recognise that he is seeking not to have interference, as suggested initially by the Joint Committee, and to ensure that the tribunal is independent in the way that it makes its decisions. We believe that we have captured that but, as ever, I shall look at the matter. Our proposals are based on what Sir David Clementi said originally, which aimed to ensure that there was a process in place—and we have moved off the Master of the Rolls for the reasons that I have given—in which there would be an opportunity to review the way that the tribunal operated by itself. There would be a process, but I shall reflect on what the noble Lord has said.
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Baroness Ashton of UphollandI was not going to reflect on that—that discussion has taken place and the Master of the Rolls is content. As I have in…
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Baroness Ashton of UphollandLabour
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I was not going to reflect on that—that discussion has taken place and the Master of the Rolls is content. As I have indicated, the Lord Chief Justice plays a role in giving advice. We want the consistency of the Legal Services Board in taking this forward. There is no difficulty with that. I understand the reassurances that the tribunal is seeking, and I hope that on reflection it will feel more reassured, but we will continue that dialogue for the reasons given by the noble Lord.
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Baroness Ashton of UphollandThis amendment is the first of a number of amendments proposed to Schedule 16, on an issue on which the Law Society has…
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Baroness Ashton of UphollandLabour
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This amendment is the first of a number of amendments proposed to Schedule 16, on an issue on which the Law Society has been very much engaged to ensure that we have effective regulation. Although we agree that some changes may be necessary, we are not persuaded that we should accept the amendment. If persons who had qualified and enrolled as solicitors were seeking to avoid regulation when carrying out reserved legal activities because they had been employed under an alternative job description, they would be guilty of the offence of carrying on a reserved legal activity when not entitled, which is provided for at Clause 14. The amendment goes further, as the noble Lord said, in that it relates to the provision of legal services, not reserved legal services. We have no evidence to suggest that persons providing legal services should be under any greater statutory duty to hold a practising certificate than other legal professionals simply because they may have once been enrolled and admitted as solicitors. If they are not carrying out reserved legal activities and not using the title “solicitor” or any other restricted term, they are not required to be authorised by an approved regulator to carry out the services that they provide. Of course, the Bill captures persons who carry out reserved legal activities when not entitled to do so and persons who pretend to be so entitled when they are not, under the offences in Clauses 14 and 16. However, this is important in relation to reserved legal activities, where there is a greater regulatory risk. Clause 1A of the Solicitors Act 1974 ensures that persons who have been admitted and enrolled as solicitors and are employed as solicitors must hold practising certificates. However, firms may choose to employ people who are not qualified lawyers, but who nevertheless can provide them with the sort of general advice that they require. Provided no reserved legal activity is involved, I do not see why we should treat persons who may have once qualified as a lawyer any differently from any other person who may provide general advice to their employer. Decisions such as these are purely business decisions for the organisations and individuals concerned. If we see evidence to the contrary, Clause 68 gives the board power to make appropriate recommendations. As we do not have any evidence at this point to suggest it is an issue, I hope that the noble Lord will withdraw the amendment.
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Baroness Ashton of UphollandEvidence is quite central. I was trying to make the distinction about the desire to regulate reserved legal activities…
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Baroness Ashton of UphollandLabour
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Evidence is quite central. I was trying to make the distinction about the desire to regulate reserved legal activities where we think it is very important. The noble Lord may feel I am doing it without evidence, but it is important that we capture and cover very particular reserved legal activities. The point I was making was that we have not seen anything from the Law Society, if it has such evidence. The Bill makes provision for us to pick this up and deal with it. I was trying to be helpful with my use of the word “evidence”. We have referred to this a number of times in our deliberations about, for example, areas that we might consider regulating. We have considered voluntary issues too, but if the need arises we have the power in the Bill to make recommendations to tackle that. Let us see what the evidence brings forward.
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Baroness HamweeI feel somewhat embarrassed at intervening, having had nothing to do with this Bill so far. As a solicitor—perhaps that…
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Baroness HamweeLiberal Democrat
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I feel somewhat embarrassed at intervening, having had nothing to do with this Bill so far. As a solicitor—perhaps that does not distinguish me too much from other noble Lords who have taken part—holding a practising certificate, I declare that interest. The main issue must be one of insurance, and I wonder if I could put that into the mix.
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Baroness Ashton of UphollandI am grateful to the noble Baroness. I do not know if that is the main issue, but when we have discussions on this I sh…
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Baroness Ashton of UphollandLabour
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I am grateful to the noble Baroness. I do not know if that is the main issue, but when we have discussions on this I shall copy her into our thinking on it.
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Lord Thomas of GresfordWe must be grateful to the noble Lord, Lord Kingsland, for his exposition, which has made clear many things that did no…
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Lord Thomas of GresfordLiberal Democrat
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We must be grateful to the noble Lord, Lord Kingsland, for his exposition, which has made clear many things that did not seem very clear when I first looked at the amendments. There is a great deal of meat in them. I suggest that the Minister takes them away and considers in detail how they may best be incorporated into the Bill.
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Baroness Ashton of UphollandI, too, am grateful to the noble Lord, Lord Kingsland, for going through the amendments in detail. I smile at the noble…
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Baroness Ashton of UphollandLabour
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I, too, am grateful to the noble Lord, Lord Kingsland, for going through the amendments in detail. I smile at the noble Lord, Lord Thomas of Gresford—it is a pleasure to see him joining us for the next part of the Bill. I will resist the temptation to reply to each of the amendments; I am sure that noble Lords will be grateful for that. We have been working closely with the Law Society and, in particular, representatives from the Solicitors Regulation Authority to update and modernise the powers in the Solicitors Act 1974. Schedule 16 already sets out a large number of amendments to the 1974 Act, which are necessary to ensure that the Law Society is sufficiently equipped to carry out its role as approved regulator under the new framework in the Bill. We accept that many of the amendments in this group seek to correct a number of anomalies that have arisen as a result of the changes that we have already made under Schedule 16. In addition, they make a number of alterations that are consistent with the powers conferred on the Law Society under the 1974 Act, as amended by Schedule 16. However, there are matters of detail that we need to resolve in discussions with the Law Society and the noble Lord, Lord Kingsland. I would be more than happy to accept the suggestion of the noble Lord, Lord Thomas of Gresford, and take the amendments away to consider them further—and to do so in a positive and helpful light. I hope that that will make up for the noble Lord having to read out his speech on the amendments and that he will be happy with what I have done.
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Baroness Ashton of UphollandI am grateful to the noble Lord for discussing the amendments in detail. My concern is about extending the period; I wo…
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Baroness Ashton of UphollandLabour
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I am grateful to the noble Lord for discussing the amendments in detail. My concern is about extending the period; I would not want to reduce incentives to try to tackle cases quickly and efficiently. Suspension prevents a solicitor from practising. It is important that determinations are made as swiftly as possible. I do not suggest that this would be a deliberate move, but there is always the possibility that if you have a longer period, people will take longer to reach a decision. I absolutely accept what the noble Lord said about serious and complex cases; he gave examples. I am not persuaded that an additional six months is required but I would welcome evidence—I am afraid that I am back to my evidence. If we could find more detailed evidence of the type of difficulties that are caused by having only the 12-month suspension period, I would be more than happy to look at this again in light of the noble Lord’s comments and come back to the issue if there was clearly a real need for a review. I can see exactly what the noble Lord is saying but we need more detail about the cases involved and so on; then I will come back on this. We should also bear in mind what I said about not wanting simply to extend and thereby perhaps create a different problem for those who have been suspended. I hope that the noble Lord will feel comfortable in withdrawing the amendment on that basis. I shall come back on this.
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Lord Clinton-DavisI am delighted to hear my noble friend agree to reconsider this issue. I strongly believe that six months is inappropri…
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Lord Clinton-DavisLabour
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I am delighted to hear my noble friend agree to reconsider this issue. I strongly believe that six months is inappropriate and I entirely agree with the arguments adduced by the noble Lord, Lord Kingsland. My noble friend should receive representations from the Law Society.
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Baroness Ashton of UphollandPrecisely; we will discuss this with the Law Society. I do not promise to make the changes but I promise to have the co…
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Baroness Ashton of UphollandLabour
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Precisely; we will discuss this with the Law Society. I do not promise to make the changes but I promise to have the conversation and see what evidence there is and what might be done, if action is necessary, on the basis of what the noble Lord said were the problems.
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Lord Clinton-DavisWould the noble Lord be prepared to accept an amendment that said that the normal rule should be six months but that wh…
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Lord Clinton-DavisLabour
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Would the noble Lord be prepared to accept an amendment that said that the normal rule should be six months but that where appropriate that could be extended?
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Baroness Ashton of UphollandAgain, I am grateful to the noble Lord for raising this issue. I know that the Law Society has raised concerns about th…
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Baroness Ashton of UphollandLabour
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Again, I am grateful to the noble Lord for raising this issue. I know that the Law Society has raised concerns about the inclusion of the word “hardship”, and I imagine that that has prompted the amendment. Our purpose in Schedule 16 was to give the Law Society a greater degree of flexibility by establishing a compensation scheme with a greater emphasis on rule-making powers rather than statute-based powers. The flexibility that we are searching for would allow the Law Society to make rules about how moneys for the fund are collected and how, and in what circumstances, payments can be made out of the fund to those who have suffered loss. It says in my note—I cannot resist reading it out—that we accept that the way in which we sought to achieve this increased flexibility may have made it more difficult to understand how the compensation fund is expected to work. I absolutely understand what the noble Lord is seeking to do. Perhaps I may take this matter away and discuss it further with the Law Society. My intention will be, as with the version already contained in Schedule 16, to give the Law Society greater flexibility in how it administers and operates the compensation fund arrangements but to try to make those arrangements more straightforward. That is what I shall seek to achieve in my discussions with the Law Society and I shall come back to your Lordships on that point.
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Baroness Ashton of UphollandI am extremely grateful to the noble Lord for dealing so succinctly with this huge group of amendments, and for the way…
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Baroness Ashton of UphollandLabour
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I am extremely grateful to the noble Lord for dealing so succinctly with this huge group of amendments, and for the way in which he was able to read out all the numbers. I am sure that I could not emulate him. I shall again resist the temptation to go through each amendment. Schedule 16 already extends the Law Society’s powers for the purpose that the noble Lord has indicated, and these further amendments build on that. The most specific changes are to ensure that there are no potential gaps in the Law Society’s powers to regulate different types of practice, including legal disciplinary practices, according to risk-based principles. In particular, the Law Society is seeking powers to ensure that all types of entity through which solicitors practise, including sole practitioner firms and partnerships, must be regulated as practices and not just through the individual lawyers within them. Although many of the outcomes of the amendments appear justifiable, I can see that some of the proposed changes are quite complex. We will have to look at them and subject them to detailed analysis. The Government do not object to the principle of the amendments. However, I will need to take them away and consider them carefully, particularly if there are complicating factors as we work through them. On that basis, I trust that the noble Lord will be happy to withdraw the amendment.
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Baroness Carnegy of LourDid the Law Society see the Bill before it was published? It seems extraordinary that Parliament has to look at redraft…
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Baroness Carnegy of LourConservative
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Did the Law Society see the Bill before it was published? It seems extraordinary that Parliament has to look at redrafting details that the Law Society spots are necessary simply to go on doing what it does or to make the alterations that the Government want. Did the Government talk to the Law Society late in the proceedings before the Bill was published?
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Baroness Ashton of UphollandThe Government have been talking to the Law Society throughout as we have put the Bill together. What looked like huge…
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Baroness Ashton of UphollandLabour
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The Government have been talking to the Law Society throughout as we have put the Bill together. What looked like huge numbers of amendments were actually small, detailed changes. As the Bill goes through Committee stage in the first House, as it were, it is right and proper that we should listen to what organisations and noble Lords say about how to make it better. Although there is nothing wrong with Schedule 16, I genuinely believe that if we get suggestions to make it even better, even though we have had dialogue all the way through, we should look at those suggestions properly. It is part of the ongoing dialogue. When our proposals are introduced, I hope that noble Lords will agree that, although the amendments look huge, they are actually small, technical changes. But they do make a difference and I think that it is right to respond to them. I am grateful to the noble Lord, Lord Kingsland, for championing them.
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Lord Evans of Temple GuitingThis may be a convenient moment for the Committee to adjourn for 20 minutes. I beg to move that the Committee do now ad…
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Lord Evans of Temple GuitingLabour
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This may be a convenient moment for the Committee to adjourn for 20 minutes. I beg to move that the Committee do now adjourn until 7.35 pm. Moved accordingly, and, on Question, Motion agreed to. [The Sitting was suspended from 7.15 to 7.35 pm.] [Amendment No. 149ZP not moved.]
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Baroness Ashton of UphollandI am grateful to the noble Lord, Lord Kingsland, for raising these issues. We recognised that the powers to require inf…
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Baroness Ashton of UphollandLabour
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I am grateful to the noble Lord, Lord Kingsland, for raising these issues. We recognised that the powers to require information currently contained in Section 44B of the Solicitors Act 1974 may indeed need to be revised in some way. We have some concerns; for example, the definition of third party is drafted very widely and may subject more people to the statutory obligation to disclose information than may be desirable or appropriate for the purposes of effective regulation. We would like to take the amendment away and consider it further with the Law Society and with the noble Lord, Lord Kingsland. Amendment No. 149B does two things. First, it allows the Law Society the power to require production of confidential or privileged information. We do not accept that because there are real sensitivities in relation to allowing a regulator to override professional privilege or have unfettered access to material of a confidential nature in the way proposed. At this stage, we are not persuaded that the Law Society has made the case for this power. Secondly, the amendment provides for an enforcement provision where production of information has been compelled under Section 44B of the 1974 Act, as amended. That would be achieved by the insertion into that Act of a new Section 44E. We think that there needs to be an appropriate enforcement mechanism for any new power to require information. Section 44E also requires more detailed scrutiny of the new offence that the Law Society has suggested. For that reason, I would like to take away that part of Amendment No. 149B, as well as Amendment No. 149A, continue our discussions with the Law Society and come back to the House at the next stage.
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Baroness Ashton of UphollandI am again grateful to the noble Lord, and I will be brief. We want to consider the amendments. I understand why the La…
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Baroness Ashton of UphollandLabour
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I am again grateful to the noble Lord, and I will be brief. We want to consider the amendments. I understand why the Law Society may wish to have statutory powers to rebuke, reprimand or fine a solicitor, but I am concerned to ensure that we have fully considered the implications in relation to the Law Society’s power to fine, rebuke and reprimand before I agree to take forward amendments similar to those proposed. I want to think a bit more about the circumstances in which a fine or rebuke might be issued, the rights of appeal that could be available to solicitors and the maximum level of financial penalty. Provided that noble Lords are content and that the noble Lord, Lord Kingsland, is happy, I shall take these amendments away, consider them further and return to the issue on Report.
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Baroness Ashton of UphollandI am grateful to the noble Lord. The provisions we have set out in paragraph 43 of Schedule 16 are intended to give the…
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Baroness Ashton of UphollandLabour
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I am grateful to the noble Lord. The provisions we have set out in paragraph 43 of Schedule 16 are intended to give the Solicitors Disciplinary Tribunal clear financial independence from the Law Society for the first time by providing that it sets its own budget. I know that this is of great importance to the tribunal. It is envisaged that it will in future be demonstrably independent of the Law Society in administration as well as in functions. The provisions that we have already drafted are intended to achieve that. It is important that we get the drafting of the funding provisions right, and I listened very carefully to what the noble Lord said. Amendment No. 150 reduces the Legal Services Board’s oversight of the budget to a minimal level by removing the need for approval of the budget at all, as long as it is no more than 5 per cent greater than the previous budget. The LSB’s formal approval is required only for increases of above 5 per cent. It is quite possible that the tribunal’s workload may reduce over time, and in those circumstances any increase or, indeed, maintenance of the status quo in the budget might not be appropriate. For that reason, and because the noble Lord’s amendment would in theory allow for automatic increases—if he gets what I mean by that—quite possibly above inflation each year, that is not the approach that we should take. In practice, we would expect the approval of the budget to be a relatively straightforward process. We do not expect it to be particularly onerous for the Legal Services Board or for the tribunal. The amendment also seeks to make it clear that the Law Society collects money to meet the tribunal’s budget from each of its individual members as agent for the SDT, and that it must collect that money only from individual solicitors and only as a separately identified element of the fee of each solicitor’s practising certificate. I am not convinced that that is necessary or appropriate. The Law Society and other approved regulators will collect money from their members for a number of different purposes. It is fair to leave it to the approved regulators to decide how to apportion those sums, and I would resist calls to place a statutory requirement for an approved regulator to set out the exact sums required for each of those elements. That would, in practice, cause the Law Society some real difficulties. It will be normal practice for the Law Society to identify to its members the main elements of the practising certificate fee, but I would be concerned about requiring that in statute. As to how the tribunal will organise its administrative affairs once it has the guaranteed financial independence offered by the new section, it is eminently sensible that the tribunal puts in place effective arrangements for running itself administratively. I consider that the tribunal will have sufficient power within the Bill to do so, so I am not persuaded that we need an explicit reference to setting itself up as a company limited by guarantee. However, I would be prepared to consider that point further in the light of further discussion with the noble Lord, the Law Society and the tribunal. We want to ensure that the tribunal is independent and has the ability to be demonstrably administratively independent from the Law Society. We have sought to achieve that through the wording in the Bill. I hope that I have given some reassurances on that point. On the basis that I will consider the point about the company, I hope that the noble Lord feels able to withdraw his amendment.
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Baroness Ashton of UphollandOnce again, I am grateful to the noble Lord, Lord Kingsland, for explaining the detail behind the amendments. We have d…
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Baroness Ashton of UphollandLabour
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Once again, I am grateful to the noble Lord, Lord Kingsland, for explaining the detail behind the amendments. We have discussed a number of groups of amendments around Schedule 16. The purpose of Schedule 16 is, in part, to extend the Law Society’s intervention powers. These amendments build on the changes that have already been made. They would allow the Law Society, as the noble Lord said, to intervene in all cases where dishonesty is suspected or where practices have been abandoned by more than one of the principals, but they would also lower the threshold of steps that must be taken to try to trace the beneficiaries of any funds recovered on intervention. For the most part, these amendments are justifiable and in the interests of effective regulation. Therefore, I am extremely content to consider them—with one exception. I am not at the moment minded to accept the elements of Amendments Nos. 150ZB and 150Q. These are the elements that allow the Law Society to intervene in cases of a solicitor’s failure to properly attend to a practice. It is too vague a threshold for the exercise of intervention powers. We will need to consider that more, but I want to flag up those areas to the noble Lord as ones that at the moment I am not persuaded on. The others I am very happy to take away and consider. Obviously, we will talk to the Law Society about them.
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Baroness Butler-SlossI endorse and unreservedly support what the noble Lord, Lord Kingsland, has said. I declare an interest as a former Tre…
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Baroness Butler-SlossCrossbench
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I endorse and unreservedly support what the noble Lord, Lord Kingsland, has said. I declare an interest as a former Treasurer of the Inner Temple. Having been a Treasurer and a Bencher of that Inn for many years, and having engaged from time to time in the education of students and young barristers, I can attest to the fact that the Inner Temple and the other three Inns do exactly the same work in relation to education, although each of us, rather like schools, is proud of our individuality. The important thing is that we treat education as incredibly important. As the noble Lord, Lord Kingsland, has said, more than £6 million a year is spent from money gathered from members of the Bar in the Inns, and from generous donations from those who have been barristers or judges, to train and teach particularly advocacy to those who will be barristers. We in the Inns consider it to be of the utmost importance that those who will be barristers should be able to provide the best possible service to the public. We are very supportive of continuing training, some of which is done in the Inns and some of which is done at the Bar. The whole purpose of the proposed new clause would fill an undoubted gap in the Bill, which was met by the previous Acts of 1990 and 1999 that the noble Lord, Lord Kingsland, mentioned. If the Government do not put this into the Bill, they will lose something that is of incalculable value to the public. That is the important thing. It is not important to the lawyers; we do not exist just to enjoy ourselves and eat dinners, which we can eat here in the Lords if the House gives us time to do so. The primary importance of the Inns of Court is the education of those who will be in the firing line in the courts, providing the important service that they are peculiarly well trained to provide; that is, to represent the public. I therefore unreservedly support what the noble Lord, Lord Kingsland, said, and would like to hear words of comfort from the Minister.
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Lord BorrieI declare an interest as a Master of the Bench of the Middle Temple; that is, I am a member of the governing body of my…
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Lord BorrieLabour
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I declare an interest as a Master of the Bench of the Middle Temple; that is, I am a member of the governing body of my Inn of the Court. In the past, I have acted as chair of the scholarships committee, which has a significant educational role. It is well known that although the four Inns of Court, about which my noble and learned friend Lady Butler-Sloss has spoken, admit people to be student members and in due course may call them to the Bar as junior barristers, they have delegated many of their traditional educational functions to the universities and central bodies, such as the Inns of Court School of Law, for the study of legal subjects and of course the passing of examinations. Nevertheless, I agree with my noble and learned friend Lady Butler-Sloss. The Inns retain a number of key educational functions, including the grant of scholarships and other awards that are vital to making it possible for many students, especially those from poorer families, to undergo their legal education. The Inns also provide well stocked libraries, social opportunities to enable students to meet barristers and judges, mentoring through sponsorship schemes of individual students and, increasingly in recent years, the provision of practical training in advocacy and guidance in obtaining places as pupils with practising barristers. The Inns of Court are also involved with the continuing education of barristers after they have been called to the Bar. Between them, the Inns have, I believe, about 500 volunteer advocacy trainers comprising judges and senior barristers. I support Amendment No. 151 in the name of the noble Lord, Lord Kingsland, which is designed to give formal recognition in the Bill to the role of the Inns of Court in calling to the Bar those who exercise the “reserved legal activity”, as described in Clause 12, of the exercise of certain rights of audience in the courts. The public interest, with which we are all concerned, and public confidence in high-quality service provided by barristers would be underlined by this formal recognition proposed by Amendment No. 151 of the role of the Inns of Court.
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Lord Neill of BladenI support what has just been said by the noble and learned Baroness, Lady Butler-Sloss, and the noble Lord, Lord Borrie…
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Lord Neill of BladenCrossbench
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I support what has just been said by the noble and learned Baroness, Lady Butler-Sloss, and the noble Lord, Lord Borrie. Two Inns have now been covered. I represent a third Inn and I declare that I am a practising barrister called to the Bar by Gray’s Inn where in my time I had the honour to be the Treasurer. I confirm what they say about the teaching role of the Inns and very much hope that the Minister will be able to accept the amendment or at least give us some encouragement. Members of the Committee will probably recall that Blackstone described the Inns of Court as the third university—they will be able to guess the other two. I am not sure that I would put it quite as high as that today, but the educational role is still extremely strong, particularly in the training of advocates. There has been a resurgence in that over the past 15 to 20 years and a very striking demonstration of the Inns performing their old function up to the hilt. I hope that this amendment will find favour.
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Lord Thomas of GresfordI am sorry that representation for Lincoln’s Inn is missing—because I declare an interest as a bencher at Gray’s Inn. A…
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Lord Thomas of GresfordLiberal Democrat
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I am sorry that representation for Lincoln’s Inn is missing—because I declare an interest as a bencher at Gray’s Inn. A lot has been said about education, but it is much more important than that and I do not think that the general public understand. As I declared to Members of the Committee earlier in Committee, I started my career as a solicitor. For a long time I was in favour of a fused profession. Then I began to realise as a solicitor in a small country practice the value of the divided profession which gave the solicitor, however humble—I was pretty humble—access to the greatest legal expertise there could be through the system that we have.
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Baroness Ashton of UphollandThat was the most animated debate we have had today. I still struggle with what a bencher is, never mind what a Master…
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Baroness Ashton of UphollandLabour
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That was the most animated debate we have had today. I still struggle with what a bencher is, never mind what a Master of the Bench would be. I quite fancy the dining—perhaps that should be my research project between now and Report
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Lord Thomas of GresfordI think that the noble Baroness has just invited herself to four Inns of Court.
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Lord Thomas of GresfordLiberal Democrat
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I think that the noble Baroness has just invited herself to four Inns of Court.
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Baroness Ashton of UphollandI hope that the noble Lord can organise it. I completely recognise the strength of feeling about the role of education…
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Baroness Ashton of UphollandLabour
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I hope that the noble Lord can organise it. I completely recognise the strength of feeling about the role of education and training. The noble and learned Baroness, Lady Butler-Sloss, talked about it with great passion. The noble Lord, Lord Kingsland, described it as unique. The noble Lords, Lord Neill of Bladen and Lord Thomas of Gresford, and my noble friend Lord Borrie each have benefited—if I might describe it as such—from the incredible way in which the Inns have developed their role in education and training, and I take the point about dining. My noble friend Lady Royall was reminded by the comments of the noble Lord, Lord Thomas of Gresford, of the House of Lords. Conviviality is a fundamental part of being able to strive across the Dispatch Box to achieve what we all wish to see, which is good legislation. I also recognise the role of the Inns in calling and disbarring barristers, currently set out in Section 31 of the Courts and Legal Services Act 1990 in respect of rights of audience. As a result of the changes to the way in which reserved legal activities will be granted in future, we have to repeal that section. The legislation as currently drafted allows flexibility for the Bar Council to make regulatory arrangements maintaining the role of the Inns in calling and disbarring authorised persons. The Government think it very important that the Bar Council, as the approved regulator, has primary responsibility for making the arrangements for the training, practice and discipline of barristers. The detail of the relationship that the Inns have with the Bar Standards Board and the Bar Council is a matter for consideration by those parties and the Legal Services Board when established. That said, I understand completely the strength of feeling and the need for more certainty to ensure that the role of the Inns in respect of the calling and disbarring of barristers continues in the future. Perhaps I may therefore take away the amendment of the noble Lord, Lord Kingsland. I ask him to withdraw it and I shall consider how to come back on Report to deal with the issues that have been raised so succinctly by Members of the Committee.
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Baroness Ashton of UphollandI had hoped that the noble Lord would be more enthusiastic about my words. First, there are some issues of drafting abo…
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Baroness Ashton of UphollandLabour
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I had hoped that the noble Lord would be more enthusiastic about my words. First, there are some issues of drafting about which we are now in discussion with the Bar Council. Lady Justice Smith, President of the Council of the Inns of Court, has asked us to think about these issues properly and states in her letter: “I hope that you will urge Lord Kingsland to withdraw his amendments and that the Government will undertake to come back”. That is what I am seeking to do. The reason we have a definition of “solicitor” is that apparently it is already defined within statute, but the same is not true of “barrister”. That may not be a satisfactory reason, but that is why the Bill treats this issue as it does. However, I am perfectly reconciled to the fact that if we are going to tackle this properly, we must make sure that the drafting is right. Once I have discussed this fully with the President of the Council of the Inns of Court, we shall be in a good position to move forward.
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Baroness Butler-SlossI wonder if I can point out to the Minister that I understand very well why “barrister” was not included previously. It…
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Baroness Butler-SlossCrossbench
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I wonder if I can point out to the Minister that I understand very well why “barrister” was not included previously. It was because there was a section dealing with the Inns of Court which set out a definition. But once the section that provides for barristers coming from the Inns of Court is removed, it is necessary at the least to have a definition of “barrister”. Otherwise the Bill would appear to be deficient.
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Baroness Ashton of UphollandThe point is well made, and well taken. That is why we need to take the issue away and get it right.
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Baroness Ashton of UphollandLabour
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The point is well made, and well taken. That is why we need to take the issue away and get it right.
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Baroness Ashton of UphollandI am grateful to the noble Lord. I agree; we need to recognise that it is important to update and streamline the powers…
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Baroness Ashton of UphollandLabour
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I am grateful to the noble Lord. I agree; we need to recognise that it is important to update and streamline the powers of the Council for Licensed Conveyancers. Schedule 17 already makes a number of changes to the Administration of Justice Act 1985 and the Courts and Legal Services Act 1990, to ensure that the council is able to operate effectively under the new framework. As the noble Lord has said, Amendments Nos. 151ZB to 151ZD further augment the 1985 and 1990 Acts by restructuring that disciplinary process. We recognise that these amendments may indeed be cost effective, and could ease administrative burdens by allowing those bodies limited autonomy over disciplinary and regulatory matters. We would like to take them away and consider them further with the council. Amendment No. 151ZA amends Section 22 of the Administration of Justice Act 1985, as the noble Lord has said, to allow the council to determine the eligibility requirements of accountants auditing licensed conveyancers. We recognise that the provisions in Section 22 may be perceived as overly prescriptive. Again, we would like to give further consideration to whether or not it will be sufficient for the council to make its own rules, which the board would have to approve, regarding the eligibility of accountants to conduct such audits. I am concerned to ensure that we have fully considered the implications of the amendment, particularly in relation to partnerships, before I go too far in agreeing them. As I have indicated, I would like to talk to the council specifically about that. I hope the noble Lord will allow me to take the amendments away, consider them further and come back on Report.
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Baroness Ashton of Uphollandmoved Amendment No. 151A:
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Baroness Ashton of UphollandLabour
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moved Amendment No. 151A:
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Baroness Ashton of Uphollandmoved Amendment No. 151B:
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Baroness Ashton of UphollandLabour
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moved Amendment No. 151B:
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Baroness Ashton of UphollandI am grateful to the noble Lord for raising these points. I was expecting him to do so, which is why my answer is so re…
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Baroness Ashton of UphollandLabour
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I am grateful to the noble Lord for raising these points. I was expecting him to do so, which is why my answer is so readily available. Whether the provision of immigration advice services should be made a reserved legal activity has been considered by the Government but was not included in the Bill. Immigration advice is regulated by the Immigration Services Commissioner, as the noble Lord said, with a UK-wide remit, whereas this Bill is primarily concerned with the regulation of legal services in England and Wales. The Government are also mindful of the view that the Immigration Services Commissioner’s oversight of the provisions on immigration advice was an issue of public interest as well as one of consumer protection. However, as part of its programme of reform announced last year, the Home Office is currently carrying out a review of all its non-departmental public bodies and agencies to ensure that it has the right mix of bodies to deliver its priorities and to improve governance and the support that it provides to its delivery bodies. One of the bodies within the scope of the review is the Office of the Immigration Services Commissioner. As with the other bodies within the scope of the review, the Home Office is looking at the functions of the Office of the Immigration Services Commissioner and whether that body is the most appropriate and effective in delivering the objectives of ensuring that vulnerable groups receive good advice from bona fide advisers, are protected from exploitation by unscrupulous immigration advisers and that public interest in the integrity of the immigration system is maintained. That review is intended to make recommendations to the Home Secretary by the end of this month. The Government will consider the points raised by the noble Lord in the light of the review before the Bill comes back to the House on Report. I hope that that gives the noble Lord the information that he needs at this stage.
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Lord Thomas of GresfordMy name is attached to this amendment. Of course, we support the noble Lord, Lord Kingsland, who has said everything th…
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Lord Thomas of GresfordLiberal Democrat
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My name is attached to this amendment. Of course, we support the noble Lord, Lord Kingsland, who has said everything that needs to be said. I look for an explanation why this historic exemption should continue to apply in a period when the regulatory regime has so much altered from what it used to be. I understand that there was a time when government lawyers might not be required to be members of the Law Society, or matters of that sort. But surely today, when they are subject to regulation, they should pay the same price as everybody else. If it is just a matter of cost—if it is just a Treasury matter—that would be a disgraceful explanation.
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Lord Lyell of MarkyateAs I was responsible on and off for 10 years for the Government Legal Service, I think that my noble friend’s points ar…
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Lord Lyell of MarkyateConservative
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As I was responsible on and off for 10 years for the Government Legal Service, I think that my noble friend’s points are very well made and I much look forward to hearing what the Minister has to say.
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Baroness Ashton of UphollandAgain, I am grateful to the noble Lord for raising this issue. Clause 184 maintains the rights and privileges of solici…
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Baroness Ashton of UphollandLabour
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Again, I am grateful to the noble Lord for raising this issue. Clause 184 maintains the rights and privileges of solicitors preserved under Section 88 of the Solicitors Act 1974. This is a saving provision which recognises, as legislation has done since the 18th century, the low regulatory risks associated with the roles undertaken by solicitors to the Crown and other public departments. This role has always been, and remains, very different from the role carried out by solicitors working in the private sector, either employed or self-employed, since government solicitors, who are already subject to separate regulation, do not generally provide advice or other services to the public or hold client money. Instead, government solicitors provide advice and representation to the Government and not to the public, and the regulatory risk they present is quite different from the risk represented by solicitors providing services to the public. Similarly, the Treasury Solicitor, solicitors to other public departments, the solicitor to the Church Commissioners and the solicitor to the Duchy of Cornwall have distinct roles in advising the state, and the saving in Clause 184 and Section 88 of the Solicitors Act extends to the functions carried out by those office holders. It is important to remember that regulation should be appropriate and proportionate—a word that has been used a great deal in this Committee—and targeted where action is needed. The Government provide a comprehensive training and development programme for their lawyers which ensures that they are competent to carry out the duties they are charged with and is therefore appropriate given the context in which they operate. An additional requirement to hold practising certificates serves no additional benefit. While the Bar Council was statutorily recognised as a professional regulator of the Bar in 1990, noble Lords will know well that it was not until 1999 that it was empowered to levy a fee for a right to practise. But the question of who is a practising barrister and who requires a certificate remains in the hands of the Bar Council and is not—as in the case of solicitors—a matter of legislative definition. There is, therefore, no equivalent statutory exemption for government barristers, but that does not mean that we should remove the exemption for government solicitors. I therefore reject the amendment and hope that the noble Lord will withdraw it.
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Baroness Ashton of UphollandI am now confused about what the noble Lord wants me to do. The noble Lord, Lord Thomas of Gresford, was concerned that…
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Baroness Ashton of UphollandLabour
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I am now confused about what the noble Lord wants me to do. The noble Lord, Lord Thomas of Gresford, was concerned that the financial implications were the overriding factor. I believe that the relevant cost is £850,000. I thought that the noble Lord was asking me not to exempt solicitors, but now he seems to be asking me to exempt barristers too. Which is it?
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Baroness Butler-SlossAre barristers employed in public service by government treated differently from solicitors employed in public service…
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Baroness Butler-SlossCrossbench
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Are barristers employed in public service by government treated differently from solicitors employed in public service by government?
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Lord Thomas of GresfordBefore the noble Baroness answers that, did I hear her say that the cost would be only £158,000?
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Lord Thomas of GresfordLiberal Democrat
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Before the noble Baroness answers that, did I hear her say that the cost would be only £158,000?
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Baroness Ashton of Upholland£850,000!
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Baroness Ashton of UphollandLabour
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£850,000!
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Lord Thomas of GresfordIt would cost £850,000. It struck me that the Government were running short of solicitors. How much is the practising c…
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Lord Thomas of GresfordLiberal Democrat
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It would cost £850,000. It struck me that the Government were running short of solicitors. How much is the practising certificate at the moment?
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Lord Lyell of MarkyateBefore the noble Baroness answers that, I hope that I may inject one more thought. Although it is true that the Governm…
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Lord Lyell of MarkyateConservative
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Before the noble Baroness answers that, I hope that I may inject one more thought. Although it is true that the Government are primarily the client of solicitors employed in government service, do those solicitors not owe an independent duty to the court? They have a duty of integrity in how they give advice, which will affect the private citizen and is part of the ethos of the profession which needs to be generally overseen. Surely the noble Baroness was not suggesting that any lower or different standards applied to solicitors in the Government Legal Service than apply to any other solicitor. To that degree, I cannot see why they should be exempted. Certainly, from my deep knowledge of solicitors in the Government Legal Service, I know that they would not wish to be thought in any way less obliged to maintain high standards than any other solicitor.
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Baroness Ashton of UphollandI agree completely with what the noble and learned Lord said about the high standards that they would expect of themsel…
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Baroness Ashton of UphollandLabour
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I agree completely with what the noble and learned Lord said about the high standards that they would expect of themselves. They would expect others to view them as having the highest possible regard for those standards. The question that we keep coming back to in the Bill is how to ensure that we are proportionate and regulate where necessary. I contend that it is not appropriate to regard the work provided by government solicitors in precisely the same way as the work of those operating outside that service, for the reasons I have given—not least that they are not facing the public, they are not generally handling clients’ money and so on. We have sought in the Bill to ensure that we regulate where we think it appropriate. There is a long tradition of exempting solicitors in the way that I have described going back to the 18th century. There may be a perception in the Committee that these solicitors should be included but I have picked up no perception among the public that this is something they need to worry about. If there is evidence to prove otherwise, then—as I have indicated throughout this sitting—bring that evidence forward. I shall look at it and refer it to my colleagues. But there is no evidence. The figure required is £850,000; I am sorry that I garbled it. I mentioned the sum partly to assure the noble Lord, Lord Thomas of Gresford, that although it is significant, it is not the reason why we are not taking the proposal forward. The reasons are those which I have outlined. I do not really know how to answer the question put by the noble and learned Baroness, Lady Butler-Sloss, on whether barristers employed in the public service by government are treated differently from solicitors. Perhaps we can talk about what precisely was meant by the question. We are continuing the current position while recognising that the role of solicitors in the public service is different. I have already indicated why barristers are in a different position. Noble Lords can of course consider what they wish to do at the next stage, but we are absolutely clear that we have got this right.
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The Attorney-General (Lord Goldsmith)I thank the noble Lord for his kind words of welcome. In responding to the amendment, I should declare an interest both…
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The Attorney-General (Lord Goldsmith)Labour
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I thank the noble Lord for his kind words of welcome. In responding to the amendment, I should declare an interest both as president of the Bar Pro Bono Unit and as the chairman of the Attorney-General’s National Pro Bono Co-ordinating Committee. The committee was formed five-and-a-half years ago and brings together some of the main pro bono organisations in England and Wales, such as the Free Representation Unit and others; the professional bodies—the Bar Council, the Law Society and the Institute of Legal Executives; representatives of the voluntary advisory sector; and educational organisations. I identify those for a purpose, which I shall come to. The purpose of the committee is to help to co-ordinate and promote pro bono activities. I should like to take this opportunity to express my admiration and thanks to the many legal professionals and students and those who support them in providing free legal advice and representation. It is not a substitute for public funding for legal services, but it can be an essential adjunct to it for some who would not get through the legal system without expert help which they cannot pay for themselves. The clause proposes a change to the law which the pro bono organisations strongly support and I have long believed is necessary. It is promoted with the active support of the co-ordinating committee. I am therefore grateful to my noble friend Lady Ashton for having found the legislative vehicle to bring this before the Committee. I am also glad to have the opportunity to respond to this amendment. The genesis of Clause 185 is the practice in our courts that the unsuccessful party is often ordered to pay towards the cost of the other party, but that can apply only where the other party himself is liable to pay those costs. That is the indemnity principle. The effect is that in cases where an order for costs will be made against the losing party but the winning party is represented pro bono, no order can be made. The end result is that the person who benefits from the fact that the legal services are provided free is not the represented party but the other party, who may well be able to pay legal costs and is relieved of the burden of doing so. The purpose of the clause is to remove the anomaly but at the same time provide valuable additional funds to support pro bono work. The purpose of the clause is not that the moneys ordered go to the lawyers who have acted pro bono—they will continue to have acted free of charge—to a charity prescribed by the Secretary of State, who can then effect a strategic distribution of such funds to where they would be of most use. Even before this clause was in existence, work had already begun to establish a charitable foundation whose purpose would be to receive and distribute moneys that became available to it to support organisations providing free legal advice and assistance. The Government have that body in mind as the charity to be prescribed, although no decision has been made—nor could it be until the clause became law. The amendments proposed by the noble Lord, Lord Kingsland, would direct those payments instead to a charity selected in a particular case or to the pro bono organisation that happens to be involved in the case. I am not persuaded that the approach suggested would constitute the most effective use; and, more importantly, nor is the committee to which I referred. The idea that there should be a single body arose out of consultation with the members of the pro bono co-ordinating committee and I have identified—and now it is apparent why—the organisations represented on it. The advantages of the single-body approach are that the prescribed charity is able to effect distribution of moneys in a strategic manner, taking into account national, regional and local considerations; it overcomes the point that a court is ill equipped to decide between competing claims of charities or organisations—and it is not appropriate that it should have to do so; and the body that is prescribed will have had no role in the decision to litigate or in the litigation, which will protect it from perhaps being, as was suggested, liable for the costs of the case. Giving pro bono organisations a financial interest in the outcome of a case, which was the principal reason put forward by the noble Lord, seems to be a bad rather than a good thing. One would not want pro bono organisations to determine which cases they supported on the basis of which were liable to get them most money. There will be no added layer of bureaucracy that would be caused by the need to sift and assess additional bodies for statutory prescription.
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Lord GoldsmithI am not absolutely sure what consultation at this stage there will have been with anyone else. The way in which this t…
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Lord GoldsmithLabour
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I am not absolutely sure what consultation at this stage there will have been with anyone else. The way in which this took place was to ask the committee, which, as I say, represents all the pro bono organisations—the Bar Council, the Law Society, the education institutions, the voluntary advisory sector, the National Association of Citizens Advice Bureaux and legal advice centres—“What do you think the best solution is?”. It looked at that and set up a working group; it determined that the best way to proceed would be to set up a single charity that would be able to receive moneys, perhaps from other sources as well, and distribute them strategically. The full committee endorsed that proposal. In particular, the noble Lord’s amendment was put to it at its last meeting, it had a debate about it and it said that it still thought that the right course was the single route for the reasons that I have attempted to summarise.
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Baroness Ashton of Uphollandmoved Amendment No. 151D:
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Baroness Ashton of UphollandLabour
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moved Amendment No. 151D:
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Baroness Ashton of Uphollandmoved Amendment No. 151E:
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Baroness Ashton of UphollandLabour
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moved Amendment No. 151E:
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Lord Thomas of Gresfordmoved Amendment No. 152:
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Lord Thomas of GresfordLiberal Democrat
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moved Amendment No. 152:
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Lord Thomas of Gresfordmoved Amendment No. 153:
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Lord Thomas of GresfordLiberal Democrat
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moved Amendment No. 153:
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Baroness Ashton of Uphollandmoved Amendment No. 155A:
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Baroness Ashton of UphollandLabour
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moved Amendment No. 155A:
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Lord Neill of Bladenmoved Amendment No. 157ZA:
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Lord Neill of BladenCrossbench
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moved Amendment No. 157ZA:
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Baroness Butler-SlossI strongly support the noble Lord, Lord Neill of Bladen. I shall deal with points that the Committee has heard me on be…
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Baroness Butler-SlossCrossbench
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I strongly support the noble Lord, Lord Neill of Bladen. I shall deal with points that the Committee has heard me on before. The noble Lord, Lord Neill, has already referred to them: access to justice and the rights of individual consumers. We have already heard of the fragility of small firms of solicitors, which will become even more fragile under the new scheme. That raises the real possibility of an adverse effect on the consumer if those small firms do not survive. Will the new types of firm be prepared to take on unprofitable, difficult and time-consuming litigants who are none the less entitled to consideration as consumers? At Second Reading, we heard that there are already areas, and may well be even more, where certain sections of the public who need, and are entitled to, help from solicitors already do not find solicitors within an acceptable radius of where they live. Whether in small or medium-sized towns or in certain rural areas, the consumer will be the loser if there is not serious reflection and investigation about how Part 5 will work.
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Lord Thomas of GresfordThe noble Lord, Lord Neill of Bladen, will not be surprised if I tell him that he has the full support of these Benches…
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Lord Thomas of GresfordLiberal Democrat
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The noble Lord, Lord Neill of Bladen, will not be surprised if I tell him that he has the full support of these Benches for his amendment. It seems to me that there is really no rush to bring in alternative business structures. Where is the pressure coming from? It is certainly not coming from any consumer association that I have heard of; it may come from certain business interests who want to fasten in on the more profitable lines in the provision of legal services. But that is no reason for not carrying out the very careful overall look at the proposals and an evaluation of their impact in the areas to which the noble Lord, Lord Neill, referred. I have said a great deal on earlier occasions about this: I need not repeat it. The noble Lord can be assured of our support.
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Baroness Ashton of UphollandI understand entirely what the noble Lord, Lord Neill of Bladen, seeks to do, and I pay tribute to the enormous amount…
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Baroness Ashton of UphollandLabour
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I understand entirely what the noble Lord, Lord Neill of Bladen, seeks to do, and I pay tribute to the enormous amount of work that I know he did on the Joint Committee. He once again reminded us that it sat for only eight weeks, but it clearly successfully gave us a very important report on which the Government have acted in most places, if not all. I am extremely grateful to him. I do not disagree with the sentiment that lies behind the amendment, nor, indeed, with the concerns that noble Lords have raised, particularly around small firms and rural communities. Noble Lords will know that Sir David Clementi, when talking about rural services, said that the benefits of new service providers, “are not only that they can bring about lower costs; it is also that through longer opening hours, sophisticated telephony and advanced customer care skills, they may be able to offer consumers better access to certain other types of legal services”. So I completely accept the issues around rural communities and, indeed, poor communities. I do not, obviously, accept what has been said about how the Government approach this. I am reminded though, in terms of other services we provide for our poorer and more vulnerable communities, that actually one tries to provide the highest quality service one possibly can. That can be provided by the local small supplier, but sometimes it can be provided because you are able to encourage others to come in, invest in the area and provide more sophisticated services that provide greater benefit. I have nothing against the sentiments behind the amendment, and I have striven throughout our discussions on Part 5, which I shall not repeat again, not least because of the lateness of the hour and the fact that noble Lords have heard them well enough, to stress that there are really important issues to be addressed in the context of how this is rolled out.
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Lord Neill of BladenI thank those who have lent support to what I have said, from which I received encouragement. I am grateful to the Mini…
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Lord Neill of BladenCrossbench
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I thank those who have lent support to what I have said, from which I received encouragement. I am grateful to the Minister for the courteous way in which she received my proposal, although she will not be surprised if I am not bowled over by the closing five minutes of her remarks. In effect, she does not accept what I propose. The idea that I, and perhaps the Library, see the legislation that would have been relevant months ago is not very satisfactory. Members of the House may think that all is well and that what we are doing is in accordance with what happens elsewhere. Of course, it is not. It may be done in New South Wales but, so far as I know, it is not done anywhere else. I will, however, gratefully read what the Minister sends me, and I will keep an eye on what transpires between now and Report.
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Lord Lyell of MarkyateI apologise to the House because I could not hear the amendment in the normal manner, although I did hear it. I very mu…
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Lord Lyell of MarkyateConservative
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I apologise to the House because I could not hear the amendment in the normal manner, although I did hear it. I very much endorse what the noble Lord is saying.
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Lord Neill of BladenI am grateful. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. Clause 201 agreed to. Clauses 202…
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Lord Neill of BladenCrossbench
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I am grateful. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. Clause 201 agreed to. Clauses 202 to 204 agreed to. Schedule 21 agreed to. Schedule 22 [Transitional provision]:
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Lord Thomas of GresfordWe fully support this amendment. We do not see why an interim chief executive should be appointed who, “may incur expen…
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Lord Thomas of GresfordLiberal Democrat
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We fully support this amendment. We do not see why an interim chief executive should be appointed who, “may incur expenditure and do other things in the name of and on behalf of the OLC from the beginning of the first interim period”, until such time as “the OLC determines otherwise”. That really means that all the decisions about appointment and offices can be made by a temporary chief executive. Schedule 15 sets out the membership and so on for the Office for Legal Complaints. Paragraph 21 states: “During the initial 5 year period, the OLC must not acquire or dispose of an interest in land, except with the approval of the Secretary of State … The initial 5 year period is the period of 5 years beginning with the day on which the appointment of the first Interim Chief Executive … takes effect”. That means that the interim chief executive can buy the office and set up the staff, and nothing has to happen for five years, which is the interim period. That is wrong. Surely, when it is set up, an organisation such as the Office for Legal Complaints should choose its chief ombudsman or chief executive and that person should make the important executive decisions along the lines that I have mentioned; therefore, this interim chief executive should not exist. We agree with the noble Lord, Lord Kingsland.
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Baroness Ashton of UphollandI know from discussions that I have had outside the Chamber with the noble Lord, Lord Thomas of Gresford, that he feels…
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Baroness Ashton of UphollandLabour
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I know from discussions that I have had outside the Chamber with the noble Lord, Lord Thomas of Gresford, that he feels strongly about this provision. I shall set out how we think that this will work and the reasons for it. Noble Lords will then have the opportunity to consider it. We have sought to make sure that we can get the office up and running as soon as possible. I shall make two points straightaway. We have consulted many stakeholders, who are broadly content with what we are doing and why, because they see the need to get on with it. The appointment will be made by open competition. The role of the interim chief executive will be limited to laying the operational foundations of the OLC by taking forward work relating to financial management systems, HR policy and procedure, pay structures, terms and conditions, pensions and IT. He will not be able to make scheme rules because they will be the responsibility—
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Lord Thomas of GresfordThe noble Baroness has just referred to IT, which is another example of the enormous investment that will be necessary…
Speaker
Lord Thomas of GresfordLiberal Democrat
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The noble Baroness has just referred to IT, which is another example of the enormous investment that will be necessary to deal with legal complaints as they come in. The Law Society’s previous system broke down, so it is important that the right system is chosen. Why should it be put into the hands of an interim chief executive?
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Baroness Ashton of UphollandPerhaps I may explain how the interim chief executive will operate. Someone has to make decisions and the word “interim…
Speaker
Baroness Ashton of UphollandLabour
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Perhaps I may explain how the interim chief executive will operate. Someone has to make decisions and the word “interim” does not suggest that the person will be somehow less able to carry out these functions than would otherwise be the case. The question that we had to ask ourselves is this: bearing in mind the length of time that it will take to make all the appointments necessary to set up the organisations, how do we make sure that the transition begins in a seamless and appropriate way? We want someone of extremely high calibre to come in during the interim precisely because ultimately the responsibilities will fall elsewhere and a chief executive will be appointed. In the mean time, it is appropriate to appoint someone to get on with sorting out the basic tasks. I agree wholeheartedly with the noble Lord about IT systems. We would not appoint someone who did not know how to approach this. They will have the skills and qualifications to know how to seek advice on IT and how to organise the suppliers and so forth. That will be an important part of their functions, which is why I highlighted it specifically. However, the interim chief executive cannot appoint the ombudsmen or make the scheme rules. We have said that directions will be issued initially by the Lord Chancellor and then, once appointed, the board. In reality, we expect the interim chief executive and the board to be appointed at roughly the same time. As a consequence, the interim chief executive will be subject to directions issued by the Lord Chancellor only for a very short period, if at all. We have developed the timetable for the appointment of the board and the interim chief executive in discussion with people in our department and officials involved in establishing other organisations, including the Judicial Appointments Commission. As I said, they will be subject to directions issued by the Lord Chancellor because we need to make sure that we have accountability. Other independent appointees are subject to directions issued by the Lord Chancellor, too, not least under Schedule 8 to the Access to Justice Act, which enables the Lord Chancellor to give directions to the Legal Services Complaints Commissioner. The board’s oversight also mitigates any risk that the incoming OLC and the interim appointee’s successor, who will be permanent, may want to move in a different direction and thus unravel the efforts already made. That is because, following the transition period, the board will continue to have oversight of and be able to hold to account the OLC. The continuity of board appointments and the work of the interim chief executive will ensure that the organisation continues to move in the right direction. Again, we have consulted stakeholders, who are broadly content because these provisions enable us to get the body up and running as soon as possible. The five-year period in the land disposal clause is not connected to the period for the interim chief executive. The OLC, and no one else, will determine when the interim chief executive’s appointment will end. We are doing this in order to get things moving in the manner that I have described: HR policy, pay structures, pension provision and so forth. We want someone to get on with that side of the work who will not be involved in the critical appointments of ombudsmen and, ultimately, not be involved in the long-term direction of the organisation, but who will have a link to the board, which will be appointed at approximately the same time, enabling the Lord Chancellor to give directions to bridge what we hope will be a short gap between the appointment of the interim chief executive and the board itself. We can then move in the right direction. I hope that this has given some comfort to the noble Lord and that he will feel able to withdraw his amendment.
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EnactedLegal Services Act