Report stage in the Lords
- Speaker
The Parliamentary Under-Secretary of State, Department for Constitutional Affairs (Baroness Ashton of Upholland)Labour- Quote
- moved Amendment No. 203:
- Time
- 20:21
- Source
- View in Hansard ↗
- Speaker
Lord Hunt of WirralConservative- Quote
- moved Amendment No. 204:
- Time
- 20:21
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- You can’t be that old.
- Time
- 20:21
- Source
- View in Hansard ↗
- Speaker
- Lord Hunt of WirralConservative
- Quote
- My Lords, I hope that Hansard will record that comment. Throughout that time, I have been aware that the status of a partner in a solicitor’s firm is something greatly to be envied by those who are not partners. It is a significant status symbol. It is tied up in the shadows of history that someone who is highly competent, who is an accountant and who is running the legal practice is not allowed to be a partner. Sir David Clementi saw that straightaway, and he thought, “Let us now recognise the status of these individuals as partners, even if they are not qualified lawyers”. Under the provisions in the Bill—the Government are to be commended for this, although I did not vote in the last Division—there is certainly scope for trying to evolve a system that will work. It will now become possible for firms to make non-lawyers partners. But if that is to happen, suddenly the whole panoply of alternative business structures and their licensing regime comes into play. Therefore, the only way in which it will be possible for the finance director, or someone allied to that finance director, to become a partner is if the whole panoply, the separate ABS licensing regime, comes into force. I have contended on several occasions, as the Minister will know, that we should not really have this enormous unnecessary, administrative, regulatory burden coming into effect for legal disciplinary practices. I can just see what will happen. The finance director will become a partner; immediately the firm has to become an alternative business structure, and one day the finance director will leave and immediately the poor firm, if it then has a lawyer taking on that position, will cease to qualify as an alternative business structure, when all that will have happened is that the finance director has been replaced by someone who does not fulfil the requirements of the ABS.
- Time
- 20:21
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- My Lords, perhaps I may make it absolutely clear at the outset that the comment that I made while the noble Lord was speaking was that he could not possibly be old enough to have been a partner for 40 years. Did the noble Lord say that? I do not accuse him of telling porkies, if I may use that terminology, but it is impossible.
- Time
- 20:30
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- My Lords, that is flattery of a particular kind.
- Time
- 20:30
- Source
- View in Hansard ↗
- Speaker
Lord Carlile of BerriewCrossbench- Quote
- My Lords, that is the end of the flattery.
- Time
- 20:30
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- My Lords, exactly. As the noble Lord, Lord Carlile, said, that is the end of the flattery—but it was, none the less, heartfelt. The noble Lord, Lord Hunt, eloquently returned to an issue that we looked at in Committee. The question is the Law Society’s ability to regulate practices with up to 25 per cent non-lawyer control without the need for those practices to be licensed under Part 5, and he has set out why he thinks that this is important. Amendments Nos. 311A, 311B, 311C and 632A, tabled with the support of the Institute of Chartered Accountants in England and Wales, would make similar provision for bodies with 25 per cent non-lawyer professionals, albeit that they would be low-risk bodies under the alternative business structure framework, rather than exempt from the framework. The amendments would also provide that firms with non-lawyer partners or members who do not provide services to clients should not require those licences. I hope that by this stage in our deliberations noble Lords will accept that I support the creation of practices that have non-lawyers as managers, or which combine the expertise of different professionals in the provision of services. I welcome very much both the Law Society and the Institute of Chartered Accountants facilitating and regulating such practices. I have said on many occasions that increased opportunities to leverage non-lawyer expertise into the legal services market is certain to create advantages both for consumers and for providers. What I cannot accept is exemption from Part 5 altogether for regulated practices within the proposed boundaries, which would go against a key principle of the Legal Services Bill and our proposals for alternative business structures. Our policy is to create, as far as is possible, a level playing field between regulators, offering all the potential to become licensing authorities. We could risk the opposite outcome. I know that that is not the intention of the noble Lord, but I do not wish to endorse a provision that gives one regulator a potential competitive advantage, first, by virtue of reaching part of the alternative business structure market before other regulators and, secondly, by avoiding the additional statutory requirements that would otherwise apply to these practices. I also do not want to endorse a proposal that gives a competitive advantage to non-lawyers who are regulated professionals, particularly given the concern that conflicts between professional rules may be one of the most complex challenges for those involved in alternative business structures. So I am opposed in principle to exemptions and carve-outs from the Part 5 regime. Certain forms of exemption may, arguably, facilitate an incremental approach in the short term; in the longer term, however, we run the risk of creating loopholes and possible confusion. We have tried in the Bill to make a clear, principled distinction between two types of practice. A body either has non-lawyers in positions of control or it does not. Consequently, it is either a licensable body or it is not. As I have stated, in the framework we have already provided for flexibility as far as low-risk bodies and other special bodies are concerned, but we have set 10 per cent as a maximum level on the basis that we think that control above that level becomes too significant to benefit from lesser scrutiny. In principle, the Government’s policy is that bodies with non-lawyer ownership or management should be subject to the safeguards of Part 5. Therefore, if we were to make an exception for Law Society practices, such practices could emerge without any need for the Legal Services Board to designate the Law Society as a licensing authority. It would not be required to fulfil the relevant obligations. That is not to say that the Law Society would or could not create similar safeguards, but we would have no guarantees in statute. We would run the risk of exposing consumers to inconsistent levels of regulatory protection and we would not have, at least for several years, any board of supervision. I have similar objections to any exemption for bodies with non-lawyer partners, client-facing or otherwise. I hope that the noble Lords will agree that it is crucial that we get this right from the outset. The incremental approach suggested by the noble Lord, Lord Hunt of Wirral, would be of little value if it could not be monitored and supervised by the board and if it proceeded with none of the safeguards that we have identified as essential to support alternative business structures. With the greatest respect to the noble Lord, I do not think that what he suggests quite fulfils the objectives set out by Sir David Clementi.
- Time
- 20:30
- Source
- View in Hansard ↗
- Speaker
- Lord Hunt of WirralConservative
- Quote
- My Lords, on that point, the Government have said that legal disciplinary practices can come into place soon after Royal Assent. Perhaps the Minister could clarify exactly what the Government mean by that, because I do not think that the LDPs, as defined by Sir David Clementi—for example, where just one person, perhaps the finance or human resource director, is allowed to become part of the management structure and a partner in the firm—can happen until at least 2010, or even 2011. That point causes me some concern. Would the Minister be prepared to have a look at the sorts of examples that Sir David has given, just to ensure that we can have some fast-track procedure to allow that to happen without the great panoply and delay involved in awaiting the full structure?
- Time
- 20:30
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- My Lords, I could not agree more with the sentiment behind what the noble Lord is saying. It is important, not least in the debate on how alternative business structures will evolve and develop, to enable LDPs, as we have learnt to call them, to come into being as soon as possible. I need to get advice on the exact timetable as soon as possible to be sure about that, but I agree with the noble Lord wholeheartedly. I want to ensure that noble Lords recognise that I do not disagree with Sir David Clementi’s judgment. He supported, as I do, the development of the types of practices that the Law Society is seeking to regulate, but he recommended that we put in safeguards around these practices. In particular, he talked about the head of legal practice and the fitness-to-own tests. He also recommended that those should be subject to oversight by the board under the B+ model. We believe that, in Part 5, we are guaranteeing that we have these safeguards in statute and that they can be relied on across the regulatory framework, while making it clear precisely to whom they should apply. Taking on board the noble Lord’s point about wishing to move forward with this, which I endorse completely, I hope that he will feel able to withdraw his amendment.
- Time
- 20:30
- Source
- View in Hansard ↗
- Speaker
- Lord Hunt of WirralConservative
- Quote
- My Lords, this has been a very helpful debate, because I sense that the Minister and many of us are ad idem and want to achieve the same objective. I hope that, if there is time before the Third Reading, the Minister will look again at Sir David Clementi’s report, as he spoke about the first step, which would facilitate the emergence of MDPs or alternative business structures at a subsequent date. I suppose that I am just talking about that first step, but, in the light of the comforting words that the Minister has uttered and the comments that she made at the outset of her speech, I shall be quixotically chivalrous and acknowledge how grateful I am to her for all that she has said tonight. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. [Amendment No. 205 not moved.] Clause 72 [Licensing authorities and relevant licensing authorities]: [Amendment No. 206 not moved.] Clause 73 [Designation of approved regulator as licensing authority]: [Amendment No. 207 not moved.] Clause 74 [Automatic cancellation of designation as licensing authority]:
- Time
- 20:30
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- moved Amendment No. 208:
- Time
- 20:30
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- moved Amendments Nos. 210 to 215:
- Time
- 20:30
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- moved Amendments Nos. 217 to 232:
- Time
- 20:30
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- moved Amendments Nos. 233 to 236:
- Time
- 20:30
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- moved Amendment No. 238:
- Time
- 20:30
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- moved Amendments Nos. 240 to 242:
- Time
- 20:30
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- moved Amendments Nos. 244 and 245:
- Time
- 20:30
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- moved Amendment No. 248:
- Time
- 20:45
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- moved Amendment No. 249:
- Time
- 20:45
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- moved Amendments Nos. 250 to 251:
- Time
- 20:45
- Source
- View in Hansard ↗
- Speaker
- Lord Carlile of BerriewCrossbench
- Quote
- My Lords, given my comments on Amendment No. 202, it will be no surprise to the House to know that I support these amendments. We regard specificity about access to justice as essential as we fear that otherwise there will be a real diminution of access to quality justice in Wales, the West Country and parts of the north-east and north-west, a reduction in the number of firms of solicitors and a risk of law by call centre. We support these amendments.
- Time
- 20:45
- Source
- View in Hansard ↗
- Speaker
Baroness Butler-SlossCrossbench- Quote
- My Lords, I support what the noble Lord, Lord Carlile, said, particularly with regard to the west of England, where I live for part of the year. It is important that one recognises that the noble Lord, Lord Whitty, who undoubtedly supports a large proportion of consumers, does not support all consumers. There are small consumers who have real needs. Whether it is to be seen under Amendment No. 252, 253 or 254, there are small people who need help from local firms of solicitors and those local firms may not survive this grand new scheme that the Government have produced. I am speaking on behalf of some rural communities, but it is equally appropriate to speak on behalf of small areas on the outskirts of big cities. One has to say that what is suggested in Amendments Nos. 252 to 254 has real merit. They should be seriously considered by the Government. I support the amendment moved by the noble Lord, Lord Kingsland.
- Time
- 20:45
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- My Lords, I start by saying that I could not agree more on the importance of access to justice; it is vital. I have approached it by seeking to recognise that when licensing authorities are operating they must balance access to justice correctly against other objectives and ensure that it is achieved. In that respect there is nothing between us. I have sought to put access to justice in the context of enabling it to be balanced so that it can be achieved taking into account the other regulatory objectives. The interaction of those objectives is important. I appreciate what the noble Lord, Lord Kingsland, said about Amendment No. 248, but I want that to be seen as reinforcing that as effectively as possible. We must make sure that we not only get a balance but also that the other objectives are not lost or forgotten, or, indeed, that the holistic approach of the regulatory objectives, working together, means access to justice is suitably protected. What I am trying to demonstrate is that we have taken all the regulatory objectives and said, “These are critical”; access to justice certainly is. But all of them need to be considered effectively and properly. That is my difficulty with Amendment No. 252. I do not in any way differ from the requirement about access to justice issues—the noble and learned Baroness indicated that in the examples she gave; the noble Lord, Lord Carlile, gave examples in the context of the Part 5. We must make certain that access to justice is protected. But I want it to be done with the other objectives. All I am saying is that they are all important; they all have to be dealt with properly; and they all have to be, within the context of the amendments I am moving, seen to be important—an issue we will come on to in terms of reporting and so on. It does not mean that I am in any way suggesting that access to justice is less than very important; I am simply saying that actually all the objectives are and that it needs to be considered as critical alongside the other objectives. I have problems with two of the amendments within the group. Amendment No. 253 in a sense seeks to give priority to access to justice by imposing a requirement that it is not quite the same as a regulatory objective. There is a risk in that. A similar obligation that is not quite the same could cast doubt on what we mean by access to justice, and I do not want anything in the legislation that could create confusion about how you interpret the objectives and over what the licensing authorities’ duties are. Amendment No. 254 has the list of groups of consumers. Noble Lords will know—I indicated this in Committee—from my previous existence in education and all the way through my existence as a DCA Minister that I really do not like lists in legislation. The use of different phrases can cause confusion. If we single out four groups of consumers we fail to recognise other consumer interests as well. We have had much debate, as I have already indicated, about the effect of alternative business structures on rural communities and those who are poor and their use of legal services. I absolutely agree that they must not be disadvantaged. Equally, I do not want other consumers to be disadvantaged. Everyone's access to justice is important. The general duty to consider the interests of all consumers avoids trying to put some consumer interests behind the interests of other people. I think that that can be achieved without Amendment No. 254. As I tried to indicate in debate on Amendment No. 248, we need to make sure that the regulatory objectives are protected. Access to justice is very important. I do not think that the amendments before us make the position any better and they risk creating problems I would rather see avoided. But I support the contention of making sure that access to justice is very important and hope that the noble Lord will withdraw the amendment.
- Time
- 21:00
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- moved Amendments Nos. 256 to 273:
- Time
- 21:00
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- moved Amendment No. 274:
- Time
- 21:00
- Source
- View in Hansard ↗
- Speaker
Lord Evans of Temple GuitingLabour- Quote
- moved Amendments Nos. 276 to 278:
- Time
- 21:00
- Source
- View in Hansard ↗
- Speaker
- Lord Evans of Temple GuitingLabour
- Quote
- moved Amendments Nos. 284 to 290:
- Time
- 21:00
- Source
- View in Hansard ↗
- Speaker
- Lord Evans of Temple GuitingLabour
- Quote
- moved Amendment No. 296:
- Time
- 21:00
- Source
- View in Hansard ↗
- Speaker
- Lord Evans of Temple GuitingLabour
- Quote
- moved Amendment No. 305:
- Time
- 21:00
- Source
- View in Hansard ↗
- Speaker
- Lord Evans of Temple GuitingLabour
- Quote
- moved Amendment No. 309:
- Time
- 21:00
- Source
- View in Hansard ↗
- Speaker
- Lord Evans of Temple GuitingLabour
- Quote
- moved Amendment No. 313:
- Time
- 21:00
- Source
- View in Hansard ↗
- Speaker
- Lord Evans of Temple GuitingLabour
- Quote
- moved Amendment No. 314:
- Time
- 21:00
- Source
- View in Hansard ↗
- Speaker
- Lord Hunt of WirralConservative
- Quote
- moved Amendment No. 316:
- Time
- 21:00
- Source
- View in Hansard ↗
- Speaker
- Lord Evans of Temple GuitingLabour
- Quote
- My Lords, we listened very carefully to what was said in Committee. In our amendment, we thought not only that we had encapsulated the spirit of what was said but that our amendment had gone a little further. I have listened carefully to the noble Lord, Lord Hunt, but I am not sure whether he likes the government amendment or feels that it does not go far enough. Therefore, I will present the government amendment and, if there are further things to think about before Third Reading, we will be more than happy to consider them. When we debated Amendment No. 248, my noble friend said that the Government had tabled an amendment of their own about monitoring ABS. We have come to the conclusion that we should place the board under a specific duty to report on the development of ABS. This amendment fulfils the commitment we gave in Committee. It integrates reporting into the board’s annual report. The board will have a permanent duty to include ABS. The report is, of course, laid before Parliament, so this will reinforce parliamentary scrutiny of ABS as provided for in Amendment No. 248. Placing the monitoring duty on the board keeps all oversight of ABS in one place, which gives a more joined-up approach to checking how the regulatory objectives are being met. The reporting duty covers licensing authorities and licensed bodies. This means that the board will be monitoring not only the decisions of licensing authorities, which it would anyway in its oversight role, but also the practical effects of those decisions. Amendment No. 317 places responsibility for monitoring and reporting on the board rather than on the Lord Chancellor, a point with which the noble Lord, Lord Hunt, disagrees, or on a separate research body, as in Amendment No. 316. This ensures that all oversight responsibilities are kept in one place and thus guarantees a consistent approach. The reporting duty is focused. It is not merely about the development of ABS, but specifically about the effects of ABS activity on the regulatory objectives. This allows all the objectives to be considered, including, of course, access to justice. But it remains consistent with Amendment No. 248 in that it does not single out any one objective. As my noble friend pointed out, all the objectives need to be considered together to capture the interactions between them. This amendment carries that through into reporting on Part 5. I am grateful to the noble Lords, Lord Kingsland and Lord Hunt, for raising this point in Committee. I hope that our amendment slightly improves on that tabled by the noble Lord, Lord Hunt, although that may be a rather arrogant statement. Rather than being covered after a fixed period, Part 5 will always feature in the board’s report. The board will be able to report on initial steps and will continue to report as ABS develops and reaches a steady state. Of course, the board, Ministers and Parliament will all remain free to recommend change if reports or events reveal that it is necessary. Before I formally move our amendment, I wish to repeat that we would be very happy to discuss with the noble Lord, Lord Hunt, any improvement he feels that we may achieve to this government amendment before Third Reading.
- Time
- 21:15
- Source
- View in Hansard ↗
- Speaker
- Lord Hunt of WirralConservative
- Quote
- My Lords, I am much persuaded by the noble Lord, and his offer to improve government Amendment No. 317 is readily accepted. But having listened to his detailed explanation, I am now absolutely convinced that these two amendments stand side by side, Amendment No. 316 to cover the immediate position and Amendment No. 317 to provide a way into the future whereby the study under Amendment No. 316 can be followed up time and again through the mechanism of the annual report. I am grateful to the Minister, but I am still persuaded that Amendment No. 316 can sit alongside Amendment No. 317, so I would like to test the opinion of the House.
- Time
- 21:15
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- moved Amendment No. 317:
- Time
- 21:31
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- moved Amendments Nos. 318 and 319:
- Time
- 21:31
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- moved Amendment No. 321:
- Time
- 21:31
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- My Lords, I am concerned that the amendments stem from a worry that the Lord Chancellor would have undue influence over the Office for Legal Complaints and I genuinely do not believe that that is the case. The role of the Lord Chancellor in setting the size of the board or in consenting to the removal of the chairman of the OLC is non-interventionist. He will not change the size of the OLC of his own volition nor can he remove the chairman of the OLC. The OLC is a non-departmental body and as such is ultimately accountable to Parliament. It therefore must be right that the Lord Chancellor have the minimum of involvement in how the OLC is constituted. But when I say “minimum”, I mean exactly that. The Lord Chancellor has no role in approving any of the rules that the OLC makes in setting out how complaints can be handled, with only one exception: the rules on case-handling fees. He certainly has no role in appointing ombudsmen to determine complaints or in handling individual complaints. Therefore, any concern that he would have undue influence over the OLC is not substantiated. I hope that the noble Lord will withdraw the amendment.
- Time
- 21:31
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- moved Amendments Nos. 323 and 324:
- Time
- 21:47
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- moved Amendments Nos. 326 to 330:
- Time
- 21:47
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- moved Amendment No. 331:
- Time
- 21:47
- Source
- View in Hansard ↗
- Speaker
- Baroness Ashton of UphollandLabour
- Quote
- moved Amendments Nos. 332 and 333:
- Time
- 21:47
- Source
- View in Hansard ↗
- Speaker
- Lord Evans of Temple GuitingLabour
- Quote
- My Lords, I beg to move that further consideration on Report be now adjourned. Moved accordingly, and, on Question, Motion agreed to.
- Time
- 21:47
- Source
- View in Hansard ↗