Report stage in the Lords
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The Parliamentary Under-Secretary of State, Department for Constitutional Affairs (Baroness Ashton of Upholland)Labour- Quote
- My Lords, on behalf of my noble and learned friend Lord Falconer of Thoroton, I beg to move that the Bill be now further considered on Report. Moved accordingly, and, on Question, Motion agreed to. Clause 7 [Supplementary powers]:
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Lord Campbell of AllowayConservative- Quote
- moved Amendment No. 39:
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The Lord Speaker (Baroness Hayman)Crossbench- Quote
- My Lords, it might assist the House if I report that I understand that, in relation to the amendments to which the noble Lord referred at the beginning of his speech, Hansard incorrectly reported that Amendment No. 38 had been agreed to. In fact, Amendment No. 39 was not moved and a correction to that effect appeared yesterday. I hope that that is helpful.
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- Baroness Ashton of UphollandLabour
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- My Lords, I am very grateful to the noble Baroness the Lord Speaker for indicating the correction that has been made in Hansard. The noble Lord, having moved Amendment No. 38, withdrew it. On the issue of judicial review, as the noble Lord will remember from Monday, he was keen to look at my words to consider carefully whether I had done enough in his view to deal with the matter by indicating that of course judicial review would be available, as it would be with other public bodies of this kind. He is of course at liberty to then decide what he wishes to do. The noble Lord is also correct to say that the amendment to leave out Clause 7, Amendment No. 39, was grouped with Amendment No. 38, and I indeed replied to it. As he rightly says, it was late in the evening. I am afraid that I assumed that, in speaking to Amendment No. 38, he wished me to respond to both Amendments Nos. 38 and 39, as he did not degroup the amendment but left it where it was. Clause 7 is essential. As I said, it is a “standard” clause—that is the word that I used. I cited a number of instances where it appears and I hope that the noble Lord will accept that it in no way enables the board to act beyond the parameters of its powers but, rather, gives it within those powers the flexibility that it will need to decide on things such as information technology and staffing. For the benefit of today’s debate, I hope that the noble Lord will be able to withdraw his amendment and to reflect on the matter further.
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- Lord Campbell of AllowayConservative
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- My Lords, I am very much obliged to the noble Baroness. Of course I will withdraw the amendment, but I do not accept that the clause can stand without qualification, as I suggested, taking the words from the speech of the noble Baroness. I merely say that to avoid misunderstanding. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. Clause 8 [The Consumer Panel]:
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Lord Hunt of WirralConservative- Quote
- moved Amendment No. 40:
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Lord Clinton-DavisLabour- Quote
- My Lords, I want to clarify the phrase “non-practising solicitor”. Does the solicitor concerned hold a practising certificate? That is vital, but there is no mention of it here. In other words, should the holding of a practising certificate be the criterion?
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- Lord Hunt of WirralConservative
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- My Lords, I am very grateful to the noble Lord for having given me notice of his question. I have particularly in mind people who have qualified as lawyers but, say, have pursued a more corporate career and have become a company secretary or some equivalent. That company secretary will often also head up the in-house legal department. In many ways, I am trying to tempt the Minister to see that the amendments do not seek to create a huge opening in the requirements that she has laid down, but instead deal with people who are qualified but non-practising solicitors; that is, they do not hold themselves out to act on behalf of clients. Often they will not have a practising certificate, as such, but they consume legal services. Under the Bill, they would be barred from serving on the Consumer Panel. I beg to move.
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- Lord Clinton-DavisLabour
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- My Lords, all I am asking is that the noble Lord considers my point further. It may be possible to rebut it, but I think that it is relevant, so will he consider it again?
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- Lord Hunt of WirralConservative
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- Yes, of course, my Lords.
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Lord Evans of Temple GuitingLabour- Quote
- My Lords, my noble friend should really save his remarks for a speech rather than intervening on Report in the way in which he has.
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Lord Carlile of BerriewCrossbench- Quote
- My Lords, we on these Benches broadly support the amendment that the noble Lord, Lord Hunt of Wirral, has moved so eloquently. On the point made by the noble Lord, Lord Clinton-Davis, which is plainly important, will the Minister confirm in her reply that nothing in the clause excludes the appointment to the Consumer Panel of a qualified lawyer who does not hold a practising certificate? My understanding of the clause is that the many lawyers who no longer hold practising certificates may be on the panel. Indeed, those of us who have served as chairmen or members of various tribunals and panels around the country at various times know the immense value that that cohort of people, who are often volunteers, give to the decision-making process at various levels. Secondly, we have heard from the Minister and ministerial colleagues during the debates on this Bill that it is for the board to make decisions, wherever possible, on how its functions are carried out. Surely it is right for the board that selects members of consumer panels to be able to make decisions on whether non-practising lawyers who hold practising certificates should be members of the Consumer Panel. I understand the direct answer to the question asked by the noble Lord, Lord Clinton-Davis, to be, “Yes, this is intended to cover people who hold practising certificates as solicitors, albeit not in fact practising themselves”. A large body of business does huge amounts of what one might loosely call block litigation—for example, in relation to debt collecting on a very large scale for credit card companies or councils that have not received payments of council tax. The lawyers who manage that kind of work are non-practising, but they are about as large consumers of legal services as one can imagine. I would suggest, in common with the noble Lord, Lord Hunt of Wirral, that that group ought to be regarded as important consumers. In that context, would it not be right for the board, when it sets criteria and decides who should be appointed to the Consumer Panel, to be able, although not obliged, to select applicants from that cohort to become members of the panel?
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- Lord Campbell of AllowayConservative
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- My Lords, my name is on this amendment. I shall be very short. I declare an interest as a qualified but non-practising member of the Bar. I hope that, having listened to the reasons given in support of this amendment, your Lordships will accept that the amendment is appropriate, indeed requisite, as a matter of practical reality.
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- Baroness Ashton of UphollandLabour
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- My Lords, I am extremely grateful for this interesting debate. I agree with a large amount of what has been said, but there is a problem with these amendments because they technically do not work. It is very interesting to think about what we mean by the consumer in this context. I do not know whether the figure of 40 per cent is correct. It would not surprise me. If we have any statistics on that, I shall try to dig them out today and circulate them around your Lordships’ House. In Committee, we talked a lot about the rationale for setting up the Consumer Panel in the Bill and the opportunity to bring consumers together in order to have that input in a very particular way. There were issues, but I am sure that noble Lords were broadly content with what we are seeking to do. Consumers encompass a wide range of different people. Individuals and small businesses consume legal services, as indeed do government departments, big business, voluntary organisations and others. Under the clause, the Consumer Panel is designed to represent those interests and, indeed, is required to think about its representation. I accept the point made by the noble Lords, Lord Carlile and Lord Kingsland, that we should think about the role of the board, but we want to make it clear in legislation who we want to ensure is included. It is also true that non-practising but legally qualified professionals could serve on the panel. Where we differ slightly is on the important issue of who should sit as a representative of that corporate body. The noble Lord, Lord Hunt of Wirral, answered that by saying that, through their legal departments, many large corporate bodies instruct outside legal professionals, and I maintain that the consumer in that context is the person asking the legal department to instruct the external legal professionals. Just as I, as a Minister, have legal advisers who will instruct parliamentary counsel or indeed external legal professionals to support and advise me, so, too, noble Lords who are not themselves legally qualified in particular areas will instruct as individuals. We are seeking to ensure that the consumers on this panel are not those practising in the legal profession, wonderful though they may be.
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- Lord Carlile of BerriewCrossbench
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- My Lords, I apologise for interrupting the noble Baroness, but I wonder whether she would reflect on what she has just said. The voluntary sector, particularly citizens advice bureaux, already instructs lawyers and will remain in a position to do so, perhaps increasingly so, but its representatives will not be excluded from being on the Consumer Panel. There is an inequality between those who happen to be qualified and hold practising certificates and who instruct lawyers formally, and voluntary organisations doing exactly the same. It does not bear logical analysis.
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- Baroness Ashton of UphollandLabour
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- My Lords, I take the noble Lord’s point, but let me try again. The point that I am making is that this is a Consumer Panel that, under the terms of the Bill, does not have on it people who are qualified practising lawyers. Those who are not practising but might be legally qualified will, in our view, be appropriate to sit on the panel, because they would be representing their corporate body or organisation in a different way. That is the fundamental principle behind what we are seeking to do with the Consumer Panel. We want a range of people who, as the noble Lord, Lord Hunt of Wirral, was absolutely right to say, are representative of the different kinds of organisations and individuals who consume legal services, but we want to look specifically for people who are not themselves practising legal professionals. They may be qualified, but they will be acting as a corporate consumer, a small business consumer or an individual consumer in this context. It is an important point, but it does not take away from ensuring that a range of voices is heard on the Consumer Panel. This is deliberately designed to be about the role of the consumer, not the consumer as a lawyer talking about legal services.
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- Lord Hunt of WirralConservative
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- My Lords, I am grateful to the Minister for giving way. Just to clarify the point, is she saying that the person within a large corporate consumer of legal services who asks the company secretary or the in-house legal department to instruct an outside firm could well sit on the Consumer Panel? Would it be the individual running that part of the business? Is the noble Baroness saying that that person could represent adequately the views of the huge area of corporate consumers of legal services?
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- Baroness Ashton of UphollandLabour
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- My Lords, if the person is not a practising lawyer—they may be legally qualified but not practising—that is what I am saying. To return to the original point made by the noble Lord, within the Consumer Panel it is important that the breadth of consumer interests is represented. The question is how one best achieves that. We would argue that it is best achieved by taking people from large and small organisations, and perhaps individuals, who are consumers but not practising lawyers—they may be legally qualified, but not practising. How a business chooses to do that is up to the business itself. For example, one would ask a large business in the retail sector to consider who best would represent it. What we would not be looking for is the practising head of that business’s legal department. It might choose an individual who is legally qualified but not practising. That is all there is between us here.
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- Lord Campbell of AllowayConservative
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- My Lords, before the Minister sits down, I have a question about procedure. Does she know why any objection was made to the noble Lord, Lord Clinton-Davis, asking my noble friend a relevant question?
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- Baroness Ashton of UphollandLabour
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- My Lords, the only concern on the government Benches is that we are on Report. We have had six full days in Committee, which were extremely interesting. There are practices, which noble Lords developed long before I came to your Lordships’ House, to enable us to engage with the business on Report and complete it satisfactorily. There are 24 groups for this evening, and another for the third day; I would like to be able to consider them all. Some of the debates we have had before—although, I agree, not this one—and we are trying in our own way to ensure that noble Lords have the time to consider what I know are the important issues ahead.
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- Lord Hunt of WirralConservative
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- My Lords, the most important point that the Minister has just made is that she has no criticism at all of her noble friend Lord Clinton-Davis, and I thank him for making a very important point. I have looked through the Companion and cannot see any prohibition. Although we are on Report and we should not have too much toing and froing, the noble Lord had an important point to make, and I am grateful to him for making it. I am also grateful to the Minister for clarifying exactly where we stand on this. We have tried a few times to get it right. I must go back and see whether we can find a way through this, and perhaps return to it at Third Reading. I am grateful to my noble friends for their support. In the mean time, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. [Amendments Nos. 41 and 42 not moved.]
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- Lord Hunt of WirralConservative
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- My Lords, the Minister certainly has a case to answer. My noble friend has set out the background very well. It was my amendment in Committee to establish a practitioner panel. I listened carefully to the Minister and, in view of what she said, decided to dispense with the amendment and not seek to bring it before the House again; but that was on the basis that I had been comforted by her assurances, set out so clearly by my noble friend. I look forward to hearing why we do not have a government amendment and exactly how the noble Baroness intends to proceed.
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Lord WhittyLabour- Quote
- My Lords, I oppose the cumulative effect of the amendments but not because I do not think that the views of front-line regulators have to be taken into account and that consultation should be protected for them, but because Amendment No. 45 refers to treating front-line regulators in the representative as well as the regulatory capacity in the same way that Clause 10 covers the Consumer Panel. The procedures in Clause 10 are there for the Consumer Panel because there is an asymmetry of information and expertise, which needs to be taken into consideration in the Bill so that consumers have some right of representation. Were we to give the same representation rights to the Law Society and the Bar Council, for example, they would have the right to object to any decision of the board and would have the same degree of attention that the Consumer Panel is given in order to redress the imbalance in the normal relationship between the legal services and consumers. I do not fundamentally object to those bodies having a consultative relationship, but I object to the view that they should have the same protection that Clause 10 gives the Consumer Panel. That would unbalance what Clause 10 is intended to provide for the Consumer Panel.
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- Lord Campbell of AllowayConservative
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- My Lords, the noble Lord, Lord Whitty, returns to the question of intervention, on which there have been many discussions. Amendments Nos. 43 and 44 are wholly consistent with Sir David Clementi’s original recommendations and the Government’s earlier proposed intention to ensure that the LSB powers of intervention were exercised only in cases where there is a serious impact on regulatory objectives taken as a whole, rather than a merely adverse impact on one or more of those objectives. Consultation, as proposed by these amendments, is an essential means to implement the powers of intervention in a manner originally intended by the Government to maintain the supervisory role and an effective, efficient front-line regulation by the approved bodies. Your Lordships may think that this matter of principle, to which we return again and again, ought to be recognised as such in the Bill. One might group together certain clauses, such as Clauses 3 to 5 and 40 to 43, for such an exercise. On doing that, one has to distinguish between this statement of principle, which applies only to the LSB and would serve, if expressed, as an amendment to Clause 3, and Amendment No. 5, however redrafted, which would be of generic application to all regulatory bodies and continue to serve as an amendment to Clause 1. I am grateful for the opportunity to contribute.
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- Lord Carlile of BerriewCrossbench
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- My Lords, I will make a very brief intervention about a question of confidence between the Legal Services Board and the profession. The Bar Council, for example, or individual barristers can make whatever representations they like to the Legal Services Board and the Consumer Panel. I have no doubt that such representations will be taken into account, but I am sure that the Bar Council, the Law Society and other representative bodies will want to work in partnership with the Legal Services Board. In doing so, they will want to take their members with them. They need to persuade their members that they are taking them with them. A requirement to consult would give practitioners, particularly in the larger parts of the legal profession, confidence that the Legal Services Board will really listen to representations. I do not myself believe that the amendments would make any real difference to the process that will be carried out but they might make a very significant difference to the level of confidence that exists between, for example, the Bar—my own profession—and the Legal Services Board.
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Baroness Carnegy of LourConservative- Quote
- My Lords, another voice from a non-lawyer might not be inappropriate. I listened carefully to what the noble Lord, Lord Whitty, said, and I see his point. The idea of the panel is to ensure that consumers have a proper voice. To have a provision in the Bill that counteracts that strongly is not a good plan. What the noble Lord, Lord Carlile, has just said is also important. The least that lawyers can expect is to be able under the Bill to make representations of a kind mentioned in these amendments, but that must not in any way act against the provision of the panel. I cannot follow the legal theology of all this, but it seems common sense that lawyers must know that they can make representations, because that is very important to the profession, which has regulated itself up to now—in my view, very adequately. The Government should pay attention to this, but I have no idea whether these amendments are the right approach.
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- Baroness Ashton of UphollandLabour
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- My Lords, I am grateful to noble Lords. The noble Lord, Lord Carlile, and the noble Baroness, Lady Carnegy of Lour, are absolutely right to raise the issue of confidence. I seek to ensure in the legislation that the level of confidence among consumers, the public and the legal profession is at the right level. The noble Lord, Lord Kingsland, who read out my words, is completely right. I agreed that I would take away the principle of mutatis mutandis—which I did not understood until noble Lords explained it to me. I was only making a vague joke when I said that I did not understand it because my Latin was too rusty. I said that we would ensure that we had equality of provision of opportunity for consultation in the legislation. I stand by that. I took the amendment away—
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- Baroness Ashton of UphollandLabour
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- My Lords, the amendment was about mutatis mutandis. I think that I was very clear to noble Lords that I sought to ensure that whatever I brought forward in the Bill—
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- Baroness Ashton of UphollandLabour
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- My Lords, if the noble Lord disagrees, he can divide the House; that is fine. It is up to him. I want to be clear about what I understood that I did, and the noble Lord can perfectly legitimately challenge that. I accepted the principle of the amendment; I did not accept the wording, or I would have accepted it on the Floor of the House. I said that there was an issue about enabling the professions to talk to and be consulted by the Legal Services Board on a level with that of the Consumer Panel. My noble friend Lord Whitty indicated, and noble Lords are in broad agreement, that there is an understanding that we need to set up the Consumer Panel to enable it to be formally consulted because it exists in a different way and will come into being only by being brought together by the Legal Services Board with the current regulators. I absolutely agree that I took the amendment away. I talked with my ministerial colleagues and took advice on it; we talked to a variety of people, and my honourable friend Bridget Prentice, the Minister responsible for the policy, looked at the issue very carefully. The advice that I got back was that the Bill provides a variety of means whereby consultation is available, both specifically as the noble Lord, Lord Kingsland indicated—
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- Lord Campbell of AllowayConservative
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- My Lords, I have only one quick question: what is the objection to this amendment? What goes on with colleagues is one thing, but what is the objection to this amendment in the way in which it is put before the House today?
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- Baroness Ashton of UphollandLabour
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- My Lords, one of the disadvantages of the noble Lord interrupting is that I cannot complete my speech. If he will wait until I have finished he may well need to ask me that question if he feels that I have not explained the matter properly. I was trying to explain the process that I had gone through and to give reasons. The noble Lord may disagree with them and feel that I have not explained them properly; that is completely reasonable, but at this stage in our proceedings I cannot always necessarily answer questions with the speed and brevity that he would like because other noble Lords need to hear the rationale. I accept the principle that there should be equality of representation on behalf of consumers and professionals, but I do not accept that the amendments before us achieve that. We need to have a Consumer Panel for the reasons that I have given, but giving general rights to approved regulators to have their representations heard in addition to their rights to make representations on the large number of provisions in the Bill and their ability to set out regulatory arrangements that are in the interests of authorised persons would unbalance the system again. As I say, noble Lords can disagree with my conclusions. I accept the principle of making sure that we have equality and consultation. When I looked at how to produce an amendment that might achieve that, I was strongly advised that we had already achieved it. Therefore, I did not table any further amendments. Noble Lords may agree or disagree with that but I did it in good faith. We have well established, well organised and possibly well funded bodies that represent the interests of authorised persons. They will be unshackled from their regulatory responsibilities so that their representative arms can lobby the board more effectively and freely than they do at present. The board will want to ensure that it takes on board all sides of the argument before coming to a decision or taking action; indeed, it is in its interests to do so as it can be judicially reviewed if it comes to an unreasonable conclusion. If the board fails to consult a body that could be directly affected by its action, that would be inconsistent with the principles of best regulatory practice which Clause 3 requires the board to have regard to. The board must listen to and consult the bodies under good regulatory practice. It also knows that it can be judicially reviewed if its decisions are arrived at unreasonably. In addition, throughout the Bill there are specific ways in which the board must consult. Added together and weighed against the formation of a Consumer Panel, it is our view that we have achieved what your Lordships desired and the principle, which I completely accept, of equality of representation. Although the noble Lord, Lord Kingsland, may feel that I have not fulfilled my obligations, I took away the principle in good faith and believe that we have achieved it. Noble Lords will reach their own decisions on that accordingly.
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- Baroness Ashton of UphollandLabour
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- My Lords, let me be clear. I accept full responsibility for my role in relation to this Bill. When this Bill is in your Lordships’ House—whether it begins here or comes here after another place—and while I am responsible for it, I take responsibility for the policy. My references to my honourable friend are to make sure that noble Lords know that I consulted the person who is responsible for developing the policy; otherwise noble Lords might feel that I had made an arbitrary decision without consulting my colleagues. I refer noble Lords to the Tribunals, Courts and Enforcement Bill, for which I hold policy responsibility. Members of another place may refer to that fact during the passage of the Bill through that House. In a sense, it is a sign of respect and recognition of that role. That is what I seek to do. Of course, my noble and learned friend, whom I have consulted on all these issues, takes absolute and overall responsibility for the Bill, but I take responsibility for my commitments, my words and the work that I do.
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- Lord Hunt of WirralConservative
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- moved Amendment No. 46:
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Viscount BledisloeCrossbench- Quote
- My Lords, I confess that I am amazed by the provision that seeks to exclude wills from the provisions of the Bill. Schedule 2(5), part of which the noble Lord’s Amendment No. 48 seeks to leave out, states that: “‘Reserved instrument activities’ means … preparing any instrument of transfer or charge for the purposes of the Land Registration Act … or preparing any other instrument relating to real or personal estate for the purposes of the law of England and Wales”. Sub-paragraph (3) states that “instrument” includes any contract for the disposition of land, “except a contract to grant a short lease”. So, reserved activities are covered if I want to let a house or some land other than on a short lease, or if I want to give away a bit of my real estate to someone during my lifetime. However, for some extraordinary reason, on my death, when I dispose of all I own and set up some trusts, or something for that purpose, that is not covered. I do not understand how a small transaction inter vivos is caught, but this total disposal of my property on my death is excluded, can be done by anyone and is not an activity governed by the Bill. I look forward to some enlightenment.
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- Lord Evans of Temple GuitingLabour
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- My Lords, there has been full discussion on this matter at previous stages of the Bill and the question as to whether will writing should become a reserved legal activity has, as my noble friend has said before, been under consideration for some time—most recently since the announcement in March 2005 by my noble and learned friend the Lord Chancellor and Secretary of State that his department would consider the case for the regulation of will-writing and estate administration services. If I may, I will read out the next paragraph of my speaking note and then return to the point made by the noble Lord, Lord Hunt. Since that time we have worked closely with consumer bodies, the legal profession, those outside that profession who currently provide will-writing services, and the Office of Fair Trading, and have asked them to provide us with any evidence that might suggest that there is a systemic failure in the current will-writing market and that consumers are being put at risk as a result. The DCA has met the Institute of Professional Willwriters, the Office of Fair Trading and others to discuss voluntary jurisdiction. The DCA has asked the institute to provide the OFT with a draft set of rules for consideration under the code. Our view is that if there is any evidence of systemic failure, the LSB may make a recommendation to the Lord Chancellor under Clause 23 for will-writing services to be added to the list of reserved legal services. We acknowledge that there may be a problem. We want evidence, which has not been forthcoming, although one or two points have been made at earlier stages of this Bill. But we are not set against this; we just wish it to be discussed. As I have said, we need evidence that there is a problem that needs to be solved.
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- Lord Hunt of WirralConservative
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- My Lords, I am grateful to the noble Viscount, Lord Bledisloe, for his compelling and persuasive intervention. I am slightly confused by the Minister’s reply because the chairman of the Institute of Professional Willwriters, Mr Paul Sharpe, contacted me on Monday to say that the institute had submitted a report—and he has sent me a copy of the report—demonstrating that voluntary regulation is not working and containing some of the points that I raised at the Committee stage. He said that there has been no further contact with the DCA since July 2005, following which it submitted the report in September 2005. As I understand it from the Minister, he is under the impression that there has been continuing contact. The only way forward here is to get an assurance from the Minister that a further meeting will take place so that we can at least regularise this position. I see that the noble Lord and the noble Baroness are nodding and, as far as I am concerned, if there is to be a further—
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- Lord Evans of Temple GuitingLabour
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- My Lords, the institute has been in regular e-mail correspondence with the department. The department has not seen the report that the noble Lord, Lord Hunt, has in his hand. I think that the way through this is for there to be meetings between now and the next stage of the Bill so that we can sort this out. I do not think that there is any real disagreement here; there is obviously a procedural problem that needs to be sorted.
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- Lord Hunt of WirralConservative
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- My Lords, in response to the noble Lord’s points, I beg leave to withdrawn the amendment. Amendment, by leave, withdrawn. Schedule 2 [The reserved legal activities]:
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- Baroness Ashton of UphollandLabour
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- moved Amendment No. 47:
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- Baroness Ashton of UphollandLabour
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- moved Amendment No. 49:
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- Lord Evans of Temple GuitingLabour
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- moved Amendment No. 50:
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- Lord Evans of Temple GuitingLabour
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- moved Amendments Nos. 51 to 62:
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- Lord Evans of Temple GuitingLabour
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- moved Amendments Nos. 63 to 70:
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- Lord Evans of Temple GuitingLabour
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- moved Amendments Nos. 71 to 82:
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- Lord Carlile of BerriewCrossbench
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- My Lords, I think that I am happy to say that I did not participate in the debate in Committee on this topic and that I was not present. However, I have enjoyed reading, with loving attention, every word of that debate. We on these Benches entirely agree with what has just been said by the noble Lord, Lord Kingsland. However, a practical problem occurs to me. During the debate on Monday, I declared my interest as head of a fairly large set of barristers’ chambers in London. The way the system operates at the moment is that, from time to time, the General Council of the Bar—which was accurately described a few moments ago by the noble Lord, Lord Kingsland—has to react to problems that have arisen. On the whole, it reacts to them quickly. From time to time, I, as a head of chambers, receive an email telling me that there has been a change to the Bar Council’s code of conduct, which is an important document that is frequently cited in court when issues of ethics arise during cases. If a head of chambers is responsible, he or she ensures that the communication from the Bar Council is instantly circulated to all barristers and clerks so that it is known to all the barristers within the collegiate atmosphere that still exists in many sets of chambers. Therefore, within a very short time of a critical incident arising, a change in the code of conduct can be communicated and put into practice. If necessary, it can be done in a couple of days. Without the amendment, the legislation would seek the inevitable introduction of a cumbersome, bureaucratic procedure, which will mean that an approved regulator—whose code of conduct so far as I am aware has rarely been criticised—will not be able to sustain that very useful and active discipline. I cannot believe that that is the Government’s purpose, but it is the result of the legislation as it stands. I ask the Minister to respond to that point as it is causing some perplexity among those of us who practice at the Bar—led, as we have been from time to time with great practical effect, by people such as the noble Lord, Lord Brennan, who, when chairman of the Bar Council, took a leading part in ensuring that the code of conduct was kept up to date in the way I have described.
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- Baroness Ashton of UphollandLabour
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- My Lords, I am not sure that my twelfth intervention will make a huge amount of difference. For the benefit of noble Lords who have not had the joy of participating in debates or reading Hansard, let me say that we were looking at two things: first, whether you had a situation where the board gets all the changes and then makes a decision on whether it wishes to have certain changes exempt from the process or with minimal review by the board; and, secondly, whether the board at the beginning says, “We don’t want to see the following things” and that only those it wished to see should come forward. We looked at the matter in great detail. We considered how it would look if we redrafted it, and we had a good think about it. It is a choice we had to make, which I still think is the right one. We sought to say that our principle in setting up this new framework would be that changes should be sent to the board and that the board can say, either in the course of receiving those changes or, indeed, in advance, that it does not wish to receive certain ones, that some can be exempt and that some require merely minimal approval. The noble Lord, Lord Carlile, made a point about wanting to have the code of practice changes. I note his tribute to my noble friend Lord Brennan, which I share. We would want those done in the same way. We do not want this process to be bureaucratic. The question really came down to whether it is right that the board in advance says, “We don’t need to see any of the following aspects”, or should it receive them and then make a decision later about which it wishes to have exempt. So the question was: did the decision on that rest with the board or the regulator? It is not a question of trust. We hope that this will be one of the ways they will work closely together in partnership. However, we felt that it was important to leave the matter with the board. It was a choice we made. We do not think that the outcome will be hugely different because we believe that the board will swiftly move to say, “It is quite clear there are areas where we do not need to see the changes that are being made, or where we can deal with them very quickly”. What I do know is—not in this area but in other areas of life—that small changes sometimes have big effects. Therefore, it is important for the new regime to enable the board to see the kind of changes being made and to be able to consider the effects being made. That was a decision we took.
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 84 to 91:
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- Baroness Ashton of UphollandLabour
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- moved Amendment No. 92:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 93 to 97:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 98 to 102:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 103 to 107:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 108 to 113:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 115 and 116:
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- Baroness Ashton of UphollandLabour
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- moved Amendment No. 118:
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- Lord Carlile of BerriewCrossbench
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- My Lords, we on these Benches agree with the noble Lord, Lord Kingsland, that Clause 30 imposes too light a trigger on the exercise of what, on the face of it, are draconian powers that could lead to an approved regulator ceasing to be so approved. The concept of compatibility with the regulatory objectives as a whole is recognised as an holistic, inclusive concept in Clause 3. We believe that that concept should be in Clause 30. Indeed, it is plain common sense that there should be this inclusive view of what Clause 3 calls, “compatible with the regulatory objectives”. One can think of many examples in which there could be conflict between some of the regulatory objectives set out in Clause 1(1) but not with the regulatory objectives as a whole. A simple example of this is, “protecting and promoting the interests of consumers”, in Clause 1(1)(c). There may be very good reasons for a professional body saying that no lawyer should conduct a clinical negligence case unless that lawyer has some training and experience in conducting those cases. However, part of the regulatory objectives in Clause 1(1)(d) is to promote, “competition in the provision of services within subsection (2)”. My understanding is that in north Wales, for example, only one solicitor—there may be more now, but certainly a few months ago there was only one—had the approval to carry out clinical negligence cases and so receive funding from the Legal Services Commission. There is plainly a conflict between competition and a decision that only people who are really competent to do certain types of cases should do them. The provisions we are considering could be triggered not by the consideration of those two regulatory objectives together but by one of them alone without considering the other. It seems a matter of practical common sense that the approach taken in Clause 3(2)(a) should be consistently applied throughout the Bill.
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Baroness Butler-SlossCrossbench- Quote
- My Lords, I retain the concerns that I expressed earlier. This ought to be looked at. To have a single adverse impact is inadequate to achieve the light touch that is needed.
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- Lord Hunt of WirralConservative
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- My Lords, I agree. At paragraph 178 of the Joint Committee report on the draft Legal Services Bill we unanimously agreed that amendments of this type should be brought forward. We regret that the Minister has not yet done that and await her words with great interest.
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- Lord Campbell of AllowayConservative
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- My Lords, I support this amendment, but I have to do so having moved Amendment No. 5, which is related to this amendment. There, I deal with the balance of the relevant regulatory objectives as the basis for a reasoned decision. This amendment rides totally in relation to that. It is very interesting that this balance was approved by the Minister on the first day of Report. She said: “The board, while operating within the objectives, must balance those objectives appropriately, as noble Lords seek”.—[Official Report, 16/4/07; col. 102.] There is not much between us on the fundamental principle. If there is, I do not know what it is. On that basis, I support the amendment.
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Lord BrennanNon-affiliated- Quote
- My Lords, this group of amendments deserves serious consideration by the Government. Here is a Bill to introduce a super-regulator, the Legal Services Board. They have said that it can be clothed and armed with heavyweight powers but that it will operate with a light touch. Such confidence in regulatory self-denial suggests inconsistency with ordinary human experience. I therefore invite the Minister to consider this state of affairs. If you have a series of separate objectives which can be separately considered, and any one of them will allow the trigger of intervention, the legal services world, to be so regulated, would reasonably expect the board at the very least to have a statement of policy on how it will implement these single objectives at any one time or in combination. These amendments suggest, by the introduction of the words “one or more” or “significant”, that you create a state of affairs where there is a policy base for the Legal Services Board to act on. “Significant” is a pretty poor adjective, but if it is there to achieve compromise then it is better than nothing. It might be said that it is the kind of word which is so vague as to be incapable of challenge legally or intellectually, but I remind the House that in the Corporate Manslaughter and Corporate Homicide Bill we enacted the use of the word “substantial” as a core ingredient in the creation of a new criminal offence, confident that any jury would understand how it was to be understood and applied. I hope that in dealing with the amendments it will be accepted that this is a desire not to control power exercisable by the Legal Services Board but rather to seek a framework in which the legal services world can operate more efficiently.
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- Baroness Ashton of UphollandLabour
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- My Lords, my ambition is that the Legal Services Board will never have to use its powers. The difficulty is that when one sets up in legislation a system that enables action to be taken when things go wrong, the implication or assumption is that the relationship will be a negative one. Our ambitions are more positive. We have talked about partnership, a light touch and how we expect the regulator to operate in an overarching and not an overbearing way. On that I think we are all agreed. Where the board might find itself having to use these powers, we are also all agreed that they should be used appropriately, expediently and efficiently. They should not be used in any inappropriate way, and that is why we have laid out in Clauses 30 to 34 what the powers are, how they are to be used and so forth, and why in Clause 48 we have enabled the board to produce policy statements about its powers and other matters. It is also why in Clause 3 we have said that the board must act within the best regulatory practice. We believe that the objective sought by noble Lords, particularly in the example given by the noble Lord, Lord Carlile, of medical negligence cases, would be covered by the combination of regulatory objectives and the way in which the board will operate. The noble Lord gave a good example of where I would not expect the board to use its power. The question is whether there could be circumstances where problems had arisen with one of the objectives and it was felt that action should be taken. The difficulty with the amendment is that it would mean, in effect, that the board would have to look at all the objectives to see whether they, too, were being—I use the word advisedly—flouted. I cite as an example access to justice, an extremely important issue that we have debated and will continue to debate on Report. There could be an issue on which the board felt it had to act but, on the basis of this amendment, it could not act because the other regulatory objectives were not being damaged. That would hinder the operation of the board in a way that I do not think noble Lords want. The adjective “significant” was proposed, although the noble Lord, Lord Kingsland, said that other adjectives could be used. Again, the difficulty for the board is that “significant” when considered from the legal perspective—noble Lords know that I am not a lawyer but I do take legal advice—could hinder the board from operating. For example, if the board were working with a small regulator, could a case where only very few people were affected, albeit extremely adversely, be considered significant? Ultimately it would be for the courts to decide, but from the perspective of this legislation, we do not want to put the board in a position where it feels disempowered to act because of the word “significant”. However, we believe that the objectives sought by the noble Lord, Lord Kingsland, in this amendment are already achieved in the Bill. Noble Lords are right to want to ensure that the board operates properly, that it considers carefully what is happening and why, that it does not take inappropriate action, is light touch in its operations and conforms to good regulatory practice. All that is already set out in the Bill; therefore there is nothing between us in terms of what is required.
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- Viscount BledisloeCrossbench
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- My Lords, I should like to understand what the Minister was saying a little earlier. Is she saying that the condition proposed by the amendment, “an adverse impact on the regulatory objectives taken as a whole”, would only be met if all the objectives were adversely affected? I do not understand it that way. As I understand it, you look at the totality of the objectives and ask whether some of them are adversely affected and whether that consideration is not outweighed by improvement to the other objectives. Surely that is what one is meant to be doing. If the Minister is really saying that the provision can only be triggered if all the objectives are adversely affected, I see great force in her argument, but I do not think that that is what the amendment begins to say.
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- Baroness Ashton of UphollandLabour
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- My Lords, the noble Viscount—for me, anyway—makes my point. “Taken as a whole” means taken as a whole; if a regulatory objective that said “supports the constitutional principle of the rule of law” were being damaged in some way, but every other objective was being met in a way that we would applaud, the board, according to what I believe the noble Viscount said, could not act. I am saying that the board must be able to act. Of course—I have been explicit about this, and I think I have been quoted on it—the balance with what is happening, which is where the example of the noble Lord, Lord Carlile, comes in, is critical. That is what good regulatory practice says under Clause 3, and it is what the board is required to do. Under the amendment, the board simply could not act if there was a serious problem on the rule of law, access to justice or other aspects of the regulatory objectives that noble Lords might feel are more important than others but the other objectives were not affected. That is not what we would wish to see.
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- Viscount BledisloeCrossbench
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- With respect, my Lords, the Minister misunderstood the intent of the amendment, as I understand it, and its wording. “Taken as a whole” is very different from “all the objectives”. If the Bill said, “had an adverse impact on all the regulatory objectives”, I would see her point, but it does not. I think she seriously needs to think again about the effect of the amendment.
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- Baroness Ashton of UphollandLabour
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- My Lords, I am grateful to the noble Viscount—
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- Lord Campbell of AllowayConservative
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- My Lords, I have a simple question. Does the Minister really understand what is being said, and said particularly well by the noble Lord, Lord Brennan: what we are creating is, so to speak, a structure for a judicial approach? That is the basis; we are not saying any more than that.
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- Baroness Ashton of UphollandLabour
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- My Lords, I understand my noble friend Lord Brennan—he has given me some of his time to discuss this—and the noble Viscount. But I wish to explain how the reasons for which noble Lords seek this provision in the legislation are already dealt with in the Bill therefore they need not move their amendments. The amendments as framed would not have beneficial implications for the regulatory framework that we seek to set out. That is the fundamental difference between us. I am arguing that the amendments are unnecessary to achieve what is required and can therefore safely be withdrawn without fear that there will be a problem in the running of the Legal Services Board.
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- Viscount BledisloeCrossbench
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- My Lords, I understand the Minister—
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- Lord Evans of Temple GuitingLabour
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- My Lords, we are on Report, and the Minister has now sat down.
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- Viscount BledisloeCrossbench
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- My Lords, am I in order or not?
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 124 and 125:
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- Baroness Ashton of UphollandLabour
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- moved Amendment No. 131:
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- Baroness Ashton of UphollandLabour
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- My Lords, I am grateful for the explanation that the noble Lord has given, but I am not persuaded that I want to go further. The noble Lord was gracious in seeing that I had responded to the comments made in Committee and in our conversations with the Law Society and the Bar Council. We do not want to see the fining power in the same category as the powers to intervene directly with approved regulators or to cancel an approved regulator’s designation. Those are very different, but that would be the effect of Amendment No. 135. We do not believe that the fining power is of the same order of magnitude. On a more practical level, the amendment would reduce the board’s ability to make a flexible response to a regulatory failure. The argument in the Macrory review, as noble Lords will know, is that the move is towards greater flexibility where sanctions are used. We have already said many times in the passage of this legislation that we hope that these sanctions will not be used. However, where they are used, the argument is to enable those using them to have the greatest possible flexibility to use the most appropriate sanction at any given time. I indicated that, in our discussions with consumer groups, they expressed great concern that we should not constrain the fining power because they saw it as an important part of a regulator’s toolkit, which, if it were to be used, would send the clear and important message that the regulator was willing to act on their behalf. We believe that we again have the right balance. We have made a move to accept in part what the noble Lord, Lord Kingsland, said in Committee about my previous amendments following discussions with the regulatory bodies, but it is important to retain flexibility and, therefore, we must ask the noble Lord to withdraw his amendment.
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 136 and 137:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 139 and 140:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 141 to 143:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 144 and 145:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 149 to 151:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 152 to 155:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 156 to 158:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 162 to 164:
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- Baroness Ashton of UphollandLabour
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- moved Amendment No. 165:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 166 to 169:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 170 to 173:
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- Lord Carlile of BerriewCrossbench
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- My Lords, I do not want to repeat what was said by others at the previous stage of this Bill, particularly as my noble friend Lord Maclennan is inclined to use colourful language from time to time. He described Clause 48 as an “incubus”, prompting an exchange about the writings of Edgar Allan Poe, which the Minister, understandably, told us she had no time to read at present. I also think that my noble friend Lord Maclennan described the Legal Services Board as a “behemoth” the other day. Whatever colourful language one uses, it is very important for approved regulators to know what it is. We have heard repeated statements of policy, which of course we take at face value, stating that this is intended to be light-touch regulation. In Clause 48, we have a single clause that deals with the way in which policy statements are to be issued, and the approved regulators will look to this clause and what goes with it to understand their relationship with the Legal Services Board. If ever there was a place where the policy should be expressed and where it should be made clear that the policy is that there should be light-touch regulation, this is it. I hope that the Minister will accept that these amendments, whether or not the wording is perfect, are intended to ensure that, in this crucial policy section of the Bill, the approved regulators will see a demonstration of that light-touch approach. It is not anywhere in the Bill at present, and this surely is the place in which to position it.
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- Lord Hunt of WirralConservative
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- My Lords, I strongly agree with my noble friend Lord Kingsland who put this amendment and those linked with it in context. This is probably one of the most important debates that we are going to have. During the Joint Select Committee meetings, we spent considerable time seeking reassurance from the Minister that the regulator would administer a light-touch system of regulation. I recall that the Minister’s colleague, Bridget Prentice, emphatically told us just that, “Where the approved bodies are operating effectively, the LSB will leave them to get on with that job properly”. That has been the whole basis on which we have proceeded. I await the Minister’s words with great anticipation, as I sensed, during that important debate in Committee, that she was exceedingly sympathetic to the approach that we are now taking. I look forward to her accepting this important amendment.
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Lord Mackay of ClashfernConservative- Quote
- My Lords, I had understood that the noble Baroness clearly embraced the principle of light touch—or however one cares to express it. So far, I have not found in the Bill anything that expresses that. I do not think that I would expect to find the expression “light touch” in the Bill but I would expect to find words that convey that impression to me. Up until now, I have not seen them. Maybe the Minister’s reply will demonstrate that for the first time.
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- Baroness Ashton of UphollandLabour
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- My Lords, I am always trying to address concerns raised by the noble and learned Lord, Lord Mackay of Clashfern, with great trepidation. I hope that I will succeed, but I do not pretend that I have great confidence. As the noble and learned Lord said, this is about light-touch regulation. As for the language of the noble Lord, Lord Maclennan of Rogart, I blame his education at Balliol; I hope he reads this. I was and have been sympathetic to many of the issues raised because there is nothing between us in wanting to establish the right relationship with the supervisory regulator, one which is light-touch but with powers to act if necessary. The question is always how to translate that into legislation, as noble Lords who have stood at this Dispatch Box in more eminent positions than mine will know. It is also important that, in trying to further define legislation, one ends up changing, altering, constraining and restricting how a body may operate. The Bill sets the board as an oversight regulator, and makes it supervisory in nature. We recognise the significant benefits in this model. It is entirely right that approved regulators have the freedom to make the right regulatory decisions, in keeping with their duties under Clause 27 and in line with best regulatory practice, but should the board need to—and I hope it does not—it must be able to take effective action. Trying to further define what is called the B+ model, with which noble Lords will be familiar, in statute may be potentially restrictive. In Committee, I expressed concerns about the amendment to Clause 48, in particular about the formulation of limbs (b) and (c), which set new thresholds over and above those already in the Bill. For each of the regulatory powers, the board must already meet statutory criteria and we have set out clear procedures that must be followed before a power is used. Let us not forget that Clause 48 already obliges the board to make policy statements in respect of how it will exercise its powers under the Bill, and these will need to be consistent with the principles of transparency, proportionality and the other better regulatory principles in Clause 3, which apply to the exercise of all the board’s functions, including the making of policy statements. Within the legislation, we have already met the objectives that the amendments seek to meet, through the role of the regulatory bodies in Clause 27 and how Clause 3 operates. My difficulty is that the amendments move us beyond that, to constrain and change in a way we would not be able to accept. I have enormous warmth towards the objectives behind these amendments, but they do not take us any further forward. Rather, they constrain.
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- Lord Carlile of BerriewCrossbench
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- My Lords, I apologise for interrupting the Minister. She referred to Clause 27, which is a good example of the complaint that those of us who have spoken to the amendments are making. Where in Clause 27—or anywhere else in the Bill, for that matter—do we find any concession to the discretion, judgment and competence of approved regulators? They have been much praised in debate, but are barely recognised or praised in the Bill. The Minister speaks of a light touch, but Clause 27 has a heavy hand. Should not something in the Bill be seen to be statutory light touch?
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- Baroness Ashton of UphollandLabour
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- My Lords, my interpretation of Clause 27 may differ from that of the noble Lord. It says, of the approved regulator’s duty: “In discharging its regulatory functions … an approved regulator must comply with the requirements of this section”— and that it, “must, so far as is reasonably practicable, act in a way … compatible with the regulatory objectives, and which the … regulator considers most appropriate for the purpose of meeting those objectives” . It then says that the regulator, “must have regard to … the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed [and] any other principle appearing to it to represent the best regulatory practice, and … the public interest”. Within that context, that reflects the approved regulator’s duty and enables it to act within the principles set out in the Bill. The noble Lord may disagree with me—I realise he does from his expression and head movements—but we have achieved that, and I hope that the noble Lord, Lord Kingsland, will withdraw his amendment. We are on Report, I am sitting down.
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- Baroness Ashton of UphollandLabour
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- moved Amendment No. 175:
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- Baroness Ashton of UphollandLabour
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- My Lords, I am grateful to the noble Lord for raising this issue. He is right that we have had a detailed conversation with the ICAEW and shared with it our thinking about what we might seek to do and our decision in the end. In all the areas that I have looked at further, I have thought through the policy implications, discussed them with the appropriate people and, where necessary, brought together ideas to see what an amendment might look like. On that basis, we have tried to see whether we would add anything to the Bill or whether, without meaning to, we could create confusion or add burdens. Clause 53 places a duty on approved regulators to take account of other regulatory regimes. They are required not only to take steps to prevent regulatory conflict and avoid unnecessary duplication of regulatory requirements but also to provide for the resolution of regulatory conflicts. These duties apply to any approved regulator whose regulated practices include non-lawyer professionals, such as accountants or chartered surveyors. The Bill allows the board to play a role in resolving disputes between approved regulators and external regulatory bodies, provided that the board and the regulators consent and applicable statutory and other provisions allow it. Amendment No. 176A makes that more explicit, but it does not change the policy. The amendments do little to help prevent regulatory conflict; Clauses 51 to 54 already provide for that. However, they would place a further burden on approved regulators, who would have an obligation not only to address regulatory conflict with external regulators but also to consider formally and act upon any applications about specific instances. They would increase the pressure on approved regulators, who might be concerned about the possibility of a legal challenge because they had failed fully to address approaches from external regulators. They would apply a potential further statutory burden on the board by requiring it to consider such additional references as may be generated as a result of these amendments. One of the key reasons that bodies enjoy the status of approved regulator is that they are judged responsible; that is, as bodies of experience and substance which the Government, in taking forward Sir David Clementi’s B+ model, have clearly entrusted with the day-to-day regulation of members of the legal profession. Noble Lords will know that that background is an important aspect of what the Government seek to do. They are responsible bodies, and we expect them to behave as such—they do. We expect that approved regulators would not only want to deal with any cases of regulatory conflict—I think that most, if not all, already maintain comprehensive rules on dealing with conflicts of interest—but they would actively want to avoid or resolve any such conflicts. We believe that the duties set out in the Bill are sufficient to encourage approved regulators and ensure that they take a proactive approach to dealing with external regulatory conflict. Having looked very carefully at what this amendment would do, I see no justification for change here. Within the framework that we have set up and with the rules that they will have, these responsible bodies are perfectly capable of resolving these issues. I hope the noble Lord will withdraw his amendment.
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 177 to 180:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 181 and 182:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 183 to 186:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 187 to 192:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 193 and 194:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 200 and 201:
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- Lord Carlile of BerriewCrossbench
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- moved Amendment No. 202:
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- Lord WhittyLabour
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- My Lords, I recognise some of the anxieties that the noble Lord, Lord Carlile, points to. However, it is certainly the view of most consumer organisations that there should be some flexibility in the provision of service and in combining different services that are related in terms of the consumer experience, particularly those that involve buying and selling property and other transactions that require not only a lawyer but a lot of other areas of expertise, which could be brought together. The noble Lord seems to think that the movement would all be one way. Apart from what he said in his last remarks, he sees Tesco taking over legal practices. But actually many of these solicitors in small towns will be able to expand into providing multiple services to consumers in a one-stop shop. They will be in a far better place than the supermarkets or even the estate agents in so doing. In his earlier remarks, the noble Lord failed to recognise that we are not plunging into a completely free market. This is a regulated, licensed introduction of an alternative business structure, which still has legal standards and professionalism at its heart, but which brings those services to the consumer together with other related services that the consumer may well want. I do not regard the Bill as allowing completely free rein to establishing an alternative structure to the present ring-fenced legal professions. However, I recognise that the entrepreneurship of legal professionals could well be stimulated by that possibility, as well as by other businesses and services combining and enhancing the services that they offer to the public by bringing legal professionals into their role. From the consumer point of view, with a one-stop shop and the ability to cross-refer between the various professions with which you have to deal, especially in relation to property transactions, which, are, after all, the biggest financial decisions that people make in their lives and the largest use that most people make of lawyers, there is obvious synergy in providing through the alternative business structure. There are safeguards in the regulatory structure; indeed, there are more safeguards in the responsibilities on the licensing authorities, which are to be debated in later government amendments. So the dire picture that the noble Lord presents is wrong. We certainly should not dive into this without safeguards but, on the other hand, I can see enormous benefits for consumers in introducing this degree of competition and stimulus to innovation in providing such services.
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- Lord Campbell of AllowayConservative
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- My Lords, in the questions to those who gave evidence to the Joint Committee, I raised a series of problems from my experience when I was, in a sense, part of a similar set-up in Brussels. I will not go into details, but it related to the retention of one’s independence as a member of the Bar when in a business relationship of sorts with accountants. I am very worried about this, for the reasons recorded, which I shall not express again, concerning the independence of legal advice and, hence, its quality. Therefore, I go along with my noble friend Lord Kingsland. I do not feel that I am in a position to expunge the clause, but I am worried. I would like an effective monitoring system—not a licensing arrangement at large, but one that is controlled by statute—and, perhaps, a pilot scheme. I entirely recognise the terrors expressed by the noble Lord, Lord Carlile of Berriew, but that is the world in which, somehow or other, we must live.
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Lord Neill of BladenCrossbench- Quote
- My Lords, reference has been made to an amendment that I tabled, with the subsequent backing of other Members of the House, which is a long way down the batting list at No. 637A. Those who followed our debate in Committee may recall that I spoke about Part 5. I do not think that the noble Lord, Lord Whitty, was there, but I picked up from what he had said earlier a worry, from a consumer point of view, about access to justice. I certainly quoted the views of the noble Lord, Lord Carlile of Berriew, and of his colleague, the noble Lord, Lord Thomas of Gresford. The noble and learned Baroness, Lady Butler-Sloss, who is no longer in her seat, expressed fears about access to justice in the West Country. Suffice it to say today that I am looking forward to the opportunity to present that amendment. Naturally, I sympathise with many of the statements of fact and projections that have been made by the noble Lord, Lord Carlile. In essence, we are rushing into this on an inadequate basis of fact, testing and research. As a House of this calibre, we have no right to be doing this without trying to inform ourselves very much better than we are informed today. I know that the Minister will say, “Ah, but I have sent you a lot of books since then”. It is certainly true: there is a stack of papers starting with papers from Sydney, New South Wales, from the Commission in Brussels and—a little nearer to home—from learned professors and so on. It is very good for me to read all this, or part of it, but the projections made by the noble Lord, Lord Carlile, about what may go wrong are very telling, and I shall return to the theme later.
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- Baroness Ashton of UphollandLabour
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- My Lords, I am grateful to noble Lords who have spoken. In Committee, we had useful and important debates on issues that were clearly of great importance to your Lordships. I share the concern. We talked a lot about rural communities in the context of previous experiences, and mentioned the corner shop and the post office. My noble friend alluded to the fact that Part 5 might provide opportunities for small practices to expand to enable them to survive more effectively in rural communities. That is certainly our ambition. We have also talked a lot about access to justice. We will, I hope, consider that more fully when we discuss later amendments. Monitoring is also very important. As the noble Lord, Lord Neill of Bladen, said, he has tabled an important amendment relating to monitoring. I shall focus entirely on the effect of removing Part 5, which the amendment would do. I shall not pretend that I am not disappointed to see that the amendment has returned, because one of the important aspects of our deliberations in Committee was, I felt, that noble Lords were trying to improve, rather than remove, Part 5. We talked at enormous length about the opportunities that Part 5 could give to providers and consumers and I thought that some noble Lords felt that we should encourage that as long as—this is critical—the appropriate safeguards were in place. The noble Lord, Lord Kingsland, is entirely right that my noble friend Lord Whitty shared his concerns about ensuring that those safeguards were in place. My ambition is therefore that we should discuss those safeguards and take note of the way in which the Government have sought to address them. That will enable me to explain what we have sought to do and noble Lords to move their amendments and to have that very important debate. If we remove Part 5, we do not prohibit alternative business structures. We inhibit their development, for sure, but we do so without establishing the important system of regulatory safeguards in the legislation to ensure that this develops properly. Noble Lords know that limited forms of alternative business structure practice will be able to continue to develop under the existing framework. Section 66 of the Courts and Legal Services Act makes it clear that nothing in the Solicitors Acts, the notaries Acts or common law prevented solicitors, notaries or barristers from entering into unincorporated associations with other people or restricted the circumstances in which they might do so. Current protections are not enough. It is right and proper to develop alternative business structures, but it must be done within a proper regulatory framework to ensure that we have competition and greater innovation to the benefit not only of the consumer but of the legal services sector. We want to do that in a structured way that enables us to protect the consumer and the legal profession. We know that a healthy supplier base is absolutely essential to the provision of legal services and to achieving the objective of improving access to justice. We also know that many legal professionals do not fear competition: quite the opposite. There are tools in Part 5 that will enable them to respond to changes in legal services and the business environment and to competition from new entrants into the market. They can use them to provide even better services to clients, which is at the heart of what the noble Lord, Lord Carlile, said he wished to achieve. I know that he wants to ensure that the quality of service provided to clients is of the highest order and the right calibre, hence the rather gloomy picture that he paints. I understand why he does not want the legal profession to lose face-to-face contact and the ability to talk to the client to give the best advice and to have that replaced by some remote structure, which he described by alluding to the call centre experience that he has had. We want to achieve nothing other than better legal service. We do not want to do anything that will prevent rural communities from getting the best possible services. I do not think that the noble Lord intends this, but removing Part 5 could stifle innovation and prevent change. We believe that there is quite a lot of welcome, cautious though it may well be in part, for what might be achieved through alternative business structures to ensure a higher quality of services, a strong and vibrant legal profession, and good advice and support to consumers. I therefore hope that the noble Lord will allow Part 5 to remain on the basis that noble Lords have quite reasonably wished to ensure that we have the right safeguards in place. I very much look forward to debating those later in our consideration of the Bill.
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- Lord Carlile of BerriewCrossbench
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- My Lords, the Minister has replied helpfully in her customarily persuasive and courteous way, but I am afraid that we feel totally unpersuaded by what she has said. There is already a competitive market. We fear that the competition in that market will be removed. There is nothing that good lawyers like less than seeing legal work done badly. We believe that, despite the safeguards that are set out in the Bill and in the schedules, and indeed in the amendments that have been so helpfully tabled by some of those who have spoken eloquently in this short debate, we will be left with a situation in which the quality of legal services will diminish. The Minister spoke of the existing possibilities of lawyers entering into unincorporated associations with one another. That is certainly possible now, but it is a very different professional picture from one in which there are very large incorporated organisations with a very large profit element to them. I say to the noble Lord, Lord Whitty, who spoke constructively to this amendment, that flexibility already exists, but the evidence is that what has been produced is not that good. In the very large-scale market in personal injury cases, for example, we have seen more litigation with less merit. We have seen significant corporate fraud in the way in which cases have been obtained by corporate vehicles that have placed themselves in that market. Those of us who have been in the profession for a long time have also seen the unseemly picture of commercial organisations persuading people who have been injured in accidents to go to them, but then selling the cases, at a fee per case, to solicitors who then conduct them. I do not understand how that improves the competitive environment for consumers. We on these Benches therefore feel intense disappointment that Part 5 remains so unmitigated in the Bill. Accordingly, we wish to test the opinion of the House.
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- Lord Evans of Temple GuitingLabour
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- My Lords, I beg to move that further consideration on Report be now adjourned. In moving the Motion, I suggest that the Report stage begin again not before 8.20 pm. Moved accordingly, and, on Question, Motion agreed to.
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