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
- moved Amendment No. 384:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 385 and 386:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 389 and 390:
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- Baroness Ashton of UphollandLabour
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- moved Amendment No. 391:
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- Baroness Ashton of UphollandLabour
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- moved Amendment No. 394:
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- Baroness Ashton of UphollandLabour
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- moved Amendment No. 395:
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Lord Maclennan of RogartLiberal Democrat- Quote
- moved Amendment No. 396:
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- Baroness Ashton of UphollandLabour
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- My Lords, by virtue of Clause 137(4), an ombudsman’s determination becomes final and binding if accepted by a complainant. This is one of the cornerstones of the new scheme that we are putting in place. It provides complainants and respondents with the certainty that they are entitled to—a clear end to the complaints process. If the amendments to allow for an independent review were accepted, an ombudsman’s determination would no longer be final, and neither complainants nor respondents would have the necessary certainty. This is not only our view, but the view of the British and Irish Ombudsman Association. As we, and it, have said, complainants do not have to accept the determination of the ombudsman. They are always free to reject that decision and to institute court proceedings. It would therefore be wrong to have an independent reviewer able to second-guess the ombudsman. As explained in Committee, we envisage that there will be several internal reviews of a complaint before it is passed to an ombudsman for a final determination. In Committee, the noble Lord, Lord Thomas of Gresford, said that the amendments arose because the Government had, “failed to replace the position of the Legal Services Complaints Commissioner and of the Legal Services Ombudsman”.—[Official Report, 21/2/07; col. 1164.] However, although of course the Legal Services Complaints Commissioner and the Legal Services Ombudsman fulfil a valuable role under the present system, there is no need to create these roles under the new system that we are putting in place. At present, consumers need there to be some independent oversight of the way in which the professional bodies handle complaints. This is because those consuming the services do not necessarily have confidence in a profession that is seen to be judging itself. That is not, however, the system that we are creating. The amendments assume that the ombudsman scheme will work in the same way as the current complaints handling system, and so would require an appeals mechanism to an independent person. I hope it is clear, however, that the Office for Legal Complaints and the ombudsman are independent. The chairman of the OLC is a lay person, as is the chief ombudsman. Other ombudsmen cannot be practising lawyers, and every ombudsman is explicitly required to be appointed under terms that will guarantee independence. Ombudsmen’s decisions should be final. If there were appeals, the certainty that we are seeking to create would be lost. That would not be good for consumers or the professions. We are creating a system that we hope is quick and fair and that, crucially, has a certain conclusion to the process. It is a new system, and so does not work like the current one. There is therefore no need to recreate the roles that we had before. I ask that the amendment is withdrawn.
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- Lord Maclennan of RogartLiberal Democrat
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- My Lords, I have heard the words of the Minister, and I thank her for considering further a matter that was considered at some length in Committee. I remain concerned that she has not fully answered my point about the possibility of there being a conflict between the redress awarded by the ombudsman and the regulator finding no breach of the rules. However, in the light of what she has said, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. [Amendments Nos. 397 to 399 not moved.]
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Lord Hunt of WirralConservative- Quote
- My Lords, I strongly agree with my noble friend. It might be helpful if the Minister gave us a more detailed explanation of what has been going on behind the scenes. She gave us such a clear commitment in Committee, particularly with regard to Amendment No. 38, but that commitment seemed to disappear somewhere. Either she has been got at in some way that has not yet penetrated the consciousness of the Chamber, or she has changed her mind. In either case, we need an explanation. Amendment No. 400 seems to accord so much with the argument that the Minister previously accepted that it is surely right that there should be a general duty to consult practitioners and consumers on the extent to which the Legal Services Board ensures that its general policies and practices are consistent with its duties in Section 3. Amendment No. 401 lays down a reasonable structure within which the board’s general duty to consult would be exercised, and it is very difficult to understand why this is no longer as acceptable as it was. Perhaps the Minister has a convincing explanation, but we have not heard it yet. We await her response with eagerness and anticipation.
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- Baroness Ashton of UphollandLabour
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- My Lords, I am delighted that the noble Lord awaits my response with eagerness and anticipation, but I am not entirely convinced that I will convince him of my argument. Let me describe the general context of Amendment No. 38, which we have discussed. It is absolutely right to say that I took the amendment away and considered the principle behind it, although I did not accept the amendment on the day on which we discussed it because it would have ensured that the Bill afforded consumers and the professions equal treatment. I think that noble Lords broadly accepted that putting in a consumer panel recognised that there was no coherent body representing consumers that would have the necessary force in the legislation but that there were organisations in the professions that had that coherent voice. I took it away to consult officials and we went through the Bill. Having done so, I contend that the Bill affords, in equal weight, opportunities for the professions to have their voices heard, either because they are, as noble Lords know, well organised, well funded and very well established bodies, conversant in the art of putting forward their views; or, indeed, because the legislation itself requires that they are consulted at various points. It is not that I do not accept the principle behind what I said, but we believe that the Bill already does it. Noble Lords may disagree with that; that is for noble Lords to determine. There is nothing behind the scenes, as such. On examination, it was our view that we had achieved what was wanted. That is why I have not brought forward another amendment.
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- Lord Hunt of WirralConservative
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- My Lords, it might be of great assistance to the House if the Minister could indicate where in the Bill she found this general duty to consult. I have not yet found any such provision. This is now such a huge Bill, with so many government amendments, that there may well be hidden away something that would satisfy us, but I have not yet found it.
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- Baroness Ashton of UphollandLabour
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- My Lords, I think the noble Lord knows that there are specific requirements in different parts of the Bill which mean that consultation is necessary on particular issues. I cannot win on this. The Government bring forward amendments in order to respond; indeed, a number of amendments are specifically designed to support issues raised by the Law Society. A lot of them are very small, technical changes, but none the less important. That is why there appear to be many more amendments than usual. Noble Lords will, I have no doubt, return to this issue at Third Reading, but that is my explanation. I shall deal with one particular point raised in the amendments. I have indicated that there are sufficient opportunities. Clause 3 specifically requires the board to have regard to key principles, including any other principle that appears to represent the best regulatory practice. In line with best regulatory practice—for example, the Better Regulation Executive’s code of practice on consultation—the board should consider representations made, especially if they come from those affected by its function. The code of practice does not require us to set out consultation provisions in legislation, but it sets out a number of principles of best practice. They include: identifying the relevant interested parties and those likely to be affected by the policy; providing feedback on responses and how they have influenced the policy; and paying particular attention to representative bodies, such as business associations and trade unions. Given the requirement that the board follows best practice in respect of consultation, we should not have to set out in legislation practice which could become outdated and irrelevant as we move forward and become more detailed about the kind of consultation we wish to see. I do not want to narrow the focus of the board’s consultation, which I fear the amendment might if we were to limit the board’s consultation to the extent that its general policies and practice are consistent with its duty under Section 3, or the degree to which the board’s proposed activities are appropriately targeted, and whether or not the proposed programme of work is proportionate. Instead, I submit that the combination of Clause 3 and the provisions that must be followed in respect of representation is the best approach. This would include the requirement for the board to have regard to any representations made to it in respect of policy statements, covered by Clause 49, rules made under the Bill, covered by Clause 195, and ensure that consumers and the profession have the opportunity to influence decisions by the board. The principles that I have outlined would also apply to any work plan, but it is not necessary to put a duty in the Bill. The board is also under a duty, in Clause 3, to ensure that its activities are targeted and used only where appropriate and necessary. This, along with the duty for the board’s accounts to be laid before Parliament, provides sufficient financial accountability. I hope this explanation suffices and that the noble Lord is able to withdraw his amendment.
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- Baroness Ashton of UphollandLabour
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- My Lords, yes.
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 402 to 404:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 405 and 406:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 407 and 408:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 409 to 412:
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- Lord Maclennan of RogartLiberal Democrat
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- My Lords, I strongly support the amendments tabled in the name of the noble Lord, Lord Kingsland, and adopt the reasoning that he has advanced. I supported the line of reasoning expressed in Committee and have few additional points to make. However, the public interest in the Legal Services Board’s operating economically and effectively will be best discharged by the Government’s direct interest being continued through the financial mechanism. If the body is established and passes its costs on to the consumers of legal services, the Government’s continuing interest in maintaining the body in the form in which it has been described from the beginning will be put at grave risk. The Government have clearly departed from the advice of the Clementi report, particularly on start-up costs. It is not surprising that the estimates for these costs have risen since Sir David Clementi reported. The duties which the Bill imposes on the Legal Services Board are far reaching and are by no means consonant with the concept that the board would intervene only when something had gone wrong. It is creating a huge framework of supervision by the indicative policies that the Bill requires it to embark on. These changes may or may not be necessary; although I am persuadable that the Government are right in thinking that they are required, there are downside cost consequences. The second major point of principle, to which I think the amendments are addressed, is that the public have an interest in the delivery of justice in our society, which goes far beyond the ability of individuals to have access to justice. They have an interest in justice being done, being seen to be done and being available to all. The more expensive that this process of regulation becomes, the more inaccessible justice will be. If the professions have to bear the full costs, there will be no way of recouping them other than by increasing the cost of their services. I simply cannot understand why there is this belief that the proposal is in the consumer’s interest. The danger is that ever more people will find that legal assistance and access to the courts and advice are beyond their means. The Bill could contribute to that if it does not share out the costs between the taxpayer and the professions.
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Lord BorrieLabour- Quote
- My Lords, during the 20th century the legal profession, particularly the solicitors, came more and more into direct contact with the masses of the population as distinct from merely the better off, the commercial enterprises and so on. That was encouraged by the Legal Aid and Advice Act which the Labour Government brought in soon after World War 2. The legal profession, and I mean both parts of it, has always professed that it must have in mind the interests of the public—citizens in general—and not just their clients. Its behaviour, codes of practice and professional conduct require that that should be so. As we know, however, the legal profession has not always in practice come up to the high standards professed in the codes of professional conduct and the codes that, at annual meetings and so on, it maintains that it has. I know that opposition parties do not agree fully with every aspect of the Bill but, bearing in mind the professions’ deficiencies in dealing with complaints, it is difficult for them to suggest that the Bill’s surveillance elements regarding the Legal Services Board are not required. The noble Lord, Lord Kingsland, distinguishes between the front-line regulators—which, as he would say, are properly paid for by the professions—and the Legal Services Board, which, on behalf of the public, ensures that it does a good job, or at least that is what it is meant to do. That is not a strong distinction. They are all needed. The surveillance of the Legal Services Board is needed because of the professions’ recent history. It is in the public interest to ensure that the professional standards which the professions have maintained and stated they believe in over so many years are in fact and in practice maintained. It is rather difficult to argue that the people who use the services of lawyers should not pay for the work of the Legal Services Board as well as for the front-line regulators. I certainly do not see as a matter of principle the distinction drawn by noble Lords opposite on this matter. I recall certain connections with the regulation of the accountancy profession. I do not see any objection in principle to the fact that it does it by means of the Financial Reporting Council, as mentioned by the noble Lord, Lord Kingsland. There is a split, and some sort of split is desirable. I know that Sir David Clementi thought that that might be suitable in the legal profession. I stress that the Government’s proposals are not out of the question or unprincipled in suggesting that those who need and have to pay for the services of lawyers should also pay, rather than the general taxpayer, for the provision of the surveillance of the Legal Services Board as well as for the front-line regulators.
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- Lord Hunt of WirralConservative
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- My Lords, the noble Lord, Lord Borrie, has missed one of the key points in this debate: the whole issue of access to justice. That was why Sir David Clementi said that the Legal Services Board should have a wider remit in the public interest than just the oversight of the practitioners in the legal services sector. He also said—I felt persuasively—that to have a contribution from other than just the regulated would enable the regulator to demonstrate its independence from those it was regulating. If all its money came from the professions over which it had oversight, then issues such as access to justice and independence would not be seen as having the wider remit that the public would want. In demonstrating my support for the words of my noble friend Lord Kingsland, and also finding myself in complete agreement with the noble Lord, Lord Maclennan of Rogart, I should also add that I am becoming increasingly concerned about the cost. When we last debated the Bill, on the second day of Report, we had just seen an extract from a report by Frances Gibb in the Times that the costs were escalating to a degree that none of us had really contemplated. In the Joint Select Committee, the estimate of costs was said to be, if I recall correctly, “at best speculative”. But I do not think that any of us on the Joint Select Committee contemplated that they would double before the final figures were known. It might be helpful if the Minister could bring us up to date in particular on the start-up costs but also on the running costs. It is a little while since we saw that report. The Minister at least indicated that she shared our concerns about the costs suddenly running away from us in a way that would impinge on access to justice if the professions had to bear all those costs. Who is going to pay? The answer is that the consumer of legal services ultimately will pay through increased charges. I am very worried indeed about whether we have yet seen the final picture. When we last debated these issues, the noble Baroness said that she was taking a close look not only at the start-up costs but at the running costs as well. Now that we have this debate and a number like it this evening, it might be helpful if she could bring us up to date with where we are on the issue of costs so far as the Government are concerned. Finally, experience tells me that written in bold capital letters on the Minister’s brief from the Treasury will be the word, “Resist”. I have come to have considerable respect for the Minister and I know that she would ignore any such mandate if she felt that there was a case to be argued. I do not know whether she will let us in on what arguments may be going on with the Treasury behind the scenes, but my noble friend Lord Kingsland has made a very strong point in moving this amendment. I hope, therefore, that the Minister will not reject it out of hand.
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- Baroness Ashton of UphollandLabour
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- My Lords, I have not had any conversations with the Treasury. I do have the word “Resist” written on my brief, but it is not from the Treasury. Indeed, we have been in consultation with the Treasury to do precisely what the noble Lord has invited me to do, which is to give an update on the costs. Noble Lords will recall that when we considered this issue on 16 April, I said that I was concerned to look at the figures reported by Frances Gibb in the Times, as well as to consider the further analysis undertaken with the Law Society and the Bar Council. Rather helpfully, those with whom we shared the figures raised different points that they wished us to reconsider, which I duly asked officials to do. I also asked my officials to give me figures that I could use this evening in order to set out for noble Lords the position as it currently stands. We have been looking to refine the implementation plans and to consider the amendments that have been made to the Bill, so it is absolutely right to reflect the current position by updating the costs. Noble Lords will recall that the original forecast by PricewaterhouseCoopers was £26.8 million. Following our further analysis, the figure now stands at £32 million, which takes into account inflation—that is, the costs are restated at 2007-08 prices—and includes VAT. It also reflects other adjustments which have led to decreases in costs in some areas and increases in others. In addition, in relation to the Office for Legal Complaints, we have assumed a year-on-year increase in the volume of complaints. That is based on an analysis of the compound annual growth rate of Law Society complaints, which account for approximately 96 per cent of the total annual volume of complaints. Building in this annual growth rate has impacted on both implementation and running costs, with the result that it is predicted that in 2007-08 the running costs are now predicted to be £19.9 million compared with the PricewaterhouseCoopers estimate of £16.8 million. The noble Lord, Lord Hunt of Wirral, specifically asked me for that figure. However, the revised figure still represents a saving on the current complaints-handling arrangements, costed by PricewaterhouseCoopers at £32.5 million in 2005. While the analysis we have carried out is robust and based on sound assumptions, any operation of this size involves risks, no matter how carefully planned and managed it may be, so we have put together a risk register. It is therefore prudent to build in a margin for unforeseen costs, and I have suggested that we build in a margin of 15 per cent, which is approximately £5 million. That is based on an analysis of the risks associated with the reform process and the costs that may accompany those risks. It is right and proper to cite a figure that takes into account all the risks of change. Although I do not anticipate the risks, they could include problems such as not being able to find appropriate premises. These are risks that we do not believe will be realised, but none the less have to be taken into account. We have also looked at the possibility of a spike in complaints volumes occurring two to three years after the introduction of the new scheme. We have analysed what has happened in comparable sectors and the evidence suggests a tendency towards a spike two to three years in. However, I emphasise that our forecasts already take into account a year-on-year increase, and of course the experience of different sectors does not necessarily read across. In addition, in practice we would expect to see economies of scale and a decrease in cost per complaint. It is obviously crucial that noble Lords and the legal professions have confidence in these figures, so I should like to emphasise that the adjustments which have been made are based on a robust analysis. What is more, I can confirm that the revised figure will now form the basis of the implementation budget for the new organisations when responsibility is handed to the new boards; that is, it will be the budget that they are given.
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- Lord Hunt of WirralConservative
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- My Lords, these are important figures, and they are higher than those given in the regulatory impact assessment. Is the Minister planning to issue an updated regulatory impact assessment? If she were able to give us that assurance, it would go some way to meeting our concerns.
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- Baroness Ashton of UphollandLabour
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- Yes, my Lords, I can give the noble Lord that assurance. Noble Lords will also want to know the detail of the adjustments that have been made. It may be helpful if I set out the position in writing as well as producing a revised RIA. I indicated previously that I would write, but noble Lords will know from our discussions on 16 April that I did not want to do so until I was convinced that the figures were robust. Indeed, I am grateful to our officials who have worked tirelessly during the past two weeks in order to drill down and make sure that the figures are right. Before Third Reading I shall write to noble Lords setting out the position in full, and that will include responses to questions raised by the professions about the position of VAT and double counting. We have been in contact with Her Majesty’s Revenue & Customs and received the best advice on the VAT position. I shall set all this out in detail, which I hope will be useful. I am grateful to noble Lords for their patience in allowing me to get to this point, one where the figures are now more robust. Noble Lords will see that the estimate is a decrease from the figure I was talking about for the professions, and I hope that that is welcome. However, I appreciate that they will want to see the detail before agreeing that the figures are indeed robust. Finally, noble Lords should feel free to put any questions to me before we return to these issues at Third Reading. I turn now to the principle underlying the debates. The noble Lord, Lord Maclennan, put very well the concerns that have been raised on the issue of funding, but we remain convinced that it is entirely appropriate for the legal service providers to bear the costs of these reforms. Here I want to reiterate the basis of that conviction. I am glad to say that we have a thriving legal market with a turnover in 2005 of £22 billion. The legal professions have a privileged position as the providers of reserved legal services. I believe that confidence in the system will increase as a result of the demonstrably independent regulation and complaints handling procedures, and I believe that the legal professions will benefit from that. I also think that the opportunity created in the Bill for alternative business structures will be to their benefit. They will be significant beneficiaries, and on that basis the Government think it entirely right for the significant beneficiaries to pay for the reforms. I acknowledge that the Government will make some savings as a result of these reforms, but the job of government is to consider where to invest and what are the priorities. We believe that investment is most needed in other priority areas, particularly those where other sources of funding are not available. While I agree with the noble Lords, Lord Maclennan and Lord Kingsland, that the Legal Services Board plays a public interest role, I do not accept that that provides an argument in favour of a government contribution to costs. At present the legal professional bodies raise fees from their members not solely to pay for the cost of regulation. They also fund important public interest activities performed by those bodies. I cite, for example, participation in human rights and law reform work. The same approach should apply to all the functions which will support the new framework provided for in the Bill. In Committee, the noble Lord, Lord Kingsland, and others discussed a number of comparisons, including the role of the Financial Reporting Council. I undertook to look at the funding arrangements for that organisation in more detail. The Financial Reporting Council’s accounting, auditing and corporate governance activities are funded by a tripartite arrangement, funding received in equal proportions from the accountancy professions, the business community and the Government. Other costs, audit inspection, investigation and disciplining of accounts are funded entirely by the accountancy professions. However, the Government provide no funding in relation to actuaries. The FRC’s funding arrangements in relation to its responsibilities for actuarial standards and regulation are as follows: 10 per cent from the profession, 45 per cent from the insurance companies and 45 per cent from the pension funds. As noble Lords would expect, I have also looked at the funding arrangements of a number of other regulatory bodies: the Financial Services Authority, the financial services ombudsman, the Council for Healthcare Regulatory Excellence, the pensions regulator, the office of communication and the claims management regulator. That analysis highlights that there is no rigid approach in terms of government funding. There are cases where the Government fund establishment or running costs and cases where they do not. The decision in effect is taken on a case-by-case basis, but the Government’s starting principle is that there should be no increase in public expenditure unless there is a compelling case for public funding. In this instance we do not believe that there is any such compelling argument. It is not inconsistent in terms of government policy to require the professions to pay. I know that the legal professions have argued that if the Government were making a contribution they would be incentivised to reduce costs. We are committed to ensuring value for money in these reforms and that is why we have built in the safeguards to ensure that. The levy rules are subject to the extensive consultation requirements, to the consent of the Lord Chancellor and to parliamentary scrutiny through the negative resolution procedure. Together these measures will ensure that the spending of the new bodies is properly contained. For the reasons that I have set out, I hope that the noble Lord, Lord Kingsland, will withdraw his amendment.
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Lord Clinton-DavisLabour- Quote
- My Lords, before my noble friend sits down, the Bar Council and the Law Society have made certain observations about start-up and running costs. They say that new entrants to the profession will be adversely affected. Is she able to deal with that argument now?
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- Baroness Ashton of UphollandLabour
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- My Lords, I have never heard the argument that new entrants will be affected in that way. Perhaps my noble friend and I might discuss that issue separately. Certainly I have set out the issues to do with the costs and I will do so in greater detail.
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- Baroness Ashton of UphollandLabour
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- moved Amendment No. 415:
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- Lord Hunt of WirralConservative
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- My Lords, I agree with my noble friend’s comments, particularly on Amendment No. 417. Proportionality is an important principle—it is an express principle in other parts of the Bill—and there are good reasons for applying it here. I hope the Minister will be able to give a positive response.
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Lord Campbell of AllowayConservative- Quote
- My Lords, I support this. Proportionality, yes, but in what context and in what sense? This truly gives guidance with legal efficacy, but there is no harm in that in this particular situation. Without that guidance, what is proportionality going to mean? I will not go on about this—it is getting late—but there is a good and important point in the amendment, which I support.
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- Baroness Ashton of UphollandLabour
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- My Lords, I appreciate that the noble Lord, Lord Kingsland, has brought this issue back again. I have already indicated that we have talked to the smaller regulators, because I understand their concerns. I said as well that I would look at what else we might be able to do on this issue to give them clarity and comfort about the situation. I said during the debate in Committee that the board must be satisfied that the apportionment of the levy would be in accordance with fair principles before making the rules, and I still firmly believe that that, rather than a list in the Bill of what would inevitably be a prescriptive list of factors, is the appropriate provision. Noble Lords will know that I have a general aversion to lists as they can never be exhaustive, and often they could preclude a factor that we do not think of at the time but could subsequently become important—perhaps more important than other factors. I do not wish to do that because it is important to enable the philosophy of proportionality to be interpreted with the factors at the time, depending on the circumstances. I recognise that the list sets out what the board should consider inter alia, so other matters should be considered too, but any list puts pressure on the board to consider those matters before anything else for fear of being reviewed, and that would restrict the flexibility of the board, something the Institute of Trade Mark Attorneys and the Chartered Institute of Patent Attorneys have said they do not want. They do not want a one-size-fits-all approach. I agree, and we would argue that flexibility is exactly what is needed to prevent that. Reducing that flexibility through a predetermined list could ultimately be to their detriment, and none of us wishes to see that happen. I do not want to set out the principles. In our thinking we have followed the approach in Section 2(3) of the Legislative and Regulatory Reform Act, which establishes that regulatory activities should be carried out in a way that is transparent, accountable, proportionate and consistent, and that regulatory activities should be targeted only at cases in which action is needed. We believe that the terminology set out in the Bill in respect of proportionality and fair principles has a natural meaning that is widely accepted and widely understood, but it gives the flexibility to provide for the smaller regulatory bodies, which I know are concerned about this. I hope, as we continue to discuss this with them—we will certainly do so—that they will feel increasingly reassured that there is no question that one-size-fits-all would be highly inappropriate in the context of ensuring the smaller regulatory bodies are well catered for. We are all in agreement on what we are seeking to do; our contention is that we have achieved it within the Bill. On Amendment No. 433, we would generally expect money owed in respect of the levy to be paid from practising fee income, and Clause 50(4)(b) provides that it can be. I do not want to set out in the Bill that that is the only source of funds that could be used to meet a debt to the board, simply because we do not want to restrict the flexibility of the regulators to meet debt in the way best suited to their own financial arrangements. To do so could force an approved regulator to divert practising fee income away from essential regulatory functions in order to pay the board, when it might judge that it was less damaging to use some other asset or source of income. It is unusual for legislation to restrict the way in which money owed may be recovered and to fetter the court’s ability to enforce payment of debts. We consider that the standard procedures that apply to the recovery of debt should apply in this case. It is a question of allowing flexibility for the regulatory bodies for circumstances we cannot foresee, where it might be in their best interests to provide for that money in other ways than simply using the practising fee. I hope that on that basis the noble Lord will feel he has some shreds of comfort, and will withdraw the amendment.
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- Lord Campbell of AllowayConservative
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- My Lords, before the Minister sits down, I understand her reply but, as there is some useful material in the amendment, could some form of undertaking be given that it could be used as guidance? It would be for a constructive purpose.
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- Baroness Ashton of UphollandLabour
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- My Lords, I am not willing to commit to saying that we will make this into formal guidance. I am sure, however, that, in the discussions I have mentioned with the smaller regulatory bodies, their concerns, which are reflected in some of the issues raised by the noble Lord, Lord Kingsland, need to be properly dealt with. I am prepared to commit that we will continue the dialogue with them. It is our shared objective to ensure that they are treated properly and fairly. In legislative terms we have achieved that; in practical terms, it will be for the bodies concerned to make sure it happens.
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 418 and 419:
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- Baroness Ashton of UphollandLabour
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- moved Amendment No. 427:
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 429 to 431:
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- Baroness Ashton of UphollandLabour
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- moved Amendment No. 432:
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- Baroness Ashton of UphollandLabour
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- moved Amendment No. 434:
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- Lord Maclennan of RogartLiberal Democrat
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- My Lords, I add my support to what the noble Lord, Lord Kingsland, said. The amendment has particular relevance; indeed, even cogency, in the context of the proposed alternative business structures where direct conflicts might arise between duty to the regulator and duty to shareholders, which is one of the reasons we are so concerned about this development.
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- Baroness Ashton of UphollandLabour
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- My Lords, I am grateful to the noble Lord. Since we discussed this previously, I have consulted the Department of Trade and Industry. My officials have had discussions about the implications of the measure. It is true that ABS companies and the directors will already have a number of statutory duties under company law. Noble Lords could argue that these could potentially conflict but it is our contention that it is for the director concerned to ensure that any action which they take does not breach any of the statutory duties. While the same position applies in respect of directors of ABS firms, the Bill provides further safeguards. Lawyers and ABS firms have a statutory duty at Clause 169 to comply with their professional conduct obligations. In addition, at Clause 88 the Bill prevents any non-lawyers who are shareholders, managers or employees of an alternative business structure firm from acting in a way that causes lawyers to breach their professional conduct rules. My contention is very simple—that a new override provision is not necessary. Having consulted, we know that there is a genuine concern that this would create uncertainty, in particular for company law and for other legislation. Noble Lords will not be surprised to hear that we believe that the Bill sets out that statutory duties must be respected and that an override clause could potentially have a detrimental effect on company law. Therefore, we believe that we do not need to accept this amendment and we hope that the noble Lord will withdraw it.
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- Baroness Ashton of UphollandLabour
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- My Lords, as I understand it from our discussions with the Department of Trade and Industry, the provision that the noble Lord proposes could create difficulties for other applicable duties that may overlap with those of directors but for which there is no such statutory provision in the Bill. The contention is that it would create an uncertainty in the process, which I am sure is not what the noble Lord wishes, rather than what I think he seeks, which is to create greater certainty.
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- Baroness Ashton of UphollandLabour
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- My Lords, I am more than happy to set out in writing the concerns of the Department of Trade and Industry. It is always difficult to interpret other departments’ words appropriately, particularly when cross-examined so ably by the noble Lord, Lord Kingsland. If I set that out in writing, there will be plenty of time before Third Reading for the noble Lord to look at it.
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Lord Evans of Temple GuitingLabour- Quote
- moved Amendment No. 436:
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- Lord Evans of Temple GuitingLabour
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- My Lords, to save a little time during the dinner break, I can give the noble Lord, Lord Kingsland, the assurance that he requires.
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- Baroness Ashton of UphollandLabour
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- moved Amendments Nos. 436A to 446:
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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 Report stage begin again not before 8.25 pm. Moved accordingly, and, on Question, Motion agreed to.
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