House of Commons Hansard Debates for 16 Oct 1990

Lord James Douglas-Hamilton : I beg to move, That the clause be read a Second time.

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Mr. Deputy Speaker : With this it will be convenient to take Government amendments Nos. 97, 100, 101 and 113 to 115.

Lord James Douglas-Hamilton : New clause 22 will be welcomed by the whole House. The Bill already provides for the removal of existing statutory barriers to the formation of multinational practices. The new clause makes it clear that Scottish solicitors are entitled to enter into such practices. More significantly, it gives the council of the Law Society of Scotland powers to regulate such practices. The House will wish to know that the amendment has been discussed with the Law Society, which indicated its support for the new clause and the policy in general. The new clause places the Council of the Law Society under a duty to maintain a register of foreign lawyers with whom Scottish lawyers are to be permitted to go into partnership. They will be lawyers whose native jurisdiction is regulated to the society's satisfaction.

The new clause is an enabling power rather than a detailed attempt to regulate multinational practices. It creates a flexible framework within which details can be worked out in the light of developments in national legal practice, and thus the Secretary of State is accorded a regulation- making power under subsection (5) to attach existing statutes and statutory instruments to foreign lawyers practising in Scotland or in partnership with Scottish solicitors where he considers that appropriate. That power is to be exercised only after consultation with the Law Society's council and is subject to affirmative resolution in both Houses of Parliament.

I believe that the new clause paves the way for the enhancement of business opportunities for the Scottish legal profession and better services for clients.

The remaining amendments in the group are primarily intended to clarify the position of multi-disciplinary practices in the regulatory framework that governs solicitors. The House will be aware that the Bill already provides for the removal of the existing statutory barriers to the formation of multi-disciplinary practices--those involving solicitors and members of other professional disciplines--and for shifting responsibility for the extent to which multi-disciplinary practices should be permitted to the council of the Law Society of Scotland. That is quite proper, as the solicitor profession in Scotland is very much a self-regulating one, and it should be for the council to decide on practising structures for its members.

Mr. Dewar : There is no objection from any quarter with which I have been in touch to the proposals on multinational practices in the new clause, but it would be helpful if the Minister said a little more about them.

I understand that multinational practices contain foreign lawyers who will register with the Law Society of Scotland and who are not necessarily restricted to being lawyers who qualified in another EC country--they can come from any part of the world. Amendment No. 114 defines a foreign lawyer as

"a person who is not a solicitor or an advocate but who is a member, and entitled to practise as such, of a legal profession regulated within a jurisdiction outwith Scotland".

Sir Nicholas Fairbairn : Does foreign in this case include England?

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6.30 pm

Mr. Dewar : I assumed that it does, for these purposes. No doubt the Scottish National party would take an interest in the matter if its members were present, but unfortunately their enthusiasm for law reform in Scotland ran out some hours ago and they are not here to participate in discussing this relevant point.

For these purposes it is fair to say that a foreign lawyer will be an English lawyer, so an English lawyer can become a partner in a Scottish law firm as long as he is registered with the Law Society of Scotland and it is satisfied with his qualifications and his ability to practise. I am not sure what test the society will apply--perhaps the Minister will tell us.

The English jurisdiction is fairly close to the Scottish one, but it seems that even a Spanish, Australian or Papua New Guinean--I cast no aspersions- -could perfectly well become a partner. Presumably the Law Society of Scotland will apply a test of competence in the law of Scotland before such a lawyer is allowed to join a practice. No doubt those matters have been discussed with the Law Society ; perhaps the Minister can tell us more.

One of the problems with the Bill, of which even Members who are not connected with the measure will have heard, is the extreme danger of reading it in terms of the words that appear within its covers. Sometimes the Government mean the opposite of what the legislation appears to do. That was exemplified in the case of the

multidisciplinary practices, which we are defining in the Bill. I am delighted, incidentally, to see the hon. Member for Tayside, North (Mr. Walker) in his place. Not only does he hold the distinguished office of vice-chairman of the Conservative party in Scotland, but I note that he is acting as parliamentary private secretary to the Under-Secretary of State, a responsibility that he bears with distinction. Perhaps it is now one that substitutes for his vice-chairmanship, which dangles by the proverbial thread. As the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn) will recall, when we discussed multi- disciplinary practices, we were removing the barriers to them. That was the clear message on the face of the Bill, but it emerged that that was not what we were doing at all. We were not inviting the arrival of those practices. The Government had entered into a private agreement with the Faculty of Advocates first, and thereafter rather more publicly with the Law Society of Scotland, to the effect that they would approve any regulations that would ban multi- disciplinary practices. So there were to be none at all in Scotland in the foreseeable future.

There was a moment of high comedy when we were asked not to defeat a certain part of the Bill on the ground that it prevented the Office of Fair Trading from interfering with our affairs, and because that office was being banned from the field, level or otherwise, it would be even harder for multi-disciplinary practices to enter by the side door or the back door.

So, despite the defining of multi-disciplinary practices, the Government, the Committee and everyone else have agreed not to have them. I want to find out whether the same will apply to multinational practices. Although we appear to be removing barriers and giving them the green light, perhaps there is already an agreement not to have them. Can the Minister clear up that point and say a word or two about the MDPs that we are so neatly defining in

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amendment No. 114, sub-paragraph (ab)? That may be something of an academic exercise, in view of the arrangements that have been reached, but although the matter was spelt out in Committee, it might be helpful if it were spelt out again on the Floor of the House.

Mr. Harry Ewing : I welcome the proposal to have multinational practices. I suspect that one of the great difficulties of pursuing cases on behalf of clients against the background of tragedies such as Piper Alpha and Lockerbie is our lack of experience in working on a multinational basis. But it is also important to warn the people of Scotland of what lies ahead. I look forward to the day when Ross, Harper and Murphy becomes Ross, Harper, Murphy, Ashrap, Gomez and Waleski.

Mr. Menzies Campbell : I should like to ask the Minister to be forthcoming about what precisely is conveyed by subsection (4), which reads :

"Any foreign lawyer may apply to the Council to be registered as such for the purposes of this section."

Some distinguished foreign lawyers may find the prospect attractive.

"The Council shall, if they are satisfied that the legal profession of which the applicant is a member is so regulated as to make it appropriate for him to be allowed to enter into a multi-national practice with solicitors or incorporated practices, enter his name on the register."

One can see circumstances in which the legal profession of which the applicant is a member is so regulated as to ensure that he is a person of good character or financial probity, or that he regularly fulfils responsibilities equivalent to those in Scotland under the solicitors accounts rules. Legal professions may prudently impose such tests on these lawyers, but there appears to be no provision here requiring the council to consider whether they are sufficiently expert in and knowledgeable about Scottish law to be able to enter a professional relationship with Scottish lawyers.

It may be argued that it should not matter whether a person qualified in Spanish law is sufficiently qualified in Scottish law, but partnerships of solicitors attract joint and several liability ; so it may equally be argued that before any multinational practice may be created a lawyer coming to it from a foreign jurisdiction should be shown to be well enough versed in the law of Scotland at least to understand the responsibilities of partnership in Scotland. As I read subsection (4), it is concerned with the way in which the native or the domestic legal system of which the foreign lawyer is a member may be regulated. It is not concerned with whether any such applicant is sufficiently versed in Scottish law to understand the consequences of entering into a partnership with Scottish solicitors. That seems to me to be an omission. Perhaps it is a deliberate omission ; if so, no doubt the Minister will tell us. If he accepts that it is an omission by reason of oversight, however, I hope that he will at least give some consideration to the point that I have made. At the very least, it seems to be desirable that anyone entering into a partnership with a Scottish lawyer should be aware of what the consequences may be, in terms of personal liability and what the responsibilities to the Law Society of Scotland and the provisions of the accounts rules undoubtedly are.

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Lord James Douglas-Hamilton : One of the questions that I was asked was whether the term "foreign lawyer" included English lawyers. Amendment No. 114 defines "foreign lawyer" as

"a person who is not a solicitor or an advocate but who is a member, and entitled to practise as such, of a legal profession regulated within a jurisdiction outwith Scotland."

The hon. and learned Member for Fife, North-East (Mr. Campbell) and the hon. Member for Glasgow, Garscadden (Mr. Dewar) asked who would decide which jurisdictions were acceptable for inclusion in the register of foreign lawyers--for example, whether the educational requirements were sufficient. That will be for the Law Society regulations to decide. The test will be the arrangements for training and fitness in the home jurisdiction of the applicant concerned. I was also asked whether multi- disciplinary practices would exist. The answer is yes, if the Law Society wants them. The amendments provide for them to be adequately regulated. The hon. Member for Garscadden looks amused, but it is important that we secure the acceptability of the amendments. The Law Society pressed hard for the amendments on multinational practices, and I suspect that there will be more pressure in that regard. The Secretary of State and I both devilled, before being advocates to a QC who is now a European judge--that is a sign of the greater contact between European nations.

Let me say to the hon. Member for Falkirk, East (Mr. Ewing) that I am surprised that, as the shadow Secretary of State is a partner of Ross, Harper and Murphy, he did not at least mention the name of the hon. Member for Garscadden before mentioning many extra names.

Mr. Dewar : I wish this point to be put clearly on the record. On multi-disciplinary practices, the Minister is saying that the Government will abide by what the Law Society of Scotland wants--that they will endorse the decision. If the Law Society wants multi-disciplinary practices, so be it, and if it does not, so be it.

Lord James Douglas-Hamilton : That is exactly what I am saying. I have had very satisfactory meetings with the Law Society, and I can confirm that it finds the amendments acceptable.

Mr. Menzies Campbell : Is the Minister saying that, if the Law Society of Scotland considers it appropriate that a foreign lawyer should have some knowledge of Scottish law and the consequences and liabilities of entering into partnership with Scottish solicitors, it may impose that as a qualification before admitting any individual to the register that it will maintain?

Lord James Douglas-Hamilton : Yes, it could regulate multinational practices. We are at an early stage, but obviously it will become an issue in 1992, when there will be more competition between European countries. It is only right that this provision should be included in the Bill so that they can take the necessary action as required. Question put and agreed to.

Clause read a Second time, and added to the Bill.

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Clause 14

The Scottish Conveyancing and Executry Services Board

Lord James Douglas-Hamilton : I beg to move amendment No. 21, in page 18, line 31, leave out

providing such services in the course of practising as solicitors'.

Mr. Deputy Speaker (Mr. Harold Walker) : With this we may take Government amendments Nos. 22, 34 and 99.

Lord James Douglas-Hamilton : The amendments are intended to deal with the concerns expressed by a number of hon. Members in Committee about the demarcation of regulatory responsibilities between the Scottish Conveyancing and Executry Services Board and the Law Society. The hon. Member for Glasgow, Garscadden (Mr. Dewar) and the hon. and learned Member for Fife, North-East (Mr. Campbell) both spoke eloquently on this topic. I hope that they will agree that the amendments make it absolutely clear that the jurisdiction of the board does not extend to solicitors, who will be regulated by the Law Society alone. It will not be possible for a solicitor to register as a qualified conveyancer or an executry practitioner without first having had his name removed from the roll of solicitors. I believe that the amendments clarify the position.

Mr. Dewar : I welcome that. There was considerable concern in Committee about the possible overlap when someone was both a solicitor and an independent qualified conveyancer. There was a feeling that there might be differences in the rules and regulations and problems about jurisdiction.

As I understand the import of this group of amendments, the conveyancing board will look after the qualified conveyancers and the Law Society will rule supreme with solicitors. The two cannot be combined. That seems a sensible improvement on the rather confused situation that could potentially have existed. I thank the Minister for his efforts.

Amendment agreed to.

Amendment made : No. 22, in page 18, line 37, leave out providing such services in the course of practising as solicitors'.-- [Lord James Douglas-Hamilton.]

Clause 15

Qualified conveyancers

Lord James Douglas-Hamilton : I beg to move amendment No. 23, in page 19, line 21, leave out (4)' and insert (13)'.

Mr. Deputy Speaker : With this we may also consider the following amendments : No. 136, in page 19, line 24, leave out may' and insert shall'.

Government amendments Nos. 24, 25, 35, 36 and 37.

6.45 pm

Lord James Douglas-Hamilton : I shall be happy to accept amendment No. 136 when it is moved. It ensures consistency between the rules governing registration of executry practitioners and qualified conveyancers, and I am grateful to the hon. Member for Glasgow, Garscadden (Mr. Dewar) for bringing it before the House.

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Amendments Nos. 23, 24, 25, 35 and 36 seek to establish a standard time limit for appeals against decisions made by the Scottish Conveyancing and Executry Services Board relating to disciplinary matters and to the refusal of applications for registration as a qualified conveyancer or as an executry practitioner. The House will have noted that clause 18(10) already provides for such a time limit in connection with the disciplinary measures imposed by the board. The amendments aim for a consistent approach throughout part II. I am sure that the House will agree that 21 days is a reasonable period within which an aggrieved practitioner can be expected to appeal against a decision made by the board. It corresponds exactly to similar provisions in the Solicitors (Scotland) Act 1980, which is perhaps the most relevant comparable legislation.

Amendment No. 37 fulfils an undertaking that I gave to my hon. and learned Friend the Member for Perth and Kinross (Sir N. Fairbairn) during the Committee's consideration of his amendment No. 253. Its purpose is to place the Secretary of State under a specific duty to include provisions relating to educational qualifications and practical training in the regulations governing the conduct and practice of executry practitioners, which he is required to make under clause 16. While it was always the Government's intention that such matters should be covered in the regulations, the amendment puts the matter beyond question. I wish to make it clear that we have responded to the concern expressed by the hon. Member for Garscadden in Committee.

Mr. Dewar : There is no time to go over what is obviously an improved position. I can only say that I am grateful to the Minister for accepting amendment No. 136, which I shall move when we come to it. It is important that we give proper attention to educational qualifications and to training qualifications in the area where both qualified conveyancers and executry practitioners operate. The amendments that we shall consider this evening go a long way to meet some of the doubts and anxieties that were expressed in Committee, and I am glad to see them on the amendment paper. Amendment made : No. 136, in page 19, line 24, leave out may' and insert shall'.-- [Mr. Dewar.]

Amendments made : No. 24, in page 19, line 31, after may' insert

, within 21 days of the date on which the Board's decision is intimated to him,'.

No. 25, in page 19, line 33, leave out

if he is not satisfied'

and insert

within 21 days of the date on which the outcome of such review is intimated to him'.

No. 97, in page 20, line 5, at end insert--

(d) a multi-disciplinary practice within the meaning of that section,'.-- [Lord James Douglas-Hamilton.]

Lord James Douglas-Hamilton : I beg to move amendment No. 26, in page 20, line 22, at end insert--

(10A) The Secretary of State shall, subject to section 36 of this Act and after consultation with such persons as he considers appropriate, by regulations make such provision as he thinks fit with a view to maintaining appropriate standards of conduct and practice of independent qualified conveyancers, and such regulations shall, in particular, make provision with respect to--

(a) the manner in which such conveyancers conduct the provision of conveyancing services ;

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(b) conflicts of interest ;

(d) the holding of clients' money ; and

(e) the disclosure of and accounting for commissions.

(10B) Regulations under subsection (10A) above shall be made by statutory instrument and no regulations shall be made under that subsection unless a draft of the regulations has been laid before, and approved by a resolution of, each House of Parliament.'

Mr. Deputy Speaker : With this we may take Government amendments Nos. 27 to 32, 43, 56 and 57.

Lord James Douglas-Hamilton : Broadly speaking, the amendments reflect the terms of an amendment that was tabled in Committee--again, by the hon. Member for Glasgow, Garscadden (Mr. Dewar)--with some further consequential amendments.

The purpose of the amendments is to place responsibility for making rules governing the conduct and practice of independent qualified conveyancers in the hands of the Secretary of State, who will be required to make such rules in the form of regulations that will, in turn, be subject to affirmative resolution in both Houses of Parliament. When our amended conveyancing proposals were brought before the Committee, our initial view was that it should be for the board to make the rules, subject to the approval of the Secretary of State ; however, on reflection a further degree of parliamentary scrutiny is considered appropriate, and I am happy to commend the amendments that so clearly reflect the Committee's wishes.

Mr. Dewar : This is becoming something of a dialogue, but for the best of all possible reasons the Minister has again been helpful. The decision that the Secretary of State should make resolutions that are open to affirmative procedure strengthens parliamentary scrutiny in an area in which there is a degree of public interest. My hon. Friend the Member for Dundee, East (Mr. McAllion) is muttering. I assure him that the whole point is to allow him into the discussion rather than having it confined to the conveyancing board. I hope that he is pleased at that, and I look forward to hearing his many contributions when we debate the regulations that will ultimately be laid. Amendment agreed to.

Amendments made : No. 27, in page 20, line 25, leave out subsections (12) and (13)' and insert subsection (12)'.

No. 28, in page 20, line 28, at end insert and'.

No. 29, in page 20, leave out lines 33 to 45.

No. 30, in page 21, line 5, leave out or (11)(c)'.

No. 31, in page 21, line 11, leave out a' and insert an independent'.

No. 32, in page 21, line 11, leave out

rules made under subsection (11)(c)'

and insert

regulations made under subsection (10A)'.-- [Lord James Douglas- Hamilton.]

Lord James Douglas-Hamilton : I beg to move amendment No. 33, in page 22, line 4, at end insert--

(18A) Where an offence under subsection (17)(a) above is committed by a body corporate and is proved to have been committed with the consent or connivance of or to be attributable to any neglect on the part of--

(a) any director, secretary or other similar officer of the body corporate ; or

(b) any person who was purporting to act in any such capacity,

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he (as well as the body corporate) shall be guilty of the offence and shall be liable to be proceeded against and punished accordingly.

(18B) Where an offence under subsection (17)(a) above is committed by a partnership and is proved to have been committed with the consent or connivance of a partner, he (as well as the partnership) shall be guilty of the offence and shall be liable to be proceeded against and punished accordingly.'

Mr. Deputy Speaker : With this it will be convenient to discuss Government amendments Nos. 39, 83 and 86.

Lord James Douglas-Hamilton : In a sense, the amendments are technical. They are designed to remove existing doubts about whether the law at present would allow the prosecution of individual partners and managers of organisations involved in the provision of legal services as well as the organisations themselves.

Amendment agreed to.

Lord James Douglas-Hamilton : I beg to move amendment No. 98, in page 22, line 4 at end insert--

(18C) Any independent qualified conveyancer who provides conveyancing services upon the account of, or for the profit of, any person other than--

(a) a solicitor ;

(b) an incorporated practice within the meaning of section 65 of the 1980 Act ;

(d) another independent qualified conveyancer,

knowing that person not to be a solicitor, incorporated practice, multi- disciplinary practice or independent qualified conveyancer, shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale.'

Mr. Deputy Speaker : With this it will be convenient to consider the following amendment No. 137, in page 22, line 4 at end insert :-- (18C) Any independent qualified conveyancer who provides conveyancing services upon the account of, or for the profit of, any person other than--

(a) a solicitor ;

(b) an incorporated practice within the meaning of Section 65 of the 1980 Act ;

(e) another independent qualified conveyancer,

knowing that person not to be a solicitor, incorporated practice, multi- disciplinary practice, or independent qualified conveyancer, shall be guilty of an offence and liable in summary conviction to a fine not exceeding level 4 on the standard scale.'.

Government amendments Nos. 110 and 112.

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