The Parliamentary Under-Secretary of State for Constitutional Affairs (Bridget Prentice): I beg to move,

I think that I have sat under your chairmanship before, Mr. Conway, and I am delighted to do so again. I know that you will be fair as we deal—or not, as the case may be—with what is clearly a difficult, contentious and controversial area of law.

The order comes under section 29 of, and part I of schedule 4 to, the Courts and Legal Services Act 1990. It will enable qualified fellows of the Association of Law Costs Draftsmen to exercise limited rights of audience and rights to conduct litigation in England and Wales in connection with legal costs matters. Once the order has been made, a second order will be laid to extend the legal services ombudsman’s jurisdiction to oversee complaints against costs draftsmen.

The ALCD is the professional association that represents and regulates law costs draftsmen working in England and Wales. Costs draftsmen work in a small, highly specialised field, drawing up and analysing bills relating to all aspects of the legal costs that are included in solicitors’ bills for cases in all courts. Such costs can include the solicitor’s fee, the court fees, barristers’ fees and expert and witness fees.

The preparation of such bills is specialised and is almost always carried out by a costs draftsman rather than a solicitor. Solicitors prepare their own bills in a minority of cases, such as straightforward cases in which the legal costs will be met entirely by the solicitor’s own client and are relatively low. Some costs draftsmen are employed full-time by solicitors, while others work in partnership as directors or employees of law costs drafting firms or as freelancers on a partnership or sole practitioner basis. Depending on the circumstances of the case, the costs set out in solicitors’ bills that are prepared by draftsmen relate to cases heard in civil, criminal or family courts, and they are met by the client, the client’s opponent or from public funds.

Currently, draftsmen must seek a judge’s approval on a case-by-case basis to appear at a costs hearing. Members of the public cannot instruct a costs draftsman directly, and instructions must be channelled through a solicitor, who will then be responsible for the draftsman’s conduct before the judge.

The association seeks recognition as a body authorised to grant rights to its fellows to conduct litigation on behalf of clients in matters relating to legal costs and to appear at legal costs hearings in all courts without having to seek a judge’s permission. It wants clients to be able to instruct draftsmen directly, rather than only through a solicitor. It also wants costs draftsmen to be authorised and regulated by their own professional association in relation to all aspects of their work as law costs draftsmen, rather than under the supervision of solicitors in respect of their conduct in court, as at present.

Those rights will allow the association to grant rights of audience and rights to conduct litigation to suitably qualified fellows in respect of the assessment of the costs payable in all courts and all types of cases, whether family, civil or criminal. That will apply irrespective of who ultimately pays the legal costs claimed in the solicitor’s bill that is being assessed.

Admittedly, only a very small number of law costs draftsmen—500 over the next five to 10 years—will be able to exercise such rights, but, from a competition point of view, it is important that they can do so. They will be able to act independently of solicitors in legal costs proceedings, which should simplify access to their services. That will potentially cut costs by enabling consumers to have direct access to draftsmen’s expertise, rather than being obliged to instruct and pay for a solicitor, too. Consumers and costs draftsmen will also benefit from the fact that the draftsmen will be authorised and regulated directly by their own professional body with its expert knowledge of the specialist area involved, rather than indirectly through solicitors, who are generally not experts in this area.

The legal services ombudsman has been consulted, and she has confirmed that she is willing for her jurisdiction to be extended to cover complaints against law costs draftsmen. Owing to the very small numbers involved, it is anticipated that her office will not be overburdened by complaint.

The order has passed through the required statutory approval procedure, and it has been considered and approved by the legal services consultative panel, the Office of Fair Trading and the senior judiciary. As a result, I hope that it will have the Committee’s full support. If the order is approved, it is anticipated that the Legal Services Bill will be amended to include the ALCD on the list of approved regulators. I commend the order to the House.

Mr. Jonathan Djanogly (Huntingdon) (Con): As the Minister has said, the order is not controversial, and it is made pursuant to the Courts and Legal Services Act 1990. However, I would be grateful if the Minister were to explain what procedures the association will follow in granting such rights to its members, and when the proposed qualification regulations are likely to come into force. Also, what disciplinary procedures will the association introduce for those members with rights of audience and rights to litigate in court? We are pleased that the order has the approval of the consultative panel established by the 1990 Act, and, as the Minister has said, of the Office of Fair Trading and of the designated justices.

Norman Baker (Lewes) (LD): This is a hugely controversial matter that will detain us for some time. Oh, sorry, that is the next statutory instrument I am doing.

Bridget Prentice: Tomorrow.

Norman Baker: Tomorrow. No, the order is quite uncontroversial, and it has the support of us all, so Opposition Members who wish to undertake other activities will be free to do so shortly.

I have a few points briefly to raise with the Minister. First, I welcome the extension of jurisdiction for the legal services ombudsman, which seems entirely sensible, although I am slightly surprised that it is not being undertaken coterminously. When will the jurisdiction be extended, and when will the relevant statutory instrument be introduced? The two measures ought to be introduced at the same time.

Secondly, although the proposal appears uncontroversial to me and my hon. Friends, was any opposition expressed to it? If so, what were the elements of that opposition and have they been satisfied? The extension to the ALCD application was cut back following some comments, so perhaps that answers my question; however, were any other arguments put about which the Minister has concerns?

Finally, will the order be subject to review? The legal services ombudsman exercises a review of sorts by dealing with complaints as and when they arise, but given that the arrangement is a relatively new departure, will Ministers and others in 12 or 18 months’ time be able to consider how the new arrangements are working, so that they can take steps to amend them, if appropriate, in either direction?

Bridget Prentice: In answer to the hon. Member for Huntingdon, the law costs draftsmen will have those new rights, if they are fellows of the ALCD. That means that they have met the association’s educational training and professional indemnity insurance requirements, completed no less than seven years’ practical experience and completed a minimum of seven hours’ continuing professional development annually to ensure that their skills remain up to date. As I have said, that should cover about 500 draftsmen.

In answer to the hon. Member for Lewes, a second statutory instrument will be laid in two weeks’ time to extend the jurisdiction of the legal services ombudsman. The order is subject to the negative resolution procedure, and it will come into effect on 5 January, so the two orders will in effect be coterminous. I am not aware of any outstanding concerns about the extension of the rights of audience. Of course, law costs draftsmen will be able to appear in court only to discuss costs, and not any other aspect of any form of legal service.

Norman Baker: On the review, will there be an opportunity to examine how the measure works in practice?

Bridget Prentice: Yes; the Legal Services Bill will change the way in which legal services are reviewed, and the ALCD will come within that. The arrangement will be reviewed, and the relevant activities will come under regulation by the legal services board, which will consider the licensing of all regulators—anyone who is not up to scratch could have their licence removed. In that respect, there is proper cover; however, as I have said, there is at the moment a power to revoke, and, if the necessity arises, there will be such a power through the LSB.