Previous Section Index Home Page

Under part 6 of the Bill, every authorised person must have internal complaints-handling arrangements,
4 Jun 2007 : Column 35
and approved regulators must set standards for that. The Bill recognises the importance of the legal professions disciplining their members, and provides for potential professional misconduct matters to be referred to approved regulators for consideration of disciplinary action.

There are two areas in which amendments were made in another place. First, there were amendments to restrict the circumstances in which the OLC may impose a charge on a respondent when a complaint is received, as under the case fee arrangements operated by the Financial Ombudsman Service. Again, I have sympathy for the arguments expressed in the other place, but the Bill already provides for that fee to be reduced or waived, and I am not yet fully convinced of the merits of restricting the OLC’s flexibility in that way. I therefore intend to table amendments to reverse those changes.

Secondly, following calls primarily—or, I suspect, exclusively—from the Bar, amendments were made providing for the delegation of complaints handling from the OLC back to the legal professional bodies. That point was raised earlier. That change defeats the whole purpose of this part of the Bill, and flies in the face of the deepest felt consumer concerns about complaints handling. Indeed, even the Law Society’s complaints-handling body accepts that

I agree. As far as consumers are concerned, that is a clear red line. I shall, therefore, table amendments to reverse those changes, and I shall be interested to hear the views of the House on that important issue.

David Taylor (North-West Leicestershire) (Lab/Co-op): I must declare an interest, in that I am in a minority in the Chamber because I am not a lawyer. Before the Minister goes on to discuss the OLC’s objectives, will she pay at least some tribute to the midlands-based Legal Complaints Service? It has been noticeably independent of the Law Society, has been recognised by the consumer association Which?, and has been engaged on an agenda of improvement for some years.

As we still have three years until the OLC emerges, will the Minister encourage the Legal Complaints Service to continue to invest in the improvement and independence that has impressed great numbers of people throughout the country? It has dealt with 18,299 complaints against solicitors in the most recent year for which we have figures. That is more than one complaint for every six solicitors. It still has a role in the next three years, has it not, so will my hon. Friend say something positive about what it has done in the past year or two?

Bridget Prentice: My hon. Friend makes the very important point that the improvement made in recent years by the Legal Complaints Service has been remarkable, and much of that is due to the leadership shown by Shamit Saggar and others in ensuring that they deal with things robustly. My hon. Friend rightly
4 Jun 2007 : Column 36
points out that they must continue to deal with complaints about solicitors for the next three years. So it is very important that we manage properly the transition from the complaints services provided by the Law Society and the Bar, so that complaints continue to be dealt with and so that the improvement in dealing with them continues, too. I am very happy to put all that on the record.

Simon Hughes: The Minister helpfully indicated earlier how many of the pre-legislative scrutiny Committee’s recommendations had been accepted and how many had been rejected. I think that I have now calculated that she has addressed each amendment made by the House of Lords, and unless I am mistaken, she has indicated that the Government will accept none of the Lords amendments. Is that the position, or is the reality that although the Government are saying today that they will accept nothing, they recognise that the House of Lords has an important role, and that the best legislation is made when they listen to both Houses of Parliament and do not steamroller things through on the basis of the views of one side alone?

Bridget Prentice: No, the hon. Gentleman is wrong. We have accepted a number of amendments in the House of Lords. For example, we have agreed that the public interest is different from the consumer interest. We have substituted the term “Lord Chancellor” for “Secretary of State”. We have amended the threshold for action on financial penalties. We have accepted the requirement for the ABS licensing authorities to issue policy statements. We have given the board a specific duty to cover ABS in its annual report. We have accepted a number of consumer-focused amendments, a power for ombudsmen to enforce the determination on a complainant’s behalf, and a narrowing of the circumstances in which complainants can be ordered to pay costs, and so on. We have accepted a number of amendments that were proposed in the Lords, and I pay tribute to my noble Friend Baroness Ashton, who worked very closely with others in the Lords in getting the Bill to its current position.

Part 7, which sets out further provisions relating to the board and the OLC, will require that those who are subject to regulation must pay for the cost of that regulation. The alternative—that the changes should be funded through general taxation—does not seem appropriate. Parts 8 and 9 will provide for amendments to existing legislation to align it with the Bill.

Mr. Burrowes: In relation to the board, I have not yet heard whether the Minister will honour the undertaking given in the other place. Hon. Members who are lawyers are used to honouring undertakings, and it would be useful if the Minister would do likewise, particularly in relation to the Lord Chancellor’s power to increase the size of the LSB. I understand that an undertaking was given that that relevant power could be dealt with by affirmative, rather than negative, resolution.

Bridget Prentice: I will have to look in more detail at whether we have given such an undertaking. It is not one that jumps to the forefront of my mind at the moment, but I will look at it, and if we have given an
4 Jun 2007 : Column 37
undertaking, I will seek to find out whether there is a way in which we can carry it out. But I make it clear that I am not making any guarantee to the hon. Gentleman.

I apologise to the House for taking quite so long over the Bill, but as hon. Members will know, it is a pretty hefty piece of legislation. Parts 8 and 9, as I said, will provide for amendments to existing legislation, and I will introduce a number of minor amendments, including those promised in another place, to ensure that the Bill is consistent with existing legislation.

The rules of the Solicitors Disciplinary Tribunal will be subject to oversight by the LSB. The courts will be able to make a costs order in civil cases in favour of a party whose legal representation has been provided on a pro bono basis. Awards will be made at the discretion of the court and will be payable to a designated charitable body. As I have said, the Bill will give effect to the Legal Profession and Legal Aid (Scotland) Act 2007, which introduces new arrangements for handling complaints about lawyers in Scotland.

The Bill will restore consumer confidence. We will see a modern, flexible, transparent and independent system of regulation. We will have a new oversight regulator that can act, and will act, to protect consumer interests. There will be enhanced competition, with lawyers able to provide services in new and innovative ways. Most importantly, we will see the sweeping away of decades of piecemeal reform and a new robust regulatory system in its place that will put the consumer at the heart of the legal system. I commend the Bill to the House.

4.25 pm

Mr. Oliver Heald (North-East Hertfordshire) (Con): I welcome the Bill, which addresses serious issues regarding the regulation of solicitors, barristers and other legal professionals. It builds on the work of Sir David Clementi, whose report has been its cornerstone. I echo the tributes that have been paid to his work.

The Bill has important allies. The president of the Law Society, Fiona Woolf, has said that the society

Jill Johnstone, the director of policy at the National Consumer Council, also welcomed the Bill asking that

Which? has been a strong supporter of the measure and, especially, moves to tackle complaints involving solicitors more effectively.

I join the Minister in paying tribute to the work of my right hon. Friend Lord Hunt of Wirral, who chaired the Joint Committee expertly. The Committee gave the Bill effective pre-legislative scrutiny over a short time scale. My hon. Friend the Member for Enfield, Southgate (Mr. Burrowes), a practising solicitor, also brought his insight to the Committee’s work. It was a sign of the Joint Committee’s effectiveness that the Minister in the other place was able to concede many of the points that it made. Improvements were made to the Bill in the other place and it was to be hoped that the Under-Secretary of State for Justice, the hon. Member for Lewisham, East (Bridget Prentice), would accept that the Bill was now much better than when it started its passage. I pay
4 Jun 2007 : Column 38
tribute to my right hon. Friend Lord Kingsland, who played a big part in improving the Bill.

I agree with the Minister that it is right that consumers should be able to challenge their lawyers effectively when things go wrong and that complaints should be efficiently handled. However, it is also vital that lawyers should be free to act for their clients without Government interference. The Government should not be able to use consumer rights as a cloak to attack people’s basic civil liberty of having a genuinely independent lawyer acting on their behalf.

Legal services make up a major economic sector that is valued at about £20 billion and they generate almost 2 per cent. of the UK’s gross domestic product. It is estimated that UK legal services exports amount to £2 billion a year. London is a major centre for international commercial litigation and arbitration, and English law is widely used as the basis for many international business transactions.

The legal profession is large. There are 14,000 practising barristers, 97,000 practising solicitors, thousands of legal executives and hundreds of licensed conveyers, registered trade mark attorneys and public notaries. Not-for-profit organisations such as citizens advice bureaux and law centres also provide much-needed legal advice. An independent legal profession provides legal services to some of the most vulnerable in our society. Indeed, many lawyers enter the profession with a vocation to help to right wrongs. It is an important check on government that lawyers in Britain will take on public authorities and the Government in court without fear or favour, often in cases that are not popular with the public. Indeed, it was reported only today that prisoners were taking the Lord Chancellor to court to ask not to sit around in prison idly all day, but to be able to work purposefully towards their rehabilitation.

Mr. Kevan Jones: I agree with the hon. Gentleman that lawyers should act in the best interests of their clients. However, does he agree that there are many cases, especially those regarding miners’ compensation that my hon. Friend the Member for Bassetlaw (John Mann) and I have raised, in which a huge number of lawyers, some in “well-respected” legal firms, did not act in the best interests of their clients—they did not care about the interests of their clients—but worked for their own interests? Surely that scandal shows that self-regulation involving the Law Society has not worked and that people need the protection offered by the Bill to get legal redress from such lawyers.

Mr. Heald: Yes, I agree absolutely. The hon. Gentleman and I have made common cause on some of those cases and have been disappointed to some extent by the Government’s response, especially in relation to claims handling. However, he and the Government must recognise that having a strong legal profession, independent of Government, is an important constitutional issue and improvements to the regulation of the legal profession should respect that. It is not in the consumer interest to have Government control over lawyers, because many consumers of legal services are taking cases against public authorities and the Government.

British exports could be threatened if the international perception is that our legal profession is
4 Jun 2007 : Column 39
not truly independent of Government. Indeed, the chairman of the Bar Council has described the plans as “an absurd own goal” and he and the senior partners of five of the largest legal firms have written to the Economic Secretary to the Treasury pointing out how important the issue is and explaining that overseas legal professions are already protesting about the Government’s plans. We believe that the amendments made in the other place have helped to save British legal services exports, but can the Minister give an assurance that legal services exports are safe under her plans? If she cannot, is not £2 billion a year in lost exports a high price to pay?

The Government appointed Sir David Clementi as long ago as July 2003 and the focus of his report was correctly summarised by the Minister as the complexity of the regulatory framework, how complaints about solicitors were being handled and the restrictive nature of the current business structures for lawyers and skilled professionals. However, I would say that the area of most concern was how consumer complaints against solicitors were being dealt with. There were concerns about efficiency and the overlapping powers of the oversight bodies. Sir David described the current regime as

and the Government accepted that phrase. He suggested the three main reforms: the legal services board, with its statutory objectives; the new office of legal complaints; and liberalisation through alternative business structures. We agree with that approach.

The handling of complaints against solicitors started to become a major issue as long ago as the 1980s, when it first became clear that it was taking up to two years to deal with some complaints. More recently, we have seen the cases referred to by the hon. Members for Bassetlaw (John Mann) and for North Durham (Mr. Jones), in which solicitors firms have fallen into disrepute over the handling of compensation claims by former miners.

The activities of trade unions have been criticised in connection with those cases. It seems odd that today the Minister has said that it would be all right for a trade union official who is not a lawyer to appear in court, to give legal advice and to carry out other activities associated with the work of a lawyer and there would be no regulation of that person, but someone who works for a law centre or citizens advice bureau would be regulated. That may be something that trade union leaders want, but trade union members should not be treated in that second-class manner. Trade union members are consumers every bit as much as any other person and I believe that they should be treated equally. The Minister said that lawyers employed by trade unions would be regulated, but we all know of cases in which trade union officials attend tribunals and other forums on behalf of members, so surely they should be regulated.

Bridget Prentice: I think that the hon. Gentleman is inadvertently misleading the House by suggesting that trade union officials would appear in court. They have no rights of audience in court, so they would not be
4 Jun 2007 : Column 40
able to do that. The Bill will protect trade union members because if a union offers reserved legal services, those services must be carried out by qualified lawyers, who will be subject to regulation by an approved regulator. The exemption applies only where the union provides legal services by virtue of membership, and not in any wider sense. I hope that the hon. Gentleman understands that the Bill does not go quite as far as he seems to be suggesting.

Mr. Heald: The Minister may misunderstand the position herself. I have on many occasions attended tribunals where there has been a trade union official—often, I must say, expert in the law—on the other side with a right of audience. If she looks at clause 12, she will see that the reserved legal activities are set out there. They include exercising rights of audience, conducting litigation and giving legal advice in connection with any of the activities listed. Those are things that trade union officials do, and I cannot see why she would want trade unionists to have second-class status under the legislation.

Mr. Kevan Jones: I used to attend industrial tribunals on a weekly basis, as an unqualified solicitor and as a trade union official, and given some of the pathetic barristers that I had to deal with, I never saw myself as a second-class citizen. Does the hon. Gentleman agree that what a trade union official or layperson can do is quite limited? There were only two sets of proceedings that I used to appear in: one was industrial tribunals, and the other was county court proceedings, in which anyone can represent themselves. In terms of the scope of the legal services, one has to be legally qualified to represent people at a higher level—for example, if a case goes to appeal.

Mr. Heald: The hon. Gentleman will see in the Bill the list of activities for which, if undertaken by a trade union official, there should be no regulation. Yet if a person from a citizens advice bureau did one of those activities, the situation would be different. There are tribunals where trade union officials appear, but of course he is right that not every tribunal would allow that to happen. I do not see why members of a trade union should not have the protection that the Bill would give someone from the citizens advice bureau or a law centre doing the same work. We can pursue the subject further in Committee, but that position seems to be all of a piece with the exemption that applied to trade unions as regards their activities as claims handlers. My view on that is that what is good for one group of people doing a particular job should be good for all groups that do that job.

At the moment, legal complaints are handled in-house by the Law Society. A claimant who is dissatisfied can go to the legal services ombudsman, who can ask that the complaint be looked at again. There has been some suggestion that criticisms of the way in which barristers deal with complaints are on a par with criticisms as regards solicitors, and that simply is not so. The ombudsman has regularly praised the Bar for the way in which it deals with such cases, and has said:


4 Jun 2007 : Column 41

She praised the “excellent progress made” on the speed of handling cases, and said, on transparency,

As I am sure that the Under-Secretary of State for Justice, the hon. and learned Member for Redcar (Vera Baird), would acknowledge, if there are disciplinary proceedings against a barrister, there is nearly always a conduct case, and in those cases it helps if the people carrying out the examination are skilled at cross-examination and at finding out what really happened. As I have said, when I discussed the subject with Which? some time ago, it acknowledged that the way in which the Bar dealt with such cases was very good.

Mr. Kidney: The hon. Gentleman prays in aid Which?, but has he seen the briefing that it gave hon. Members for today’s debate? It says:


Next Section Index Home Page