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“Which? has found that the BSB’s complaints handling is not at all transparent, is far too complicated and bureaucratic, relies too heavily on ‘volunteers’ and is not particularly accessible.”
That is hardly an endorsement of the present system.
Mr. Heald: Perhaps that is an interesting reflection on a change of personnel. All that I can say is that when I spoke to a representative of Which? when the White Paper came out, they were very complimentary about barristers’ approach to professional standards. Which? said that it wanted barristers’ skills to be brought to the new office for legal complaints. It is important that we do not lose those skills, because one thing is sure: no one will be better at finding out what really happened in a particular incident, and at understanding the full issues of conduct, than someone who is skilled at finding out such things professionally.
Simon Hughes: In the debate about complaints—MPs have great experience of complaints against solicitors rather than against members of the Bar, although there are complaints against both—does the hon. Gentleman accept that the system has sometimes not worked very well for the professions, either? Significant numbers of solicitors have been unhappy about the old system of dealing with complaints, which has been as bad at dealing quickly with their concerns as it has been at dealing with the concerns of lay users of their services.
Mr. Heald: Yes, I agree entirely. One of the first points that I made was that I support the setting up of an office for legal complaints. If we can find a way of harnessing for the future the skills that the Bar has brought to the process, that would be a better way forward than immediately reversing the amendment made in the other place.
John Mann: How would the hon. Gentleman deal with a complaint from a consumer where—for example, in many of the hearing loss claims on behalf of textile workers—unbeknown to the consumer because of their limited understanding of the process, the legal executive handling the claim goes to a barrister for five minutes of quick advice, but between them they handle the claim very badly? To whom should the consumer complain?
Mr. Heald: I suspect that the hon. Gentleman is referring to a particular case, of which I do not know the full circumstances. Depending on the circumstances, we would want the actions of both individuals to be carefully and effectively analysed in a speedy and transparent way. That is what we are all hoping the office for legal complaints will produce.
John Mann: That is precisely the point. There is a raft of complaints concerning the process whereby the solicitor gives the work to a legal executive, who unnecessarily calls in a barrister for opinion, in order to advocate the case on behalf of the individual. Who should the complaint in such cases go against—the solicitor or the barrister, or should it not be against both?
Mr. Heald: One would start in such a case with the solicitor’s firm, but it is important that the new office for legal complaints is a one-stop shop and that each aspect of the problem outlined by the hon. Gentleman can be properly, speedily and transparently investigated. That is the outcome that we all seek.
The legal service ombudsman’s reports on the Bar were positive and praised the way in which it dealt with matters. It is not chance that, as the hon. Member for North Southwark and Bermondsey (Simon Hughes) observed, most of the complaints that Members of Parliament have received have been about the way in which solicitors have performed. Zahida Manzoor, the legal services ombudsman, fined the Law Society £250,000, stating that she was imposing the penalty because of the inadequacy of the Law Society’s plan for securing improvements to its complaints handling procedure.
The White Paper that followed the original Clementi report committed itself to the three main provisions proposed by Sir David. The Joint Committee then made some valuable recommendations pointing to particular areas of concern. It is right to pay tribute to the Government for listening to a substantial number of those, but on regulatory objectives, the Committee recommended that
“protecting and promoting the public interest”
should be included in the Bill’s list of objectives, and that the objectives should be redrafted to make explicit reference to the independence of the legal profession. The Committee found that the Bill gave the Secretary of State too much power, and recommended that that should be re-examined. It also expressed concern about alternative business structures, highlighting the potential for conflicts of interest, and about access to justice. It felt that the office for legal complaints should be not just a “rebrand”, but a genuinely new start, particularly for complaints relating to solicitors. In that connection, how does the Minister justify simply moving the office to Coventry from Leamington Spa—a move that is deliberately designed to ensure that the very staff whose work has been criticised would continue to deal with complaints against solicitors—and how can she assure us that that constitutes something good for the future that will tackle the problems that have bedevilled that part of the law since the 1980s?
The Government have accepted that there should be explicit reference to independence and that there
should be reconsideration of the Secretary of State’s role. In the other place, the Government tabled amendments that dealt with many of those issues, but given the issues on which they lost votes, whether the amendments were tabled by a Cross Bencher, a Liberal Democrat or a Conservative, they seem rather unbending if the Minister’s tone today is anything to judge by. That is a pity, because the process has been relatively co-operative and progress has been made. For example, an amendment was passed that meant that the Lord Chief Justice’s concurrence would be required before the appointment by the Lord Chancellor of the chairman of the board. That was a means of securing for the board some independence from Government. The Minister’s comments suggest that she has some sympathy with that idea, although she has made it clear that the Government will reverse that decision. We must find a way that ensures that it would not be possible for the Lord Chancellor to appoint friends of his to the board without any check. It would be intolerable and unprecedented if it was possible to put friends of the Labour party or friends of the Lord Chancellor on the board, and that would not give us the independent, free legal profession that we are entitled to expect in this country. Even if one accepted that the present Lord Chancellor could be trusted, any such appointment would still be a constitutional issue.
The concurrence of the Lord Chief Justice provides a necessary check. The Minister says that she will reverse that, but it is important to have some form of check in the system—some consultation and some way of ensuring that our legal profession can continue to be genuinely independent.
Mr. Heald: Before I give way to the hon. Gentleman again, he should reflect on the fact that the legal services board, appointed by the Lord Chancellor, has the power to change the way in which the front-line regulators operate and seriously to affect the regulation of the legal profession. It would be wrong to do that in anything other than a transparent way with proper checks and balances.
Mr. Jones: I agree with the hon. Gentleman about transparency. Is it not also a fact that the appointments will be made with the Nolan principles in place, which the present Government introduced and which will make the process quite transparent? I would not agree with the situation described earlier either—no future Government of any party should interfere in the process—but why does the Lord Chief Justice’s involvement make the board more independent?
Mr. Heald: The reason for suggesting the Lord Chief Justice is that he is the head of the judiciary and as such has a position that is widely respected in the country as that of an independent figure—
Mr. Heald:
We are talking about pillars of the constitution. Let us think about the judicial pillar—our courts. Right at the top, we have the Lord Chief Justice.
Under the former arrangements, the Lord Chancellor used to span both pillars: he was part of the Executive and the most senior judge. However, it seems appropriate that under the new arrangements there should be appointments by the Executive, but with the concurrence of, after consultation with, this very important figure in the other pillar. Let us not forget that the legal profession gives us our judges, so if it was not truly independent, that would have very worrying implications for our constitution. By having the most senior judge involved in the process, the constitutional position would be subject to a proper check. That is my view, although I am willing to accept that there may be other ways in which to achieve the objective and that we can discuss the matter further in Committee. However, doing nothing is not acceptable and simply reversing the amendment would be intolerable.
Mr. Kidney: Earlier, I quoted from a letter from Sir David Clementi. Would the hon. Gentleman accept a position whereby the Lord Chancellor made the appointment, but after a Nolan procedure had been undergone and a senior member of the judiciary had served on the Nolan committee that recruited?
Mr. Heald: That is better than nothing—we would be prepared to debate it. However, there is little to criticise in consulting the most senior judge. The Under-Secretary said that she did not want to do that because it gives consumer groups the wrong impression. However, if it is the right thing to do, surely we should do it.
Mr. Burrowes: Is it not a concern that there is little on the face of the Bill to guarantee independence? There is no guarantee, beyond the Under-Secretary’s assurances, that the appointments process will follow Nolan principles. The independence, accountability and openness that Nolan guarantees is not enshrined in the Bill.
Mr. Heald: My hon. Friend makes the point clearly. I agree that he outlines a concern. We should not trifle with the legal profession’s independence, which is as important as the consumer interest. They are both important principles, which need to be respected. Indeed, the Government have accepted that because they included the public as well as the consumer interest in the Bill. That was the right decision, but further work remains to be done.
The other place made changes to the ground on which the board could take action against an approved front-line regulator and to clarify that the board is to act only as a supervisory regulator. The Under-Secretary said that she wanted to refine that. Does she mean a drafting change or a substantive change to what was agreed in the other place? Perhaps the Under-Secretary of State for Justice, the hon. and learned Member for Redcar, could comment on the matter in her winding-up speech. If the regulator is only supervisory and acts as a backstop, that is clearly what Clementi proposed and what we all expect. However, if the Under-Secretary intends to change the Lords proposal, it is important to know the exact reason for that because the protection is important.
The Lords tried to raise the threshold for intervention by the board and constrain the powers of direction and public censure so that the regulation was lighter touch, not heavy handed. The Under-Secretary says that she wishes to overturn those changes, but does she not agree that the Clementi model is that of a supervisory regulator and that the provisions will set the tone for whether regulation is light touch or heavy handed? I understand that she has examined various ways in which to suggest appropriate intervention and I welcome her proposal to reconsider ensuring that the oversight nature of the board is included in the Bill. May I invite her to continue in Committee the search for the right words to describe the threshold for intervention? Heavy-handed regulation is in no one’s interests—I know that she agrees.
In a similar spirit, the Government successfully tabled amendments to limit the circumstances in which the board could exercise its power to fine. They responded positively to protecting and promoting the public interest in the regulatory objectives. Limits were placed on the discretion of the office for legal complaints, and that is welcome. However, the other place made a change to provide that charges for the complaints process should not be levied when the complaint was unfounded and the matter was handled properly in-house. I understand that the Under-Secretary proposes to abandon the principle that the innocent do not pay for a complaint against them and that the polluter pays. I find that surprising given that she said that she agreed with the thinking behind the amendment in the other place. Surely there is a compromise to be found there: if she agrees with us, surely we can find words to express that agreement.
Lord King also persuaded their lordships of the need to delegate complaints handling to an improved regulator by direction of the board. That relates, of course, to the highly regarded Bar standards board. It is well known that the Bar is tough on those who transgress: it is part of the culture of the Bar, and it is good at uncovering wrong-doing, so it would be counter-productive to lose those skills under the new system.
Turning to alternative business structures, the principal concern has been the threat of cherry-picking, whereby perhaps a supermarket chain or some other multiple sets up booths to deal with some small aspects—the profitable aspects—of legal services, as a result of which the wider service provided by high-street solicitors and law centres will be lost, widening the legal advice deserts and making life much more difficult for individuals seeking legal advice, particularly the most vulnerable. An amendment was passed in the other place whereby the licensor has to make an investigation of the access to justice implications when determining an application to become an alternative business. If the Minister accepts that that is a vital issue—that is what she said—and if she is happy that her proposals will not damage access to justice, why does she object to the amendment? She seems determined to reverse something that simply provides for what she claims to want, so perhaps she can find some way of squaring that circle, too. One thing is for sure: it is not in the interest of consumers to lose access to justice. A supermarket providing some small legal service is all well and good, but if people
want to talk about family law problems or other matters of legal concern, they will have to travel literally tens of miles.
Finally, the Bill will transform the way in which legal services are provided. We consider the Bill to be broadly satisfactory in its current form. We would be alarmed, however, if the Government chose to try to undo all the good work that was done in the other place. There is substantial consensus over this Bill and the changes made reflect the spirit of Clementi and do not conflict with it, so there is no issue of principle between us.
The Joint Committee noted that the public interest and the consumer interest do not always equate, particularly in matters of law, and it is good that the Bill now reflects both interests and that the Government have agreed that it should do so. Although it is vital for consumers to be able to remedy wrongs done to them by lawyers, it is also important that they have access to lawyers who are independent of the Government so that they can pursue the Government for the wrongs that they do. There is therefore no conflict between protecting the consumer and protecting the independence of lawyers. A fair and just system works to the benefit of all. Indeed, it is very much in the public interest. We believe that it is vital to consumers to protect access to justice. Legal services are sometimes commercial in nature, but they often amount to an important part of the welfare state.
We look forward to examining the Bill further in Committee. We see some room for compromise and further reflection, and we will want to raise a range of issues. One issue is whether there should be some regulation for will writers. As the Minister knows, that is a classic area for burying one’s mistakes because problems often come to light after the death of the person who made the will. Some standards should be set, but I am not suggesting that only solicitors should be able to write wills. In some ways, this area falls into the same category as claims handlers, so perhaps the Minister will consider whether similar provisions should apply.
At this stage, and taking account of the current state of the Bill, we see no reason to divide the House, but I want to make it clear to the Government that if they abandon a co-operative approach and attempt simply to reverse the Lords’ improvements, our attitude will change.
4.54 pm
Mr. David Kidney (Stafford) (Lab): I declare my interest—a modest one—as a non-practising solicitor. It is important to acknowledge something that may not be apparent from the number of hon. Members rushing back from the Whitsun recess to take part in the debate—that this is a landmark Bill in our generation for the regulation of legal services. Yes, we are going to meet the concerns of consumer groups, but it is also important as we legislate to recognise that legal services are vital to the upholding of the rule of law, the functioning of our democracy, and the effectiveness and success of our country’s commercial interests.
Throughout our history, there are some fine examples of the outstanding values of talented lawyers—whether it be in respect of criminal law,
human rights law or even immigration, to mention a recent example discussed in the national media last week. When an injustice is prevented or put right later, and the case attracts a lot of attention, it is noticeable that the person who was the victim of the injustice—or about to be threatened with it—turns to their legal team and expresses their heartfelt thanks for their skill and dedication in defending them. It is important to bear that in mind, and to preserve the talent and success of legal services in our country. The Bill’s provisions for new business structures are intended to preserve all that is best in our legal services and give them the ability to flourish in new and changing markets.
A minority of lawyers are incompetent and, sadly, some of them are dishonest. It has not always been apparent that existing systems for identifying and rooting out such dangerous characters have been as effective as they should have been. When people complain, we do not often hear that the complaints procedures have been transparent; most people criticise their opaqueness. Often, consumers think that the system lacks independence, and that it looks as though lawyers are judging their friends—other lawyers. In many cases, the processes of dealing with complaints are far too slow. All that adds to an air of dissatisfaction, which has led to the pressure for change from consumer groups. If we also take into account doubts about the openness to competition of legal services, investigated by the Office of Fair Trading in 2001, we start to see the powerful case for change.
The legal profession has been structured through a series of professional bodies, which, historically, have taken on both representation and regulation of the members of their profession. The various professional bodies have appeared to act in silos—barristers, solicitors, legal executives and the like. It has not even been possible for different legal disciplines to form businesses together. Clearly, if it is not possible even for different kinds of lawyers to form businesses together, it has not been possible for different kinds of professionals to form businesses together and provide services in one business unit. If neither of those are possible, it is certainly beyond the pale at present for a banking or retail business to offer legal services with common owners and managers.
That was the scene surveyed by Sir David Clementi in 2003. After his investigation and report, he recommended a legal services regulator, an independent office for legal complaints, and new alternative business structures for the formation of legal businesses. All those recommendations form the basis for the Bill.
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