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Mr. Burrowes: Not at all. Far be it from me to speak on behalf of the legal profession—I am as much a consumer and as much a lawyer as others. However, an appointment as crucial as this, which involves a supervisory role—a real break from the past—must be dealt with uniquely, because it raises clear questions about independence that need to be dealt with satisfactorily.
John Mann: Will the hon. Gentleman give way?
Mr. Burrowes: I want to make some more progress.
In the other place, arguments were made about areas that I do not think can be advanced as equivalents. The question was asked, “Why should we do this? Is it not the same as the head of Ofcom being appointed by Rupert Murdoch or the chairman of the Competition Commission being the chairman of Tesco?” Those arguments are not well made. The independence of the legal profession is significant: it is a cornerstone of the rule of law and needs to be handled cautiously.
The Government seek to give assurance by saying that the appointment process will be conducted according to the Nolan principles and that it will be conducted diligently and transparently. The concern, though, is whether that is enough and whether the Government should have gone further in another place. There are legitimate questions and concerns. Is it significant that the Government resisted the amendment saying that the appointment should be made in accordance with the rules applicable at the relevant time? Why did they resist that amendment so vigorously? Surely a justified concern is properly dealt with by the Lord Chief Justice having the concurrent responsibility for an appointment.
The appointment process also raises other questions. The Government have not yet made clear how it should properly be carried out and where formal responsibility for appointment lies. It will be essential to ensure that the appointment panel is demonstrably independent of Government. Under the ordinary procedures for public appointments, the panel would no doubt have been chaired by a senior official in the Department for Constitutional Affairs, but that would not be satisfactory in a context in which independence from Government is paramount for consumers up and down this land.
The concern about independence goes further than the appointment process and relates, among other things, to the powers exercised by the legal services board. I urge the Minister to think again as the Bill proceeds to Committee and to take seriously the amendment and the supporting argument that those powers should be exercised only when there is a significant rather than a marginal adverse impact on the regulatory objectives. That amendment referred to the important point that, as all hon. Members have said, the legal services board should have a light-touch role—a supervisory role that could be properly enshrined in the amendment.
The regulatory structure proposed in the Bill cannot work unless the presumption is that the approved regulators carry out their responsibilities diligently and competently in the public interest. They are entitled to expect a degree of discretion to act on their analysis of what is needed. The front-line regulators need to be
distinct from the supervisory role of the legal services board. The board should not be able to exercise its powers simply because it would have reached a different decision on the matter concerned and has thus concluded that the regulatory objectives would be better served by a different decision. It is important that the board does not just second-guess the front-line regulators. It must see its role as an important supervisory one that should involve intervention only when it judges that there has been a significant adverse impact.
Further to the issue of independence, I look forward to the Minister’s opinion on whether the undertaking given to the other place about the power of the Lord Chancellor to increase the size of the board, which could affect the decisions that are made, could give an impression of manipulation. Will there be an undertaking that the powers to increase the size of the board will be achieved by affirmative resolution rather than negative resolution?
Vera Baird: The hon. Gentleman raised that issue with the Under-Secretary, my hon. Friend the Member for Lewisham, East (Bridget Prentice), when she opened the debate. The Delegated Powers and Regulatory Reform Committee considered that a negative resolution was sufficient, and we are content to accept its advice.
Mr. Burrowes: I am not sure of the order of events relating to the Committee’s advice, but certainly in the other place a clear undertaking was given that the issue would be decided by affirmative resolution if necessary, and that matter will need to be progressed.
I agree with the concern expressed by the Government in their response to the Joint Committee. They said:
“The Legal Services Board should exercise its powers only where approved regulators are clearly failing”.
Unfortunately, that undertaking is not to be carried through, according to the Government’s latest indication. The impact provision needs a qualifying adjective: “clearly failing” were the Government’s words and that is what needs to go into the Bill. I urge the Government to review that aspect of it.
Independence covers other areas, including costs in relation to the legal services board. In making these comments, I am not just squeaking on behalf of members of the profession, who will have to pay more. I want to look beyond that to the important issue of independence. Is it reasonable to have no contribution from the Government in terms of the supervisory role of the legal services board? Its functions, which I hope we would all agree with, relate to public assurance. When hon. Members have expressed concerns about some activities of the legal profession, is it right that the legal profession should be depended on to be able to fund the supervisory role of the legal services board? Surely it is important to have the independence that is marked by not depending on the purse strings of the legal profession. Inevitably, the high initial costs—we heard the latest figures today and they may well rise—will fall on practitioners, but not only on them. They will not simply take a cut in their salaries. The costs will also fall inevitably on consumers. Consumers have an interest in whether the initial costs should be borne, at least in part, by the Government.
The Government say in response that those being regulated should bear the cost of regulation. Why, then, do they have a different approach to claims management and to the accountancy profession? It is important that while the legal profession recognises the full cost of the first tier of regulation, the supervisory tier has a distinct purpose. The supervisory tier of the legal services board guarantees for consumers as much as anyone else that there are ethically sound and competent lawyers who are independent of the state.
Let me use not my own words, but those of Sir David Clementi, whose work has been widely approved:
“The issue arises as to how the LSB should be paid for. At present a substantial part of the oversight function is paid for by the State: judicial oversight falls to the taxpayer, as does the cost of the oversight function carried out by Government departments. The arguments in favour of the Government contributing to the cost of oversight functions, beyond the fact that it does already, are...that the LSB, in pursuit of its objectives...such as ‘access to justice’, has a wider role in the public interest than the oversight of practitioners in the legal sector; and”—
this is a crucial argument by Sir David—
“that an element of payment by other than the bodies being regulated confirms that the regulator is independent of the regulatee.”
Sir David went on to raise the interesting precedent in the proposed funding of the Financial Reporting Council. Its funding is to be split, with two thirds falling to the private sector and one third to the Government. How the split should be made between the private sector and the Government for the LSB would need to be covered in statute and no doubt subject to parliamentary scrutiny. Sir David points to that example of the Government meeting one third of the cost of the Financial Reporting Council. The Government also meet the full cost of the supervisory tier of health care regulation—the Council for Healthcare Regulatory Excellence. However, they have not provided an adequate explanation of why they consider it appropriate to meet part of the cost of the supervisory tier of regulation in the accountancy field, but not in respect of legal services. In the case of the CHRE, the Government say that it is appropriate for them to pay because it is important to demonstrate that the organisation is independent of the medical profession. Why can that argument apply to the CHRE but not to the legal profession? The legal services board should be demonstrably independent of the Government and the legal profession. Why is the argument good for the medical profession but not for the legal profession? Are the Government proposing a new constitutional settlement in which they value the independence of the medical profession but not that of the legal profession?
It is important to ensure that the legal profession is not expected to finance the element of regulation that focuses primarily on the public interest. The legal services board will not only deal with the regulation of legal services but consider the interests of legal service providers and others entering the field. That has significant public policy implications. Is it right to expect the legal profession to finance public policy considerations, which the Government currently fund?
The Government propose to transfer costs, which they currently fund, to the legal profession for the legal services ombudsman. They propose that the legal
profession should pay the costs of the office for legal complaints, part of those of the Office of the Legal Services Complaints Commissioner, which the Bill abolishes, and those of the legal services consultative panel. The Government could continue with their current spending commitments, thus ensuring the preservation of the important principle of independence.
A continuing contribution from the Government may act as an important brake on the legal services board expanding its activities unjustifiably. One would hope that there was no greater brake or check on that than the public purse. The board should not be able to increase its activities and simply pass on the costs to the legal profession unchecked. Many want the board to operate as a light-touch supervisory body, and costs need to be taken on board in that context and in that of the debate on independence.
I cannot finish without mentioning access to justice, in which I have been involved as a solicitor for 12 years. The Government wish to reverse an amendment, and that means removing the guarantee that access to justice will be taken into account in decisions on licensing prospective alternative business structures. Concern was expressed in the Joint Committee and evidence was taken from the Legal Aid Practitioners Group, which stated:
“Such changes are seen as a potentially catastrophic threat to the networks of high street solicitors, with the damage to access to justice for ordinary people that that would cause.”
That may be overstating the case, and it is important that access to justice works both ways.
Mr. Kevan Jones: I agree with the hon. Gentleman about access to justice. However, does he agree that any method that keeps inefficient and poor solicitors in business does nothing to provide access to quality justice, which many of his constituents and mine should expect?
Mr. Burrowes: I am grateful for that intervention. I am the first to admit that I have seen and been frustrated and appalled by the bad practices that occur. However, there are many good local high street practitioners who provide an invaluable service. The baby should not be thrown out with the bathwater that has been stained by solicitors who cause problems. In some circumstances, access to justice can be promoted by lower costs and providing services away from high street premises. One should not simply wed the argument about access to justice to the number of offices on a high street.
Nevertheless, the Carter reforms pose a threat. As we speak, good quality solicitors’ firms—not the bad ones—are going out of business. I can give the Under-Secretary a list of such colleagues and firms.
Vera Baird: The hon. Gentleman knows very well that approximately 95 per cent. of all solicitors signed the unified contract again, thus showing their willingness and, indeed, anxiety to continue working on legal aid. I do not believe that he can be right.
Mr. Burrowes:
The Under-Secretary knows about the great concern about signing that contract. The fact that 95 per cent. of solicitors signed it does not constitute a
ringing endorsement of the Government’s approach to legal aid. One has to look beyond that at what is happening on the ground and the number of solicitors’ firms that are worried about the future, even before the Carter reforms have been effected.
Although we should not be wedded to the principle that access to justice depends on having high street firms everywhere, we should at least take account of it. The amendment proposed that due weight should be given to that and that, when appropriate, investigations should be conducted.
I welcome the Bill for many reasons but especially because it simplifies matters. The Joint Committee helpfully provided a diagram in colour of the current regulatory maze. It could well be a design that my children did during half term. Over the page, the maze is transformed by the proposed reforms. That is welcome to the profession and consumers. Above all, the Government must ensure that they do not challenge and undermine the profession’s independence.
6.36 pm
John Mann (Bassetlaw) (Lab): I declare an interest, which is different from most of the others that have been declared. I have initiated regulatory action against 45 firms of solicitors. To date, none of them has won. My constituents have won in every resolved case without exception. The numbers that the Law Society records are a tremendous underestimate because, being a moderate man, I have been prepared, when my constituents agreed, to conciliate. Many cases did not therefore go through the regulatory process for complaints. The 45 firms have been described as a small number of solicitors, but those against which I have taken action had approximately 80 per cent. of the business—the claims and the amount of money that they were paid for handling them—in relation to the coal miners’ compensation scheme. Some battles have been small, marginal and easily won and others have been long and hard. Some are ongoing. However, 80 per cent. of the total is not a small matter.
Mr. Kevan Jones: Would my hon. Friend like to comment on a letter that I received this morning from Fiona Woolf, the president of the Law Society, following my Adjournment debate in Westminster Hall the week before last? The final paragraph states:
“However I am determined not to allow all solicitors involved in the miners’ compensation cases to be tarred with the same brush as a result of the mis-deeds of a minority.”
John Mann: When I consider the solicitors in my area, one has to travel a significant distance to find a firm that I have been prepared to recommend to my constituents—or even to ask my constituents to contemplate—on the basis that it will not charge. The vast majority of complaints have come from my hon. Friend the Member for North Durham (Mr. Jones), my right hon. Friend the Member for Rother Valley (Mr. Barron) and me. What that says to me is not that our areas are particularly problem areas, but that the publicity in them has been such as to encourage people to come forward. What is really interesting is that not a single one of the 1,500 of my constituents who complained to me had any idea that they could take forward a complaint process.
Another interesting piece of research is in the Law Society’s records and is waiting to be published. I had to fight some battles to get these questions asked, but the Law Society puts five questions to new complainants and one of them is, “What experience have you had of the legal profession before?” I have seen the answers of my constituents and I can say that the majority, and particularly the elderly, have the perception that people only go to a solicitor if they have been in some problems with the police and require defending. That is their perception—not their experience—of the legal profession. The younger generation have a slightly different perspective because more of them have had experience—not necessarily a pleasant one—of family law courts, for example. As to challenging the high and mighty—whether it be the Government, firms of solicitors or whatever—my constituents do not have much experience of it.
It may not be a term that is fashionable in this House these days, but class is major issue when it comes to access to justice. I find that the upper classes always have a family solicitor and always have had one. The middle classes have a mixed experience, but they know what questions to ask. They sometimes get into difficulties, but they come forward and demand justice, and they have some idea that there may be a complaints procedure to go through. The working classes, from my experience, work on the basis that a solicitor is a man or a woman who can be trusted. It is a bit like with a police officer or perhaps an accountant in some vague notion, but a solicitor is someone who can be trusted.
It seems to me to be rather good for a profession to imbue in people the idea that that profession can be trusted precisely because it is a profession, which is exactly why I break from the general consensus that only my hon. Friend the Member for West Bromwich, West (Mr. Bailey) has really broken with so far. That is why I say that the cosiness with which both Houses seem to want to go forward does not satisfy me or, I believe, the interests of my constituents. Regulation needs to be highly robust precisely because of the important traditional reputation of the legal profession, as people see it and wish to see it. That must be the case.
I commend the recent changes in how the Law Society has handled complaints with its new set-up and new name—though that confuses me, never mind my constituents. What we see is a far more rigorous and robust system in place, which is exactly the direction of travel that is needed. My fear in respect of some of the amendments from the other place is that they appear to rein in that direction of travel.
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