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“the consumer has the right to demand that Government intervene”.—[ Official Report, House of Lords, 6 December 2006; Vol. 687, c. 1192.]
That is where we are. The Government are intervening, and although the legal profession might not like it, it has, as I have said, brought this upon itself. We have a duty to protect our weak and vulnerable citizens. That is one of the reasons why I went into politics, and one reason why I became a trade union officer was to protect the vulnerable at work.
We have also witnessed the use of a back-door argument. It has been suggested that the Bar should somehow be exempt, or be left to self-regulate. The issue is whether the Bar should be brought under the remit of the Bill, and all the arguments that we have heard today from barristers in this place were rehashes of those used in the other place. I do not agree with the idea of taking the Bar out of the system. We need a system that enables people to know where to go to make a complaint—be it about a solicitor or a barrister—and it should be dealt with, and seen to be dealt with, independently of the legal profession. A few weeks ago I had to deal with a complaint to the legal services body which, unusually, was about not miners’ compensation but a divorce case. It was clear that the lady in question had been given very bad service by the local firm of solicitors, who had employed barristers who did not need to be employed. She wanted one point of contact, which is an important issue. Trying to separate the points of contact into two is not acceptable.
Robert Neill: I am not unsympathetic to all the points that the hon. Gentleman is making, but for the sake of fairness, will he concede that part 6 of the Bill does not seek to take the Bar out of the system, but to give some flexibility to the office for legal complaints? If the OCL is satisfied that the Bar, which attracts only some 3 per cent. of complaints, has a robust system of its own that works satisfactorily—both the Government and the legal services ombudsman, in whom the hon. Gentleman sets considerable store, repeatedly say that it does—dealing with such complaints could be delegated to those approved regulators. That is not exempting the Bar from the system, but trying to make it work sensibly.
Mr. Jones: That is a good try, and if I were attempting to protect my own profession, I too would probably try any last-ditch method that I could find. The situation was summed up well in the Lords debate by Lord Whitty, when he disagreed with his noble Friend Lord Borrie. On delegation back to the Bar Council, he said:
“Even though I recognise that its past performance has been somewhat better than that of the Law Society, I think that we are then back into the judge and jury territory.”—[ Official Report, House of Lords, 6 December 2006; Vol. 687, c. 1193.]
That is the point. The Bar cannot act as judge and jury, just as the Law Society has not managed that to date, and the Bill will help to increase the standing of the complaints that go before it. I do not agree with the argument of the hon. Member for Bromley and Chislehurst (Robert Neill).
A lot of rubbish has been spoken today about how the Bill is somehow an attack on the independence of the law. That is absolute nonsense. Currently, the legal services ombudsman is appointed directly by the Lord Chancellor, with no remit from any outside body. The hon. Member for North-West Cambridgeshire (Mr. Vara) dismissed that as irrelevant, but it is very relevant. As I said earlier, it is important that the proposed board be seen to be totally independent from any form of legal intervention. I support totally the Nolan commission recommendations in this regard, and I agree with Conservative Front Benchers that the issue should be depoliticised. However, if the board is to have credibility, it should not be tainted in any way by the legal profession.
Mr. Vara: For the record, I am not saying that the appointment of the legal ombudsman is an irrelevance. I am simply saying that for the purposes of this debate, I did not find his arguments particularly relevant.
Mr. Jones: The hon. Gentleman said in his earlier contribution that the proposal was somehow an attack on the fundamental independence of the law, and he refused to answer the question that my hon. Friend the Member for Bassetlaw and I put to him in that regard. The current body has a lot more powers—to fine, for example—than the legal services board will have, and the ombudsman is appointed by the Lord Chancellor, not the Lord Chief Justice. I am clear that the board must be independent, and be seen to be independent, if it is to have the credibility and teeth that it needs.
I would like to make one or two other points about the detail of the Bill. I want the legal services board to have more teeth, in terms of the fines that it can impose on solicitors firms. The figure proposed in the Bill is £20,000, but that is nowhere near enough, and I shall give an example that shows why. A woman, whom I shall call Mrs. X, from Stanley in my constituency, came to see me before Christmas. She had the misfortune of having gone to the law firm Mark Gilbert Morse. She was pursuing a miners’ compensation case on behalf of her husband, and Mark Gilbert Morse was given a settlement figure of £42,000 for that case by the Department of Trade and Industry. The solicitors rejected it on her behalf, without even telling her. Lo and behold, some six months later they came back with an offer of some £23,000.
Under the Bill, the maximum compensation figure for that case would be £20,000. Here, I give credit to the Legal Complaints Service. Thanks to the shame that was felt, and how appalled the service was by this case, Mark Gilbert Morse paid the £42,000 that had originally been offered. If the new body is to have teeth, as my hon. Friend the Member for Bassetlaw said, it must be able to hit solicitors where it hurts—in the monetary award.
Another issue that I am concerned about, and which needs to be examined, is the idea of forcing claimants to pay costs for frivolous and vexatious cases. This is a
complete red herring, and I resist at all points the idea that anyone should be discouraged from bringing a case forward for fear of a compensation award against them. The hon. Member for North Southwark and Bermondsey said that that would not happen. Unfortunately, it does happen, and people will not come forward if they feel that costs will be awarded against them. In my experience, even the most brazen solicitors who have been taking money left, right and centre will use every means possible to frighten victims into withdrawing their complaint. To judge by my experience to date of the Legal Complaints Service, any complaint that is clearly frivolous and vexatious never gets off the ground. It is for the service to fillet out cases in which there is no case to answer, and that should not involve a threat against the individuals involved, because that would act as a disincentive to their coming forward.
The miners’ compensation cases show that, as even the Legal Complaints Service recognises, we have merely touched the tip of the iceberg of this issue. Many people simply do not know that they have a complaint. They are in awe of solicitors. They sign a piece of paper, and having done so, they think that they are legally obliged to pay the amount in question. As a result, they are not coming forward with complaints.
John Mann: Does my hon. Friend not find that, invariably, the solicitors write to the individual saying that they have to pay because they have signed the paper—as if that were a legal document in itself?
Mr. Jones: They certainly do. Watson Burton’s defence in Newcastle’s The Journal last week was that it had a “legal obligation” to pass the money over to the other side—P and R Associates. That is part of my earlier point about education: we need education on this subject.
The legal services board must be seen to be independent, and it must be independent from the legal profession. I also welcome the creation of the consumer panel to ensure that the administration of consumer services is properly conducted. It is important that the Minister—in her opening remarks today and in her continuing rhetoric—says that the consumer must be at the heart of the matter. If that upsets the legal profession—tough. From my experience of the way in which it has handled many cases in my constituency, frankly, it does not give a damn. It has created much hardship and heartache for many individuals.
I turn to one final issue: the alternative business model. I welcome it, because I recognise that there are other ways of delivering legal services. However, although I, like my hon. Friend, will not oppose the provision, I think that we should tread very carefully to ensure that we do not maintain the vested interests of the legal profession, about which we have heard tonight. If high street solicitors go out of business—good. In my experience, they provide a second-rate and substandard service, and do not do what the hon. Member for North Southwark and Bermondsey says they do, and refer cases that they are not capable of dealing with. They do not do that; they take those cases on, give the impression that they know what they are talking about, and give people a substandard service.
However, we need to tread very carefully. We do not want the same situation as we had with the growth of claims handlers, with middlemen and spivs setting up organisations that claim to be solicitors when they clearly are not. I emphasise that if we have alternative business models, the individual consumer must be clear about who is legally qualified to give advice. In the cases that my hon. Friend and I have dealt with, claims-handling companies have knocked on people’s doors and rung people up. If we ask people, “Are they solicitors?” they say, “Yes, they are.” But if we look at their literature, does it say that they are solicitors? No, it does not. They use language that suggests that they could be legally qualified, when most of them are not. In the worst case that I have come across, their previous company sold double glazing.
With that caveat, if the alternative business model is properly set up, with organisations that my hon. Friend the Member for West Bromwich, West mentioned, such as the Co-op and others, it could provide added service to the consumer. However, we must tread carefully to ensure that it is clear to the consumer who is, and who is not, legally qualified to give advice.
I shall finish where I started, and say that I welcome the Bill. It is a great move forward in trying to give legal protection to some of the most vulnerable people in our society. The Law Society has blown hot and cold on the issue, however. I read the Hansard report of the evidence from the other place, in which Fiona Wolfe said that the Bill had been much improved, but it has not; it has been filleted. This is where the Law Society needs to come clean and say that the miners’ compensation scheme has clearly demonstrated that huge numbers of its members have taken advantage of the poor and weak in society—but in many cases, the Law Society has stood by and done very little.
As my hon. Friend the Member for Bassetlaw has argued, the Law Society should argue for more robust controls over those rogue solicitors—the rotten apples in the barrel. Unfortunately, there are far too many, and I do not accept Fiona Wolfe’s point that only a minority have become involved in the feeding frenzy. If the society did that, it would be doing a service to the consumer, and to its genuine members. Its attempts to weaken the Bill by lobbying in the other place for its vested interests has not brought it any credit.
Like my hon. Friend, I offer my services in Committee. I do not know whether I shall be chosen, but I would certainly enjoy some of the exchanges. I would also table some amendments that would not only improve the Bill, but make it more effective at protecting the weak and vulnerable who need to be protected from certain sections of the legal profession.
7.54 pm
Mr. Mike Weir (Angus) (SNP):
I start by declaring my interest. I am a non-practising solicitor, although a Scottish solicitor, and a member of the Law Society of Scotland. It is many years since I have set foot in a court, and I hope that it will be many years before I have to do so again. Although the Bill is primarily concerned with England and Wales, two matters impact on Scotland, and it is to those that I confine my brief contribution. I shall not touch on the regulation of solicitors, because we have a separate system in
Scotland, and I gently remind the hon. Member for North-West Cambridgeshire (Mr. Vara), who talked about a UK legal system, that there is no such thing. There are three separate legal systems within the United Kingdom.
The first point of concern is the proposals in part 5 to allow for the creation of alternative business structures. Much has been said about alternative ways of delivering legal services, but in effect, the Bill will allow multi-disciplinary partnerships to be formed, as the hon. Gentleman said. There has been a strong debate about that in Scotland, and from what I understand, in England for many years, and although the Bill affects only England and Wales, there is great concern in Scotland and other jurisdictions about the way in which the territoriality will be contained, because such entities are not allowed under the law of Scotland. There is a fair amount of cross-border activity between law firms and tie-ups between Scottish and English law firms. Some Scottish firms operate in England and some English firms operate in Scotland. Indeed, I am told that there are about 600 Scots lawyers working in London alone, many of them for the type of firms that are likely to be attracted to the alternative business structures. That does not include retired solicitors acting as MPs.
There is nothing unusual about that situation, as many of the large commercial firms, especially in London, operate in many other jurisdictions. Liberalisation of services has been touched upon, and it is one of the sticking points in the current Doha discussions. Those Members who sit on the Trade and Industry Committee will recall receiving evidence on the issue from one large firm of commercial solicitors in London about our reports on trade with India and with the Mercosur nations of South America. It is conceivable therefore that such a practice established in London could in fact operate in several different jurisdictions.
I am neutral on the question of multidisciplinary practices. The Front-Bench spokesmen from the Conservative and Liberal parties both rightly raised concerns about their local effect, but my concerns are about their cross-border implications. The Law Society of Scotland has raised concerns that the licensing provisions in clauses 71 to 111 and the relevant schedules are only framework provisions and that they lack detail.
There are concerns about the way in which the new business structures will be licensed, and in particular about the way in which they comply with the law, professional rules and statutory and non-statutory provisions that apply outside England and Wales. That is important, because many people working in those large firms are regulated by others. They could, for example, be subject even within the UK to the professional regulation of the Faculty of Advocates, the General Council of the Bar of Northern Ireland, the Law Society of Scotland or the Law Society of Northern Ireland. It is important that any non-authorised person who manages such a firm does not act in such a way as to cause professional difficulty to
such employees. That detail—the way in which the measures will apply to those new entities—must be teased out
Indeed, much more prosaic concerns could arise. If, for example, a multidisciplinary partnership includes solicitors, advocates or barristers, architects and surveyors, how will the various professional organisations fit into the structure of the legal services board in dealing with the other non-lawyer members? In Scotland, and I am sure in England, solicitors firms have to pay into a guarantee fund that pays out should a member be found to have had their fingers in the till—to put it succinctly. Firms also have their own professional indemnity insurance. How would such a fund come into play in the event of a non-solicitor member of a multidisciplinary practice default? Would it work in the same way?
Mr. Heald: I am following what the hon. Gentleman says. Will he tell us whether the Scottish National party, which now forms the minority Administration in Scotland, has any proposals on the overarching regulation of the legal profession in Scotland, or on any of the other points that he is discussing, which might interact with what the Government propose?
Mr. Weir: I shall come to that. The Legal Profession and Legal Aid (Scotland) Act 2007 that was passed earlier this year, and the Bill, touch on that point, but multidisciplinary partnerships are a new concept. There has been much discussion about the idea in Scotland, but the debate has not moved forward. Scottish law firms are expanding overseas in the same way as English legal firms. Unlike English common law, Scots law is based on the Roman law, so it is well placed to expand into continental systems that are also based on Roman law. I am sure that as Scotland prospers under the new SNP Administration, many more firms will take up the advantages of expanding into Europe, as Scotland takes a much greater interest in Europe without having to come to it through the UK.
When the Bill was debated in another place, an amendment was proposed that would have provided for those new entities to be monitored in the first few years of their existence. When the Minister introduced the debate, we discussed whether the provision is a sunrise or sunset clause, or something in between. The hon. Member for Stafford (Mr. Kidney) made a good point when he said that those organisations should be monitored in their first few years of existence to see how they prosper. I suspect that they are coming and that they will spread to other jurisdictions, and we need to have some information on them.
I appreciate that the Minister might not be able to respond to these matters in detail in her winding up, but I shall raise some of my concerns so that they can be given some other consideration. The Bill includes two clauses—196 and 197—and two schedules that will have a direct impact in Scotland. They make changes to the system of regulating Scottish practitioners in reserved areas such as financial services and immigration and asylum cases. I have no great points to make about them, as they come under the Legal Profession and Legal Aid (Scotland) Act 2007, but I note that those measures make several repeals of provisions in both the 2007 Act and the Solicitors
(Scotland) Act 1980. Will those repeals require the consent of the Scottish Parliament? If so, has such agreement been sought and obtained?
8.2 pm
Mr. Jonathan Djanogly (Huntingdon) (Con): This has been an interesting, albeit sometimes technical, debate on a matter that is certainly of constitutional importance. All hon. Members have made thoughtful contributions and, although there are significant differences in detail, the Bill has generally been welcomed by everyone who has spoken.
The report that Sir David Clementi produced on legal services was a visionary one, and we recognise, as do many hon. Members, that the Bill has come a long way since it was first introduced. I pay tribute both to the Joint Committee’s work and its comprehensive review, and not least to its Chairman, Lord Hunt, as well as to the input of my hon. Friend the Member for Enfield, Southgate (Mr. Burrowes), who made a significant contribution to today’s debate. In many ways, they moved the Bill back to the original Clementi vision. That was even before it went to the other place, where it was substantially improved by Conservative, Liberal Democrat and Cross-Bencher Lords, led frequently by my noble Friend Lord Kingsland.
We believe that the Bill is now pretty much there, and are not pleased, therefore, to hear from the Under-Secretary of State for Justice, the hon. Member for Lewisham, East (Bridget Prentice), how most of the improvements are to be reversed by the Government in Committee. The Minister and the hon. Members for Stafford (Mr. Kidney), for Bassetlaw (John Mann) and for North Durham (Mr. Jones) described the changing mechanical, technical and cultural issues that led to the need for the Bill. There is certainly no complacency among the Opposition about the need to improve legal services, not least given the polls saying that no more than 44 per cent. of consumers have a favourable opinion of lawyers, the evidence on miners’ compensation given by the hon. Member for Bassetlaw and the current regulatory framework, which includes some 22 different regulators.
The Lord Chancellor identified the lack of consumer confidence in the way in which lawyers are regulated, and highlighted the potentially restrictive way in which the legal profession operates and how to enhance competition in the profession. He then spoke of the regulatory maze that baffles consumers and thwarts effective oversight and which even Sir David Clementi’s report agreed was flawed. I shall examine each of those issues in the context of our debate, keeping in mind the fact that lawyers play an extremely important role as a thriving, independent profession in the life and economy of our nation, and we need an appropriate and modern regulator system that reflects that.
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