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In Committee, we agreed that we would not say “light touch”, as it is a hackneyed expression that has had its day. I want to concentrate on the need for common sense and a delicate, pragmatic and sensitive approach. Of course, we need a Bill that gives the board the power to take necessary decisions, but the approved regulators must be allowed to get on with the job in hand. There must be scope for them to carry out many of the delegated functions. Amendment No. 66 would simply reinforce that point, and when Sir David Clementi produced his excellent report, he certainly anticipated such a delicate, sensitive approach.
Again, the Minister said in Committee that she was sympathetic to amendment No. 66 and that she would return to the issue on Report. So she said that she accepted what we had to say on four amendments and one new clause. She said that she was sympathetic to many of the arguments put forward. I hope that she has listened carefully to what I have said this afternoon and that she can give Opposition Members some comfort in accepting what we say, given that our views are widely endorsed by the professions. Indeed, I hope that, if she cannot accept our amendments and make the changes now, she will at least tell us why she cannot, and perhaps tell us that some further changes may be introduced in other place, although two of the points that I have made might be covered by the Government amendments in this group.
John Mann (Bassetlaw) (Lab): The hon. Member for North-West Norfolk (Mr. Bellingham) is as eloquent and courteous as ever, but he manages yet again to fall into the trap of vested self-interest, despite very honourably declaring his self-interest. We return to a fundamental point that has run throughout the debates on the Bill and well before them: why should the legal profession be allowed special status in society, whereby it can look after itself, by regulating itself and appealing to itself in this case? In which other section of society would we allow that? Would we allow it with the police?
Probably, the only other section of society that tries to befit itself to such self-regulation is politicians, often much to the disgust of the general public. But there is no basis whatsoever for moving to a system whereby the legal profession can appeal to the legal profession. That is precisely what we are talking about. Barristers, whether practising, non-practising, or in the other House or the High Court, or wherever they end up, need to understand that that internalised attempt to set themselves apart from the principles that we expect of the rest of society simply is not acceptable. The reason why it is not acceptable is that it does not work, and the reason why it does not work—doubtless there may be an opportunity for hon. Members to explore this on Third Reading—is the way in which the legal profession uses its privileged position of being able to use the law and take action in an attempt to silence any criticism.
Robert Neill (Bromley and Chislehurst) (Con):
I am interested in what the hon. Gentleman is saying, and we have run over some of it in the past. I will declare my interest as a non-practising member of the Bar and as someone who is very proud of it, because it is a decent and honest profession. Is not the implication of what he is saying that we cannot trust lawyers to appeal by judicial review because we cannot trust the judges?
That is what he is almost saying in effect. Does he honestly think that the justices of Her Majesty’s High Court will behave differently if an applicant for judicial review or another form of appeal happens to be a lawyer as opposed to anything else? If he does, I suggest that that is a scandalous thing to say.
John Mann: It might be scandalous thing to say, but the police have an honourable profession and we do not allow them to sit in judgment on themselves. Doctors and others involved in medicine have an honourable profession, but we do not allow them to sit in judgment on such key decisions. Indeed, we listened earlier today to comments about the roles of trusts and Secretaries of State in the governance of the health service. There are many honourable professions, but there are only two professions that attempt to set themselves above all others. One such group is Members of Parliament, who deem that we are in some way above all others. Some, such as Plaid Cymru Members, would like to put us in the position whereby we are judged by the judiciary rather than through the self-regulatory systems that we have in place. That is an interesting idea, but none of them are in their seats to participate in this debate.
The principle that certain professions should be allowed to sit in judgment on themselves is not one that we would accept in many great and honourable professions in this country. To allow the self-regulators to appeal to their peers in the High Court is total nonsense if we are to have a robust system of regulation that is seen by the rest of the world to be above board.
4.45 pm
Mr. David Heath (Somerton and Frome) (LD): First, I declare a non-interest: I am not a lawyer or in any way a member of the legal profession. I therefore think that I can safely say that I speak without the vested interest to which the hon. Member for Bassetlaw (John Mann) referred.
I echo a remark made by the hon. Member for North-West Norfolk (Mr. Bellingham): having come to the Bill very late, as a result of a change in responsibilities, I am encouraged by the degree of constructive engagement that I have observed in Members on both sides of the House. He did not include the hon. Members for Bassetlaw and for North Durham (Mr. Jones) in his plaudits in that respect, but I am happy to do so, having read the report of the Committee proceedings, which were characterised by a willingness to engage with the issues and to try to arrive at a sensible consensus. I applaud all those who have attempted to do so.
To start with judicial review, I do not entirely buy the point made by the hon. Member for Bassetlaw. Although I am absolutely clear that the regulatory structure for the legal profession must be seen to be independent and robust, only the judiciary can decide whether there has been an error in law. There is no other mechanism to determine an error in law in regulation. Whether or not that undermines the regulatory process in the hon. Gentleman’s eyes, the fact remains that only the judiciary acting in an independent fashion, which is now guaranteed by statute, can make that judgment.
Mr. Kevan Jones: I agree with the hon. Gentleman about judicial review on a point of law, but that is not what the new clause is saying. Essentially, it provides that if the regulatory body does not agree with criticism levelled at it, it can appeal to a higher body. That is very different from the point that he is outlining.
Mr. Heath: With all due respect, I am not sure that that is the case. A judicial review can take place only on the basis of a body having misdirected itself—that would be the basis in administrative law. In any case, the Minister can probably deal with the matter by stating what she believes the position to be on the admissibility or otherwise of an application for judicial review of a decision. It certainly should not be seen as a court of appeal on a decision of the regulator. That would be entirely inappropriate—on that, I agree with the hon. Members for Bassetlaw and for North Durham.
“so far as is reasonably practicable”,
I entirely agree with the hon. Member for North-West Norfolk. It seems to be an entirely unnecessary qualification. If we have good principles of regulation, which the Government have stressed in relation to the regulatory objectives, it is entirely perverse to qualify that by saying that the objectives do not have to be met if circumstances do not allow. The regulatory objectives must be consistent and paramount. I believe that the words should be removed, which is why I have put my name to amendment No. 2. Far from reducing the effectiveness of this part of the Bill, I believe that the amendment would strengthen it.
On conflict of interest, I shall be interested to hear what the Minister has to say on whether the provisions represent a significant change from her understanding of the position. I am not prepared to countenance a conflict of interest arising, but if she is confident that the Bill’s structure and wording is sufficient to deal with the issue, without us adding an explicit statement on conflict of interest, I shall be satisfied. I find it hard to believe that that is the case, however, so I have sympathy with what the hon. Member for North-West Norfolk has to say.
My last point is on proportionality. The hon. Member for North-West Norfolk tabled new clause 2, but I have taken a slightly different approach to the issue in my amendment No. 144. I mention it briefly in the forlorn hope of ensuring a degree of joined-up government as regards statute, and in the hope that one statute that we pass might have some relevance to another. Some hon. Members will recall the Legislative and Regulatory Reform Act 2006, which had a chequered parliamentary career. Many of its provisions were hard-fought-for. It ended up being absolutely filleted in another place, and replaced with something a good deal better. Section 2 of that Act explicitly spelled out the regulatory principles—not the regulatory objectives, which are set out in the Bill before us—that were expected to apply to any regulatory body. It states:
“Those principles are that—
(a) regulatory activities should be carried out in a way which is transparent, accountable, proportionate and consistent;
(b) regulatory activities should be targeted only at cases in which action is needed.”
Those two regulatory principles, which the Government have accepted, and which they wrote in to the 2006 Act, are exactly what is required to qualify the regulatory objectives in the Bill so as to ensure proportionality and transparency, and to ensure that action is taken only when it is needed. The Minister should consider amendment No. 144, or perhaps a variation of it in which the cross-reference to the 2006 Act is removed, and those same regulatory principles inserted instead. That would underline what I believe to be the Government’s objective—to have a consistent principle underlying regulatory activities that applies as much to lawyers as to other professions, and to all other regulatory activities. Members’ objective should be to ensure a consistency of legislation that crosses those professional and interest boundaries. That is exactly the point made by the hon. Member for Bassetlaw, who argues that lawyers should not be a special case. I agree; in both positive and negative terms, the same principles should apply to regulatory activities across the board.
Mr. Kevan Jones: First, may I welcome the hon. Member for Somerton and Frome (Mr. Heath) to his responsibilities? I think that we breathed a collective sigh of relief on seeing that the hon. Member for North Southwark and Bermondsey (Simon Hughes) is not here tonight, and that we might get the entire Bill dealt with this evening.
The Minister has made it clear, as have my hon. Friend the Member for Bassetlaw (John Mann) and I, that putting the consumer at the heart of the Bill is key. Hon. Members might not be surprised to hear that I agree with my hon. Friend when he says that we are talking about an attempt to treat the legal profession differently from any other bodies. The measures that we put in place under the Bill should not amount to less than those that were in place in the old system, in which there was a legal services ombudsman who had tough powers of regulation and who could impose fines. Under that system, there was no right of appeal. The legal services ombudsman conducted a tough investigation on miners’ compensation, and I believe that lawyers would certainly have appealed the report. It was not the fact that it was inaccurate—it was the fact that it was tough and critical of the way in which the legal profession preyed on many of my constituents and other people in receipt of miners’ compensation.
I must disagree with the hon. Member for Somerton and Frome about the grounds for appeal. New clause 2 says that one such reason is the fact that publication would be “manifestly unreasonable or inappropriate”. When the legal services ombudsman produced her report, many lawyers could have argued that its contents were unreasonable or inappropriate. That would be the case for someone on the receiving end of a hard, tough report.
Mr. Heath: In a judicial review, an administrative court would look only at the way in which decisions on the report were arrived at and whether they were reasonable—not at the end result and the conclusions reached in the report.
Mr. Jones: I agree, but that is not what the new clause says. If a legal point is at stake, one can always have recourse to a review. Proposed section (2)(c), however, states that the provision would apply if
“the publication of a statement under section 35 is, or the terms of the statement published or to be published are (or would be), manifestly unreasonable or inappropriate.”
Who is to decide what, in those circumstances, is unreasonable or inappropriate? The consumer would argue, quite rightly, that the legal services ombudsman’s report was far from unreasonable and inappropriate. From their point of view, it was spot on and she was right to stand up for their rights. The breadth of the provision provides the legal profession with a get-out clause, enabling it to escape reasonable criticism. I am reluctant for the ombudsman’s powers under the Bill to be any less than what they were before, so I hope that the Government resist the attempt, which was made numerous times in Committee, to safeguard the vested interests of the legal profession and enable it to protect its own.
Robert Neill: I shall be brief, and shall begin with the point with which the hon. Member for North Durham (Mr. Jones) concluded—the obsession with vested interests among certain Government Members. No one, including all the lawyers I know, wants anything other than effective, robust and strong regulation, which is in the profession’s interests just as much as the consumer’s. It is genuinely sad that some hon. Members cannot get that into their head, although I think that the Minister accepts it. It is sad that our debates are often coloured, dare I say, by an obsession among certain Government Members.
John Mann: As one of those accused of being an obsessive, may I ask the hon. Gentleman what proportion of solicitors dealing with the enormous £3 billion-plus miners’ compensation scheme have been found guilty of double-charging their clients, whether directly or indirectly? What percentage of the money that they have been paid by the Government have they taken? To give him an opportunity to think, is it under 10 per cent., 50 per cent. or 90 per cent.?
Robert Neill: I hope that the hon. Gentleman has the grace to congratulate the Solicitors Regulation Authority on initiating proceedings and recovering considerable amounts of money. To suggest that nothing has been done is unfair. The arrangements are not perfect, I concede and accept—we all want to improve things—but I am sorry that we have to go through this rigmarole.
Robert Neill: I should like to make progress, and I hope to conclude shortly.
The Law Society’s president made it quite clear that the society supports the Bill’s basic principles. All the key issues, including the separation of regulation from the representational role, have been accepted by the Bar Council. It is sensible to operate a system in which the regulator works in partnership with the profession. Nobody takes issue with that. I think the Minister has understood that, which is why I echo the comments of
my hon. Friends and the hon. Member for Somerton and Frome (Mr. Heath), who say that we hope she will be able to flesh out to us how that can be dealt with constructively.
5 pm
The second point that I wanted to make relates to judicial review. With all due respect, nobody should be above the law. The system of judicial review ensures that. That applies to a body such as the legal services board as much as to anyone else. It is only common sense that judicial review should remain. The reference in the amendment to a statement being “manifestly unreasonable” is very close to the well-known Wednesbury test of reasonableness. Many of us think it is not unreasonable to give an opportunity of redress, should there ever be—maybe there never will be—a manifestly perverse decision on the part of any regulatory body.
I hope that that will be borne in mind, just as I hope that when Labour Members question the willingness of the legal profession to tackle issues for itself, they will bear in mind the report from the Bar Standards Board for this year, which was published after our Committee discussions. The board pointed out that not only had there been a significant increase in the number of cases referred to disciplinary tribunals, which have a greater independent element than the summary procedure, but interestingly, although the numbers always remain very small, the proportionate increase in the number of cases where complaints were upheld by the Bar Standards Board, acting independently on behalf of the profession, increased to over 82 per cent. That is better than any prosecuting authority usually achieves. Before people criticise the professions for not being prepared to set their own house in order, they ought to bear that in mind. That indicates that what is sensible is a light touch rather than a heavy-handed one, and an approach that does not seek to second-guess the outcome.
I hope the Minister can deal with my final point. The hon. Member for Somerton and Frome made sensible points about the risk of conflict of interests. Given that we will later consider alternative business structures, as my hon. Friend the Member for North-West Norfolk (Mr. Bellingham) said, we are likely to see more and more instances where there may properly be mixtures of competences in firms, and various Chinese walls. I do not have a problem with a greater number of alternative business structures, but that makes it all the more necessary that the conflict of interest point should be dealt with and spelled out as clearly as possible in the Bill.
The Parliamentary Under-Secretary of State for Justice (Bridget Prentice):
I am pleased to hear the opening remarks from across the House about how we have reached this stage in the Bill as a result of a great deal of healthy discussion and consensus. I said in Committee that before Report I would consider a number of the issues that have been raised again this evening. As I said then with reference to new clause 2, I do not object in principle to the fact that approved regulators should be able to challenge the decisions of the board. It is of huge importance to the accountability of the board that the approved regulators have recourse
to some form of challenge when they feel that the board is being unreasonable. However, I thought that we had established in Committee that the ground for challenge that that creates—that of judicial review—is available automatically under the Bill as it was then. I do not see that new clause 2 adds anything.
On amendment No. 1, there is a real possibility that that would run counter to the best interests of clients and might even cast doubt on the validity of many of the existing rules. Given the role of those broad professional principles, singling out conflict of interest but not being able to define it clearly might risk jeopardising the flexibility of regulators in this area.
Clause 176 already places all authorised persons under a statutory duty to comply with professional rules, which will of course include rules on conflicts of interest, which are clearly stated in the professional bodies’ rules. All those rules will, of course, also be subject to approval by the board; in a sense, there is already a double lock to ensure that rules on conflict of interest are complied with. I am pretty confident that those existing rules provide adequate cover and that the extra provision is not necessary; in fact, it has the potential to be undesirable.
On amendments Nos. 2 and 64, since our discussion of the issue in Committee, I have considered carefully whether
“so far as is reasonably practicable”
should be removed from the duties under clauses 3 and 28. I understand the reasons that the hon. Member for North-West Norfolk (Mr. Bellingham) set out in favour of removal, but I am still not convinced that taking away the phrase is the best way to ensure that the consumer is, as has been mentioned, at the heart of the system. The amendments are neither appropriate nor practical, as under the new framework all regulators will need flexibility to weigh up how each of the objectives will operate in any given situation. The regulators will have to be able to take into account practical considerations—including, for example, the resources available to them. Such issues are key to the principles of proportionate and targeted regulation; I hope that Members on both sides agree that such regulation must be central to the success of the new regime. Retaining
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