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15 Oct 2007 : Column 601

Mr. Kidney: I am grateful to the hon. Gentleman for that intervention, because I have in front of me the briefings from those bodies, each of which says that it supports the Government amendment. I do not know about their motivations and how strongly they feel about supporting the Government, but they say in writing that they support the provision; only Opposition Members say that they do not support the provision.

The other suggestion that the hon. Gentleman mentioned is one that I made in a meeting with the Minister, and it relates to confirmation hearings for the chair of the board. If that suggestion becomes adopted practice, it might provide some comfort to the Opposition, because the representation of the public interest in such appointments should lie with Parliament, which represents the people of this country.

I served on the Treasury Committee in the 1997 to 2001 Parliament, when we introduced confirmation hearings for the members of the Monetary Policy Committee. Admittedly, that is a non-statutory arrangement, which is not binding on the Treasury. Nevertheless, that process has survived to this day. I was interested in the Prime Minister’s statement on constitutional change, when he expressed his interest in confirmation hearings. We could reach a stage where confirmation hearings are binding and statutory. They could reassure some hon. Members about their fear that appointments made by the Lord Chancellor, after consultation with the Lord Chief Justice, would not show sufficient independence. I should like the House to put down a marker today, so that if we set up confirmation hearings, one of the posts that should be subject to them is the chair of the legal services board.

Bridget Prentice: I shall be very brief, because it is clear where the House agrees and disagrees on these issues.

On confirmation hearings, I accept what my hon. Friend the Member for Stafford (Mr. Kidney) has said. The hon. Member for Huntingdon (Mr. Djanogly) raised the issue, which is receiving consideration elsewhere in the Government. Given what has been said tonight, the appointment of the chair of the legal services board might well be appropriate for a confirmation hearing. Of course, it is also possible for a Select Committee to scrutinise the appointment. We said that in our response to the Joint Committee.

Mr. Djanogly: With this issue going back to the Lords in the very near future and there not being much time, an early indication from the Government on confirmation hearings would be helpful.

Bridget Prentice: I can tell the House that, between now and the Bill going to the Lords, I will do my best to speak to my colleagues to find out whether we can discuss further the possibility of that type of appointment.

On Government amendment No. 80, it is important that removals are made in accordance and consistent with the terms and conditions of appointment. It is under those conditions that the board, with the approval of the Lord Chancellor, can remove members of the consumer panel. The Bill makes no express provision in that respect, because it is for the board to decide, but if we are to require the Lord Chancellor’s
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approval for appointments, it follows that we also need his approval for removals. We needed to put that in the Bill to cover the period of appointment.

It is normal practice for appointments to bodies such as the consumer panel to be for fixed periods. The amendments allow members to be reappointed, or to be removed either because the board chooses not to reappoint them or because it actively removes a member in accordance with those terms and conditions.

The hon. Member for Somerton and Frome (Mr. Heath) rightly mentioned narrow sectional interests, but it seems to me that his arguments—saying that it would be right to have a lay chair, but then supporting the concurrence of the Lord Chancellor—are entirely contradictory. Incidentally, I understand that there is no legal difference between approval and concurrence, so he will be pleased to know that his amendment would have been just as appropriate in that respect. However, if he agrees with us that consumer confidence requires that the chair always be a layperson, he must see that the logic of that would be undermined by requiring the agreement of the Lord Chancellor to the appointment.

Mr. Heath: That would be the case only if the Lord Chief Justice was seen simply as a representative of the legal profession, rather than as the head of the judiciary. I make a clear distinction between the two. If it were suggested that the appointment would need the concurrence of someone from the Law Society or the Bar Council, rather than the concurrence of the Lord Chief Justice, the Minister’s point would have a strong degree of validity.

Bridget Prentice: I have just been reminded that I keep saying “the Lord Chancellor” instead of “the Lord Chief Justice”. I hope that that will be corrected in Hansard.

I had hoped that we had reached the point where we all agree that the consumer is at the heart of the Bill. It is important for the consumer to believe that there is no bias, but, inevitably, the Lord Chief Justice is an ex-lawyer who has at one time or another been a member of the Bar Council or the Law Society. The hon. Gentleman talked about perception, but the consumer would perceive the Lord Chief Justice to be a reflection of the legal profession. That is why concurrence is not appropriate.

Mr. Kevan Jones: Does my hon. Friend agree that, as my hon. Friend the Member for Bassetlaw (John Mann) said, the way to look at the matter is through the prism of the consumer?

If he were still with us, Mr. Sheppard would see no difference between the Lord Chief Justice and any other lawyer or person connected with the legal profession; he would see his involvement as the legal profession having a say in the appointment. Is it not important that laypeople such as Mr. Sheppard, who are both consumers and the victims of the legal professions, understand that the appointment is independent of that profession?

Bridget Prentice: My hon. Friend, as always, makes the case eloquently. We will have to agree to disagree on this matter, and the House will divide on the amendment.

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Mr. Djanogly: The Minister says, rightly, that we disagree. However, if we are to go down the consultation route, will she give the House some idea how the plans for consultation will be fleshed out? The Bill is shortly to return to the other place; I know that their lordships will want the meaning of consultation to be fleshed out. Will she do that before the Bill goes back to the other place?

Bridget Prentice: I have already engaged in correspondence with the Lord Chief Justice and in discussions on how consultation would take place. I shall try to ensure that that information is made available to both Houses before the debate continues in the other place.

To make a final point to Conservative Members on why they might want to rethink their approach to having a lay chair, I explained to the Lord Chancellor that our amendment would ensure that, whatever he may intend to do after he leaves Parliament, the one thing that he will not do is chair the legal services board. The amendment will ensure that neither he nor any other eminent politician and lawyer will be able to do so. He agrees that that is quite right.

Amendment agreed to.

Amendments made: No. 79, page 4, line 25, leave out ‘on terms and conditions’ and insert

No. 80, page 4, line 27, at end insert—

‘( ) But a person may be removed from office in accordance with those terms and conditions only with the approval of the Lord Chancellor.

( ) A person who ceases to be chairman or another member of the Consumer Panel may be re-appointed.’.— [Bridget Prentice.]

Clause 15

Carrying on of a reserved legal activity: employers and employees etc

John Hemming: I beg to move amendment No. 152, in page 7, line 13, at end insert—

‘(3A) Where “B” is an organisation whose members are carrying on a particular trade or profession for the purposes of which that organisation exists, the provision of relevant services to members for no charge (or by providing an indemnity in respect of unrecovered costs) shall not constitute the provision of relevant services to the public or a section of the public.’.

Madam Deputy Speaker (Sylvia Heal): With this it will be convenient to discuss the following amendments: No. 35, in page 7, line 20, leave out subsection (6).

No. 36, in page 7, line 25, leave out ‘Subject to that’.

No. 37, in clause 23, page 12, line 12, leave out ‘an independent’ and insert ‘a’.

No. 39, in clause 105, page 57, line 24, leave out ‘an independent’ and insert ‘a’.

No. 40, page 57, line 26, leave out ‘an independent’ and insert ‘a’.

No. 41, in clause 106, page 57, line 29, leave out ‘an independent’ and insert ‘a’.

No. 38, in schedule 12, page 189, line 42, leave out ‘an independent’ and insert ‘a’.

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No. 42, in clause 207, page 117, line 9, leave out from ‘“independent’ to ‘Act);’ in line 11.

No. 43, page 117, line 26, leave out ‘an independent’ and insert ‘a’.

No. 44, page 117, line 40, at end insert

No. 45, in schedule 23, page 383, leave out line 21.

No. 46, page 385, line 10, at end insert

John Hemming: The hon. Member for Bassetlaw (John Mann) has made some valid points about the need for regulation and eloquently explained how it is possible for professionals to work against the interests of their clients. Hon. Members will be well aware of my interest in what happens in the family division. There, for anyone other than the individual concerned or a lawyer to report bad behaviour to the regulators is contempt of court, which means that there is a lot more bad behaviour.

The question is: how far should regulation go? Historically, many organisations and corporate entities have employed solicitors—for example, trade unions, the Medical Protection Society and city councils. What sort of regulation is appropriate in those circumstances? One of the difficulties the trade unions face is that the day-to-day activity of a trade union convenor representing their members in a workplace is often a negotiation, and if the trade union had to regulate itself as an alternative business structure, ordinary day-to-day trade union activity might be regulated in the same way as legal activity. That would obviously be completely wrong. To that extent, the Government’s approach of aiming to exempt trade unions from much of the regulatory process is sensible.

However, other organisations—mutual organisations that are not trade unions, such as the Medical Protection Society—could also be trapped by the ABS regulations. I accept that the drafting of my amendment may not be the only way to crack this nut; perhaps in another place the nut will have to be cracked in a more subtle manner. However, in completely rewriting the regulation of the legal profession as we are doing, we should not, through over-regulation, trample on some of the mutual organisations that do a good job for their members.

Amendment No. 152 considers the issue from the point of view of mutual organisations that are not trade unions. I do not say that the amendment is necessarily the best way of going about the matter, but the issue needs to be resolved. It is important to introduce adequate regulation and to make sure that we protect the interests of people who deal with the legal profession.

6.30 pm

The issue particularly affects situations in which someone employs a firm of lawyers to act for them. Of course, the fact that the Legal Services Commission is paying for things presents a challenge; there is the question of whether that means that people do not act as well as they would if clients paid them directly. The case of mutual organisations that employ in-house
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lawyers does not really fit in with that; such lawyers should and will be regulated. There is the argument that one should limit what is done by the mutual organisation—in other words, if we give exemptions to mutual organisations or trade unions, we should limit that exemption, so that trade unions and mutual bodies cannot suddenly set up as conveyancing operations and benefit from the exemptions. There is an argument for that, but I think that we are generating a sledgehammer to crack nuts, and in the case of some of the mutual organisations, there are no nuts to be cracked. The amendment aims to be a way forward for dealing with that issue.

Mr. Djanogly: I shall speak to amendment No. 35 and other amendments in my name and the names of my hon. Friends on the position of trade unions under the Bill. The purpose of amendments Nos. 35 and 36 is to reverse the trade unions’ extremely wide-ranging exemption from the regulatory requirements under the alternative business structure regime of part 5. The exemption, which the Government shuffled in at the last minute in Committee, would mean that trade unions were not subject to any form of regulation under the Bill. Given that the benefit of the consumer has been touted as a key objective of the Bill throughout its stages, I cannot understand why the Government are now prepared to exclude unions from the regulatory framework and subject trade union members to a greater likelihood of receiving poor legal services from providers who are not accountable. Do the Government really think so little of union members that they will allow them to accept legal services of a lower quality than those that non-members would enjoy? It has been clearly highlighted that the behaviour of some trade unions has been wholly unacceptable—for example, in relation to miners’ compensation schemes.

Mr. Kevan Jones: Will the hon. Gentleman give way?

Mr. Djanogly: The hon. Gentleman will have his chance to speak. I ask him to let me make my case. The Minister was happy to accept that the behaviour of some trade unions was appalling, but she also states that the purpose of the exemption is to maintain the status quo with regard to the unions. We will not accept such a weak position. We are here to improve things for the consumer, and not simply to maintain the status quo. Perhaps she should think a little more about union members and a little less about union bosses.

I should like to repeat the Solicitors Regulation Authority’s opinion on the trade union exemption. It asks hon. Members to reject the original Government amendment, which it says

The SRA goes on to say that it is

In a memorandum of 10 October this year, the SRA again highlighted its concerns about the trade union exemption.

I foresee that attempts will be made to defend the Government amendments by stating that if the unions were to provide reserved legal services to the public rather than to members, advice given by lay officials would have to fall within the alternative business structure licensing regime. The SRA’s view, which I quoted, is that members deserve the same protection as any other consumers of legal services. Even if one accepted, for some reason, that trade union members did not deserve such protection, the question of what constitutes a member is open for interpretation. I would like to express our extreme uneasiness about who could be considered a member of a union, and who would therefore not be classed as a protected member of the public.

In a letter to me of 21 June this year, the Minister helpfully clarified her position on the union exemption. She wrote that in Committee

It is astounding that it will be up to the unions to determine who is classed as a member, and therefore to whom they can extend reserved legal activities without needing to be licensed under part 5. That clearly creates the possibility of unions bringing in associate members and providing a poor service to them, as happened in many of the miners’ compensation cases. The Minister went on to highlight the weakness of the position under the amendments that the Government proposed in Committee:

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