 House of Commons |
Session 2006 - 07 Publications on the internet General Committee Debates Legal Services Bill [Lords] |
Legal Services Bill [Lords] |
The Committee consisted of the following Members:Hannah
Weston, John Benger, Committee
Clerks
†
attended the Committee
Public Bill CommitteeTuesday 12 June 2007(Morning)[Frank Cook in the Chair]Legal Services Bill [Lords]10.30
am
The
Chairman:
I remind the Committee that copies of the money
and ways and means resolutions in connection with the measure are
available in the Room. I also remind hon. Members that adequate notice
should be given of amendments. As a general rule, my fellow Chairman
and I do not intend to call starred amendments.
While on the
issue of amendments, hon. Members will already have learnt of the
experimental move to insist on explanation notes for each amendment
that is submitted. It has been stated that the Government should have
no problem with that because they have lots of staff to write the
explanatory notes, as the main Opposition parties probably do. However,
individual hon. Members might require assistance so it was thought
proper to remind the Committee that all hon. Members, not just the
Chairman, will have very well qualified Clerks to assist and to support
them. They are not exactly at their disposal, but they are here to
help.
We are in
Committee and it is summer time, so hon. Members have the permission of
the Chair to divest themselves of only their outer, upper garments if
circumstances require them to do that. We should like them to preserve
comfort and be able to discuss matters with
ease.
That—
(1)
the Committee shall (in addition to its first meeting at 10.30 a.m. on
Tuesday (12th June) meet—
(a) at 4.00 p.m. on Tuesday
12th June;
(b) at 9.00
a.m. and 1.00 p.m. on Thursday 14th
June;
(c) at 10.30
a.m. and 4.00 p.m. on Tuesday 19th
June;
(d) at 9.00 a.m.
and 1.00 p.m. on Thursday 21st
June;
(e) at 10.30
a.m. and 4.00 p.m. on Tuesday 26th
June;
(f) at 9.00 a.m.
and 1.00 p.m. on Thursday 28th
June;
(2) the
proceedings shall be taken in the following order: Clauses 1 and 2;
Schedule 1; Clauses 3 to 12; Schedule 2; Clauses 13 to 19; Schedule 3;
Clause 20; Schedule 4; Clauses 21 and 22; Schedule 5; Clauses 23 to 26;
Schedule 6; Clauses 27 to 33; Schedule 7; Clauses 34 to 44; Schedule 8;
Clause 45; Schedule 9; Clauses 46 to 76; Schedule 10; Clauses 77 to 83;
Schedule 11; Clause 84; Schedule 12; Clauses 85 to 89; Schedule 13;
Clauses 90 to 102; Schedule 14; Clauses 103 to 114; Schedule 15;
Clauses 115 to 178; Schedule 16; Clauses 179 to 183; Schedule 17;
Clauses 184 to 187; Schedule 18; Clause 188; Schedule 19; Clause 189 to
196; Schedule 20; Clauses 197 to 215; Schedules 21 to 24; new Clauses
and new Schedules; remaining proceedings on the
Bill;
(3) the
proceedings shall (so far as not previously concluded) be brought to a
conclusion at 4.00 p.m. on Thursday 28th
June.
I welcome you to
the Chair, Mr. Cook. I wish to thank you for attending the
Programming Sub-Committee and for listening to its deliberations. You
will know that the motion was agreed without opposition because,
through my good friend in the
usual channels, the dates and timings were agreed
beforehand. Indeed, you will also know that we have provided for a
substantial amount of time—more than other parties asked
for—to facilitate wider debate on certain areas of the
Bill.
Mr.
Jonathan Djanogly (Huntingdon) (Con): It is a pleasure to
enjoy your chairmanship once again, Mr. Cook. We look
forward to receiving the benefit of your guidance and perhaps
forbearance during the coming weeks. I say “forbearance”
because the hardest issue that we have in respect of the timing of the
Committee and consideration of its programming has been the extent to
which we have to go over issues that were raised in the other place.
That is because, unfortunately, the Government have overturned much of
the good work and most of the amendments that were agreed
there.
Given the size
of the Bill and the enormous knife that the Government intend to take
to it through the amendments presented to us only last Wednesday, we
are concerned that there has only been a week between Second Reading
and Committee. That has severely curtailed the amount of time that we
need to consult properly with interested parties, and has impacted
unnecessarily and unfairly on our ability to do the Bill full justice
in Committee. I can report that that has also been reflected in the
comments made to us by interested parties. Therefore, the timing of
this Committee shows a Government keen to get the Bill done and dusted
before the Labour leadership change, rather than one who want to see
the best Legal Services Act possible. That is unfortunate. However,
having said that and given that we are where we are, I see no point in
opposing the motion.
Mr.
David Burrowes (Enfield, Southgate) (Con): It is a
pleasure to serve under your chairmanship, Mr. Cook. What
better way for me to spend my birthday than to serve on such a
Committee? Indeed, it is becoming something of an annual event, having
served on the Joint Committee on the Draft Legal Services Bill at a
similar time last year. However, I do not want to be looking at and
scrutinising the problems caused by this particular piece of
legislation annually.
I concur with my hon.
Friend’s concerns about the timing. I wish to draw the
Committee’s attention to the conclusions of the Joint Committee
and particularly to the comments in paragraph 73 of its report, which
was concerned about the limited time for pre-legislative scrutiny. It
stated:
“Given
the significant impact of the Bill’s provisions—it is the
first attempt to draw the entire legal services market within one
regulatory framework—and the complexity of some of the issues
involved, we believe that the priority should have been to ensure that
the Committee had sufficient time to scrutinise the draft Bill
effectively.”
Obviously,
given the passage of time, there has been a lot of scrutiny in the
other place. However, the report goes on to
state:
“It is
in the interests of both the executive and the legislature that the
provisions of the Bill are
right.”
Given the short
time since the Bill was discussed on Second Reading, the timetable to
scrutinise the unsurprising number of amendments is a matter of
concern. After all, the Bill proposes a significant change to the
profession and involves the concerns of consumers and the wider public
interest. We need
proper time to get the Bill right to ensure that we are not returning in
a year’s time to deal with problems arising from the
legislation.
John
Mann (Bassetlaw) (Lab): Mr. Cook, may I welcome
you to the Chair? The timing could also be affected if the principles
of the Nolan Committee are ruthlessly enforced, debarring members of
the Bar Council or the Law Society or anyone who is a legal executive
from moving a specific amendment or participating in a vote that
specifically impacts on their organisation. I do not ask for a rule at
this stage. I ask for the matter to be considered by your good self,
Mr. Cook, and your co-Chair.
There is a
precedent for that. On two occasions, members on a Committee
considering transport matters were asked to leave and not to
participate. That is not my interpretation of the Nolan guidance, but
it is one that has been used in the past. It is important that there is
clarity in respect of legislation going through the House, because some
of the amendments that are being moved are specifically related to
professional bodies. If an individual is a member of a professional
body—for example, the Bar Council—they could directly
benefit from the consequences of that amendment.
The issue for contemplation is
whether we interpret the Nolan principles as requiring merely that one
declares one’s interest and then fully participates, which I
would be totally happy with as a principle, although that impacts on
other Bills as well, or we debar that ability to initiate legislation,
which has been defined in the past as moving and voting on specific
amendments on a Bill
The
Chairman:
I thank the hon. Gentleman for his comments,
which displayed the characteristically perspicacious attitude that he
applies to everything that he comes across. I must point out, however,
that the question of Members’ interests is a matter for Members
and the registrar—it is not a matter for the Chairman to rule on
specifically. The House has rules relating to the registration of the
relevant interests of Members, and if anyone is in any doubt, they
should consult the registrar rather than the Chairman of the Committee.
I have treated the matter more or less as a point of order, which is
quite unusual, but it is on the record and I am happy about
that.
Simon
Hughes (North Southwark and Bermondsey) (LD): I welcome
you to the Chair, Mr. Cook, and I am happy to serve under
your chairmanship. For the avoidance of doubt about interests—we
may as well deal with the matter at the beginning—I am a
barrister and a member of chambers in the inner temple, although I do
not practise, and have not for the long time that I have been in this
place.
I support the
Programming Sub-Committee’s decision; indeed, I participated in
making it. It has taken a balanced view, especially in the light of the
fact that, as we all know, the reality is that the second sittings on
Tuesdays and Thursdays are open-ended, and we are therefore able to
adjust the amount of time to accommodate the work load and progress. It
means that we have three weeks, two days a week and two sittings a day,
which should mean that we have the opportunity to deal with
everything.
The Government
amendments that will reverse the seven major changes made in the Lords
were not unexpected—they were highlighted on Second Reading.
Other amendments are consequential. If the Minister tables many more,
the Liberal Democrats might protest, but we will leave such decisions
until later.
There are two
other matters that are worth registering. First, the pilot scheme for
having explanations of amendments is valuable. It will help those who
follow our proceedings and who have an interest in understanding what
is happening, and those in the Government’s service when they
consider Opposition amendments. It might also help us to understand the
amendments that we debate. It would not be the first time that some of
us have been in a Committee in which the intention of amendments eludes
pretty well everybody, including, sometimes, the people who tabled
them. The explanations might therefore reduce the number of amendments
that have no great purpose.
Secondly, as I said to the
Government Whip, my preference is for two weekends between Second
Reading and Committee. I think that that is best practice, although I
was not over-excited about that on this occasion. This is a large Bill.
The bigger the Bill, the more reason for having the two weekends. If we
have a timetable by which we are governed until the end of June, it is
imperative with such a large Bill to have two weekends between the end
of Committee and Report and Third Reading.
All of us and those who help us
will have to do a lot of work in the next three weeks if we are to do
justice to the Joint Committee on the Draft Legal Services Bill, on
which my hon. Friend the Member for Birmingham, Yardley and others
served. We need to do justice to the Lords who have done a fantastic
amount of work. I am glad that the Bill started there and not here,
because it has taken some of the burden off us. But to do justice to
everyone with an interest in the Bill, we will need to give proper time
to it and to use the opportunity provided by the flexibility of the
evening sittings and the time after Committee to deliberate so that
amendments can be tabled for Report.
John
Hemming (Birmingham, Yardley) (LD): I agree with my hon.
Friend that there is merit in the timetable for the Committee,
especially given that debates can be extended on certain days. The only
interest that I should declare—I am not in any sense a qualified
lawyer—is that I sat on the Joint Committee on the Draft Legal
Services Bill. That Committee was concerned that there would not be
sufficient time to look at what perhaps are important constitutional
changes that might reduce the independence of the legal system.
Clearly, the Government have a drive to do that—their attempts
to remove the Lords amendments are symptomatic of it. Although I accept
the merits of timetabling and the circumstances, there is no conflict
with the fact that it would have been better to have a longer period
for pre-legislative scrutiny.
Question put and agreed
to.
Motion
made
,
and Question
proposed,
That,
subject to the discretion of the Chairman, any written evidence
received by the Committee shall be reported to the House for
publication.—[Bridget
Prentice.]
Simon
Hughes:
I just want to say that this is a welcome
innovation. This is not the first Bill where these arrangements have
existed—I have sat on other Committees dealing with such
matters—but it is a good way of ensuring that evidence received
by Committee is in the public domain.
Question put and agreed
to.
Clause 1The
regulatory
objectives
10.45
am
Mr.
Djanogly:
I beg to move amendment No. 217, in
clause 1, page 1, line 10, after
‘(e)’ insert ‘subject to objectives (a) to
(d),’.
I
declare my interest as a solicitor and member of the Law Society.
Before I start, may I mirror the comments of the hon. Member for North
Southwark and Bermondsey about the new amendment notes? We, too,
believe that those are a good idea and innovation and we are grateful
to the Clerks for their guidance on how they should be put into
practice.
In welcoming
my hon. Friends and other hon. Members to the Committee, I would like
to make a few brief remarks at the start, because some context is
justified, considering how many reports, conducted by so many people,
have preceded this Committee. The original Office of Fair Trading
report was followed by the visionary Clementi report, then by a White
Paper, an excellent report from the Joint Committee on the Draft Legal
Services Bill, on which my hon. Friend the Member for Enfield,
Southgate served, and a thorough review in the other place, which in
many ways moved the Bill back to the original Clementi vision, to the
satisfaction of my hon. Friends and myself. We now have a rather
long-debated
Bill.
John
Mann:
Within that lengthy and detailed deliberation, what
percentage of time was given over to those who do not have a direct,
professional interest in the
Bill?
At
each stage before the Bill came to the House of Commons, it has been
moved forwards and refined, whether by the Joint Committee, the
Government or the Opposition, and it is in pretty good shape. However,
the core Government amendments will regress the Bill. Most of the key
Government amendments are wrecking ones, which is an unfortunate state
of affairs affecting important issues of principle, some of which are
of constitutional
importance.
Let me
move on to part 1, which contains the key clause dealing with the
regulatory objectives of the Bill, and amendment No. 217, which is a
probing amendment. We are proposing that the following words be
inserted into clause
1(1)(e):
“subject to
objectives (a) to
(d)”.
That would ensure
that the objective of promoting competition is expressly subordinate to
the objectives of protecting and promoting the public interest, thereby
supporting the constitutional principle of the rule of law, improving
access to justice and protecting and promoting the interests of
consumers.
Clause 1 sets out the eight
regulatory objectives that the Legal Services Board, the approved
regulators, and the Office for Legal Complaints will be under a duty to
observe when exercising their functions. The Bill does not rank those
objectives in order of importance. Although we agree that the
regulatory objectives are all-important to the Bill, some are more
significant than others:
namely,
“protecting and
promoting the public interest...supporting the constitutional
principle of the rule of law...improving access to
justice”
and
“protecting
and promoting the interests of
consumers”.
Those four
objectives are the core aims of the Bill, dealing with the foundation
issues from which others emerge, which is why we suggest that the
specific objective
of
“promoting competition
in the provision of
services”,
such as are
provided by authorised persons, be subordinated to the other four,
which are far more generic and wide ranging. Indeed, the aim of
promoting competition in the provision of services would mean lower
prices and better services for consumers. To that extent, it falls
under one of the four principal objectives, to which it should be
subject, namely that of
“protecting and promoting the
interests of
consumers”,
as stated in
paragraph (d).
Simon
Hughes:
Amendment No. 217 was tabled by my hon. Friend the
Member for Birmingham, Yardley and myself, too. I am conscious that we
are not breaking new ground—the matter was discussed in the
Lords and on Second Reading.
Clause 1 is a statement of
regulatory objectives. Although those objectives are central to the
Bill, we must ensure that people understand the principles under which
lawyers act, and I have made that point privately to the Minister, her
officials, colleagues in the Conservative party and others. We ought to
ensure that people understand because the Bill is about the set of
principles that govern institutions and bodies such as the
Legal Services Board, which is dealt with in clause 2. We should write
the Bill so that it is clear that the principles govern the
institutions that it creates. I shall come back to the point about
structure.
The
starting point of the Bill is the list of objectives. They are good
objectives and it is good that they are clearly set out. People will be
pleased to see that the objectives
of
“protecting and
promoting the public interest...supporting the constitutional
principle of the rule of law...improving access to
justice...protecting and promoting the interests of
consumers...encouraging an independent, strong, diverse and
effective legal profession...increasing public understanding of
the citizen’s legal rights and
duties”
—that is
hugely
important—and
“promoting
and maintaining adherence to the professional
principles”
are set up in
lights, as it were, at the beginning.
The amendment deals with the
objective of
“promoting
competition in the provision of services within subsection
(2)”
as stated in paragraph (e). As the hon.
Member for Huntingdon said, the amendment would ensure that we get our
scale of priorities right. The legal system is a public service,
although many practitioners are private, by which I mean barristers and
solicitors other than those in the Government’s service or those
who are employed by public agencies. Legal service providers are there
for two purposes: first, to participate and to ensure that the legal
system works well and fairly and, secondly, to represent the people.
Those two purposes have to be uppermost in the scale of priorities,
beyond the principle set out in paragraph (e).
Of course, the public should be
able to choose which solicitors and barristers they use—that is
happening increasingly and it is a good thing. However, such choice is
not the central, core reason why we have a legal system. People go to
legal institutions to seek just and fair answers. It is a bit like the
issue of the health service. For me, given my political hinterland, the
important thing about the settlement of the post-1945 Attlee Government
and the welfare state was that we had a national health service to
which everybody had access without having to worry about their
finances. Competition among providers of health services to ensure
quality of care is not the first principle. We could argue and debate
that, but the principle is that everybody should have access to a
good-quality health service. The same principle applies to legal
services.
Some people
in the legal system are directly employed by the public service,
including judges, district judges—formerly stipendiary
magistrates—and the lay magistracy, whose expenses are paid by
the public service. Court staff are public servants, so they are
outwith this debate. Other people can become involved in public service
when they step into the legal system or do anything involving the
courts. Giving advice at the beginning does not necessarily involve the
courts, but once they are involved a public service is being
supported.
Simon
Hughes:
I shall make just one point before taking an
intervention from the hon. Gentleman. When people seek legal advice
about a dispute with a neighbour, a matrimonial dispute or anything
else, they may hope in the first place that the matter never goes to
court and can be resolved outside the courts. If people want to make a
business contract, the matter may never go to court—that would
only happen if it went wrong. I appreciate that lots of things that are
not court-related are one step removed from the measure. However, that
does not mean that one should not ensure that all those who join the
honourable professions within the legal service—there are
increasing numbers of them, including people dealing with patents,
legal executives and so on—understand that, fundamentally, their
duty is to ensure that the rule of law comes first and that access to
justice and all the other principles are established. Those things
should come first and competition should be subject to them. I support
the
amendment.
John
Mann:
The hon. Gentleman said that the key principle
behind the Bill is that the general public should know the rules
governing the legal profession. However, is there not a second key
principle behind the
Bill? The public and the individual should be empowered in any complaint
against the legal profession, precisely because of the danger that
legal professionals could use their expertise and knowledge to threaten
action against the individual. Empowerment is a second vital component
of the
Bill.
Simon
Hughes:
I accept that. The hon. Gentleman has had
experience in his constituency, particularly in fighting the good fight
on behalf of people who have suffered as a result of their employment
and sought legal redress. He and I have served on Committees together
when this issue has been on the agenda and we have sought to give
proper compensation to those people, very much belatedly. The Minister
has played an honourable part in that and other people were
supportive.
The hon.
Gentleman is right. He will hear me say, as the Committee goes on, that
the public should be entitled to clear access to the service, to
understand what is going on and to be sure that, when they go through a
door marked “The Lawyers”, they know with whom they are
dealing, whether it is a qualified solicitor, a legal executive, a
clerk, a trainee or the tea boy, because often they do not and they are
left in the dark. Sometimes, people think a person is a solicitor when
that is not so. They may not know, when they go to court, whether their
barrister has one year or five years’ experience, and sometimes
they do not know whether the barrister has done any such work before.
People have turned up at court and meet the person representing them
for the first time. In turn, that person has never seen the papers
until two seconds or two minutes before, has clearly not been briefed
and cannot, given the time that they have spent on the case, properly
represent that individual. There are huge issues to
consider.
If people
have a complaint, they need a service that ensures that they have equal
status. That is why I support the setting up of an independent body,
whereby people can go through one door and all complaints can be dealt
with objectively. I will support the hon. Gentleman in some of his
amendments, whether probing or otherwise, to ensure that we have
independence and that the lay person, though not a lawyer, speaks out
strongly. If we fund a legal service, as we should—I am arguing
for more funding for legal aid in other contexts because we still need
significant increases in funding for the public legal service in
England and Wales—we have to ensure that the public,
irrespective of their education, means or experience, have proper
access to it, so I share the hon. Gentleman’s view.
I am told that we can return to
this matter but, as for the amendment and the specific list of
interests, I hope none the less that, given his background, the hon.
Gentleman will be sympathetic to the proposal. It simply says that the
promotion of competition should come after the first four principles:
public interest, including the interest of the people whom he and I
represent; the constitutional principle of the rule of law, to which we
should all sign up; access to justice, which is about the rights of lay
people; and protecting and promoting people’s interests as
consumers.
I hope that
the Committee will support the amendment and that the Minister will be
sympathetic
to it. I hope that she realises that this is a more than just a game,
and that a second-tier principle should come after the golden
principles of the Bill. If we do not have the golden principles right,
let us change them. Let us establish the core principles and ensure
that it is not competition first and the devil take the hindmost, but
guarantee that competition is subject to those four principles. I
support the
amendment.
11
am
Robert
Neill (Bromley and Chislehurst) (Con): May I say what a
pleasure it is to serve under your chairmanship, Mr. Cook.
Noting the birthday of my hon. Friend the Member for Enfield,
Southgate, I remind him of the old adage that, as time goes on, old
lawyers never die; they just lose their appeal. Having got the bad joke
out of the way, I wish to declare my interest as a member of the Bar,
although I do not practise. Indeed, I did not renew my practising
certificate. I therefore do not consider that I am likely to be
prejudiced by anything that is said in
Committee.
I support
the amendment tabled by my hon. Friend the Member for Huntingdon and
the observations made by the hon. Member for North Southwark and
Bermondsey. It seems sensible to set out such priorities. It is the
right approach. In fairness to the legal profession it sets out what in
my experience of some 30 years or more is the way in which the
majority of lawyers regard the profession and their responsibilities.
Having heard some of the things that were said, perhaps for legitimate
reasons, on Second Reading, I regret that it could be suggested that
the majority of lawyers are anything other than decent and reputable
people who follow such principles in their own career. In the 30 years
during which almost exclusively I worked in the criminal courts, either
on legal aid or otherwise publicly funded cases prosecuting on behalf
of the Crown Prosecution Service, I found that with the people with
whom I
dealt.
Solicitors,
barristers and legal executives—those who do the
back-up—take the whole issue of their responsibility to the
public interest hugely seriously, as they do their responsibility to
lay clients. They see that as the thrust of their profession, rather
than the commercial issues of consideration. Of course, they all need
to make a living, but that is the how the majority of lawyers regard
their profession. If we set out such principles at the beginning of the
Bill, it will clearly demonstrate not only what the profession believes
to be the case, but what Parliament rightly says should be the case in
the public interest. It will make explicit the best practice of our
institutions. The amendment would be a constructive start and fit in
with the profession’s desire to have constructive independent
regulation that engenders public
confidence.
John
Mann:
I did not quite catch the comments of the hon.
Member for Huntingdon during the speech of the hon. Member for Bromley
and Chislehurst, but is it not precisely to protect the reputation of
decent solicitors, barristers, legal executives and others that the
Bill must contain clarity and robustness in its procedures and have the
ability to take on the minority who bring his profession into
disrepute?
Robert
Neill:
I agree with the hon. Gentleman about such
principles. I am glad that he recognises that it is a minority who
cause problems. That needs to be put firmly on the record. It is
exactly because I agree with him that I want the Bill to have a robust
and, above all, an independent framework for ensuring public confidence
in the profession. I want it to be independent of the profession, as
well as independent of the Government. The amendment would be a good
start in setting out
priorities.
Bridget
Prentice:
Let us be clear. We all agree that the majority
of lawyers are dedicated and do a very professional job. I do not think
that anyone resiles from that. The issue about whether one regulatory
objective should take precedence over another has been debated since
Clementi published his review in December 2004.
I
invite the Committee to reject the amendment. Ensuring effective
competition is essential to the new consumer-focused regulatory
network. I think that that might be only the first or second time that
the word “consumer” has been mentioned in our
deliberations. However, it will be repeated ad nauseum throughout
because the Bill is about the consumer and protecting the consumer. The
promotion of competition encourages innovative and more efficient ways
of providing legal services and firms to address the needs of the
consumer in the legal sector. Therefore, it is right that we encourage
firms to be responsive to consumers’ needs with respect to
price, quality and variety. For that reason, the competition objective
in clause 1 is consistent with both the public and the consumer
interest. I do not agree that it should be seen as of lesser importance
than any of the other objectives.
Simon
Hughes:
The Minister may be about to advance some more
arguments, but it is not sufficient to say that consumers are important
and therefore cannot be a subsidiary qualification. I am sure that she
appreciates that. I hope that she will come on to evaluate the
importance of the other objectives and answer the obvious criticism
made by the hon. Member for Huntingdon, me and others, which is that
they are in a different league of value. Therefore, can we have some
unpacking of the answer? Just reciting, “Consumers are important
and therefore have to take equal priority” is not a sufficient
answer.
Bridget
Prentice:
I hope that I am going to be able to do that.
Those were my introductory remarks. I need to establish in this
Committee that the Bill is about consumer interest and ensuring that
the consumer is properly protected and valued. Also, competition is a
priority on the international stage. I dare say that later on in our
deliberations, people will want to comment on the value that the legal
profession brings to our economy through its international work. It is
not right that the Government relegate its importance whenit
comes to this landmark piece of legislation. Competition in
professional services is central to the work of the European
Commissioner for Competition. I agree that competition has a key part
in reform of legal
services.
In addition
to the benefits of competition itself—and I think that this
might address the point madeby the hon. Member for North
Southwark and
Bermondsey—the Government are opposed to ranking the objectives
in any way. It would be against the recommendations of Sir David
Clementi who proposed that the regulator should be able to balance the
objectives on a case-by-case basis. The Bill realises that
recommendation and establishes a risk-based and proportionate
regulatory structure in which the board, approved regulators and the
Office for Legal Complaints can look at how each of the objectives
applies in any given situation. We have consistently said that the
objectives should not be weighted in any way, and we have resisted the
call from some in the consumer arena who said that the consumer
objective should take preference. I resisted that, despite the fact
that I say consistently that the consumer is at the heart of this Bill.
We have also resisted similar arguments from the legal profession
saying that one or other of the legal objectives should be right at the
top.
The Joint
Committee suggested that, in the explanatory notes, the objectives
should not be listedin order of importance. We agreed with
that recommendation and have not listed them in that way. The amendment
would be at odds with the principle advanced by the Joint Committee,
which is why I cannot agree to
it.
Mr.
Djanogly:
May I first deal with the important remarks made
by my hon. Friend the Member for Bromley and Chislehurst? He said that
what the clause deals with is reflected in the current practice of the
vast majority of lawyers. On Second Reading, certain hon.
Members—they know who they are—seemed to regard the Bill
as a chance to have a go and bash up lawyers. I put it on the record
that most lawyers are hard working, reputable and provide a good
service.
The hon.
Member for Bassetlaw made an important point in asking whether a key
objective should be support for the person in the street coming up
against a sophisticated lawyer. The answer is yes, but that is covered
in paragraph
(d):
“protecting and
promoting the interests of
consumers”.
As that is
one of the priority objectives in our amendment, it would not
negatively impact on what he wants in that
regard.
I was confused
by the Minister, who initially said that the Bill is primarily about
protecting the consumer interest. However, that is not true. Equal
consideration is given in clause 1(1) to all the objectives. The
consumer interest is not put ahead of the others. She went on to say
that the objectives were to be given equal value. However, the two
things that she said conflicted. I did not see where she
concluded.
Stephen
Hesford (Wirral, West) (Lab): Is not a central problem
with the hon. Gentleman’s amendment, which I hope the Committee
will reject, that it is limited to paragraphs (a), (b), (c) and (d),
and does not refer to paragraph (h), which is a large percentage of the
clause, as hon. Members will see on reading subsection (3), which deals
with
“professional
principles”?
As a
practising barrister for 16 years before I came into this place, I
should have thought that since we are talking about what the
profession stands for the core principles in the amendment
should include
paragraph (h)—if it were a core element as he describes
it—but it does not. Is there not some confusion? Is not what he
is doing partial? Therefore, what my hon. Friend the Minister said is
right.
Mr.
Djanogly:
The hon. Gentleman makes an interesting point,
but a different one from the Minister, in saying that another objective
should be included in the core ones. We could debate that as a
stand-alone issue. However, that is not the point that the Minister was
making, which was that the clause should be left as it is and the
objectives should be treated
equally.
Simon
Hughes:
I want to pick up the point made by the hon.
Member for Wirral, West. I think that it is valid to argue that there
are two principles in the list of objectives that could be added which
are not to do with self-interest. There is the citizens’ rights
objective in paragraph (g), which the hon. Gentleman alludes to, and
the general adherence to “professional principles” in
paragraph (h). I hope that the hon. Member for Huntingdon and his
colleagues will meet with me and my colleagues when we come back on
Report or later to consider a measure that meets that
concern.
Mr.
Burrowes:
I hear the Minister’s response and
her assurance that an explanatory note deals with the competing
objectives. In evidence to the Joint Committee, the Solicitor Sole
Practitioners Group made the point that the Legal Services Board is
being expected to balance seven highly complex regulatory objectives
against each other with no guidance from Parliament. That is an
approach that has not always worked well in other areas of legal
regulation. It is important to prioritise, as is set out in the
amendment, to express core principles.
Mr.
Djanogly:
I take the point made by the hon. Member
for North Southwark and Bermondsey. It is an area that is worth looking
at. However, it is different from our amendment and from what the
Minister is saying, but that does not make it an invalid point. I agree
with what my hon. Friend the Member for Enfield, Southgate had to say.
I was going to conclude on that point. I am not entirely sure whether
the Minister accurately understood what the Joint Committee
said.
11.15
am
The Joint
Committee did not explicitly recommend that the objectives should not
be prioritised. It said that, if they are not prioritised, the
explanatory notes to the Legal Services Act, as it will be, should be
made explicit. The Joint Committee noted that the Government had not
ranked the regulatory objectives in order of importance in the draft
Bill, but it was concerned that that could create uncertainty and
confusion over how the objectives are applied. The amendment would
clarify that issue, so I thank my hon. Friend for his
intervention.
Stephen
Hesford:
I have the Joint Committee report in front of me.
I sat on the Committee, as did the hon. Member for Enfield, Southgate.
Paragraph 5
states:
“If it
is not made explicit on the face of the Bill that
they”—
the issues
we are now talking
about—
“are not
ranked in any particular order, it is inevitable that they will be seen
as listed in order of priority. We therefore recommend that the
Explanatory Notes to the Legal Services Act should make it explicit
that the objectives are not listed in order of
priority.”
In other
words, the Committee unanimously did not want any kind of priority
setting.
Mr.
Djanogly:
All I can say is that I do not think that
I said anything different from the hon. Gentleman. It would come down
to what was in the explanatory notes. That was my reading of it and I
think of my hon. Friend the Member for Enfield, Southgate, who also sat
on the Joint Committee.
There is no doubt that this is
a point that has been through the hoops. That will be the case for many
of the points that will be discussed over the coming weeks. Having
heard the debate, I would like to put the amendment to a Division. I
will recommend that my hon. Friends vote in favour of
it.
Question put,
That the amendment be
made:—
The
Committee divided: Ayes 5, Noes
10.
Division
No.
1
]
AYESNOES
Question
accordingly
negatived.
The
Chairman:
It has come to the attention of the Chair that
at least one hon. Member is clearly using a device with which to send
text messages. The Speaker’s Panel of Chairmen has considered
the use of such devices numerous times and, on each occasion to date,
has decided against giving permission. I therefore ask all members of
the Committee to bear my words in mind, and I ask the particular hon.
Member to desist
forthwith.
‘(ca) That
authorised persons should not act where there is a conflict between the
interests of two or more of their clients, or between the authorised
person and their
client.’.
I
propose the amendment on behalf of my hon. Friends. It was suggested by
the Law Society and would ensure that the avoidance of conflict of
interest is included in the professional principles, the promotion
of which will happen by virtue of the regulatory objective in clause
1(1)(h). At present, the Bill will require the Legal Services Board,
the approved regulators and the Office for Legal Complaints to act in a
way that is compatible with the regulatory
objectives.
The
regulatory objectives are set out in clause 1, one of which
is
“promoting and
maintaining adherence to the professional
principles”.
It
could be seen as important that the Bill should contain such an
objective. It is also important that the new regulatory structure
maintains and builds on the strengths of the existing system, while
providing a more coherent structure for oversight regulation and
ensuring that approved regulators separate their representative from
their regulatory functions.
One of the main strengths of
the existing regulatory system is the strong ethos of professionalism
that it engenders, which is respected by the great majority of lawyers.
The professional principles are set out in clause 1(3) and require
authorised persons to
“act with independence and
integrity...maintain proper standards of work...act in the
best interests of their clients...comply with their duties to the
court”
in respect of the
conduct of litigation and advocacy, and keep the affairs of clients
confidential.
At
present, the principles do not include the need to avoid a conflict of
interest. That is a surprising omission. The charter of core principles
of the European legal profession adopted by the Council of Bars and Law
Societies of Europe—the umbrella organisation for all European
legal professional bodies—specifically includes avoidance of
conflicts of interest, whether between different clients or between the
client and the lawyer. We believe that that is an important principle
of practical significance to the legal profession and its regulators.
It is not clear why it has been omitted from the Bill, and the
amendment is designed to fill the
gap.
Several points
that came out in our reasoning of why the Lord Chancellor should have
to concur with the Lord Chief Justice on appointments to and
terminations of the board are relevant. Time and again, we have
stressed the importance of maintaining the independence of the legal
profession from the Government and the dangers of losing that, whether
as a result of an actual or perceived increase in the
Government’s
interference.
The
amendment is another means by which we can demonstrate that the Bill
will not destroy the independence of the legal profession and will not
be used by the Government as a way in which to intervene and meddle in
legal affairs. Such a clear statement made at the beginning of the Bill
in the regulatory objectives that will govern it that prohibits an
authorised person from acting when there is a conflict of interests
will ensure, as well as sending out a clear message to those overseas
and at home, that the independence of the legal profession is not
threatened by the
Bill.
John
Mann:
This is a phenomenal amendment, and I trust that the
hon. Gentleman will consider his tactics, counsel Members and work out
how best to proceed to ensure that it is made. If that happened, it
would
produce the most phenomenal change to the way in which the
solicitors’ profession works.
I shall give one example, but I
could give dozens. There might be a firm of solicitors that acts for a
claims handler; in other words, the claims handler provides work for
the solicitor. A claimant is contracted as the client of the solicitor.
However, the solicitor might assist the claims handler, with whom he
has a professional relationship, and act in other ways to get moneys
out of the claimant, which might later become a matter of dispute. That
is a common situation; indeed, most claims handlers act in that way
through the direct relationships that I
described.
Mr.
Kevan Jones (North Durham) (Lab): May I give my hon.
Friend an example? Watson Burton and P and R Associates in Newcastle
acted in exactly the same way as he suggested in his example:
£350,000 was taken from miners’ compensation and passed
to P and R Associates, and it was not clear in whose best interests
Watson Burton was acting but, clearly, it was not the clients’.
Would the amendment not outlaw that type of
relationship?
John
Mann:
It clearly would, but it goes much further. The
measure would come into play on financial services and the provision of
loans, the motor insurance industry and the funding of conditional fee
agreements. When there is a contractual relationship—we know
scores of examples—the duality of representation comes into
play. That argument has repeatedly been used to demonstrate the catch
in which individual consumers frequently find themselves when financial
institutions have provided financial support in the form of loans,
particularly since conditional fee agreements were introduced in 2000.
Claims handlers have sometimes gone and sorted out a claim. The measure
goes well beyond the miners’ claims that I have been involved
with and gets into the heart of a much bigger
business.
The hon.
Member for Huntingdon may have inadvertently hit upon quite a solution
to the problem. It is rather more draconian than any that we on the
Labour Back Benches had considered, which is why we did not table an
amendment ourselves. We have always taken the view that there needs to
be some kind of parity between defending the rights of the consumer and
the ability of the legal profession to do its honest business well. We
have always considered the matter on the basis that
regulation—or self-regulation—that allows the consumer
proper redress for complaints is the way forward, as long as it is
robust. I still veer toward that principle, because I think that it
would protect the good name of the profession better than draconian
legislation.
The hon.
Gentleman has come up with the most draconian of proposals. It would
transform the situation and is therefore worthy of some real
consideration. I am a little loth to rush into such a major change to
the way in which the profession does its business this morning, but I
am interested in what the Minister and the hon. Gentleman have to say,
because the measure goes well beyond anything that I might have
proposed. I rather warm to the amendment, and I fear that I might have
to obey a call of nature if a vote on the matter suddenly
arises.
Mr.
Jones:
Like my hon. Friend, I read the amendment last
night with some intrigue. Has the penny dropped for Conservative Front
Benchers that they must fight for consumers’ rather than
lawyers’ interests? As my hon. Friend the Member for Bassetlaw
eloquently said, the amendment would drive a coach and horses through
the activities at least of the claims handling companies, and if it
made those organisations disappear, I would not be too
sad.
The amendment
says that
“authorised
persons should not act where there is a conflict between the interests
of two or more
clients”.
I should like
to offer a couple of examples. The first is the case of Watson Burton
and P and R Associates, which I just mentioned. P and R
Associates isa claims handling company that passed on miners
compensation cases to Watson Burton, which then took cases to the
scheme. At the end of the case, Watson Burton deducted a fee from the
compensation that individuals had received and passed it to P and R
Associates. In whose best interests were they
acting?
If the
amendment were adopted, Watson Burton would not be allowed to act for
two parties, because the third person in the parties’
relationship is the client. Watson Burton was clearly not acting in its
clients’ best interests in the case that I mentioned, and there
was a clear conflict of interest between its relationship
withP and R Associates and the best interest of its
clients.
11.30
am
I have been
trying to think why the Conservatives would propose the amendment. The
amendment would demolish trade union legal services, because most
referrals to trade unions are passed on either to an in-house firm of
solicitors or to a panel of solicitors. Is there not a conflict in that
three-way relationship?
My second example, in which
there was indeed such a direct conflict, is a situation that involved
the Durham National Union of Mineworkers, which took in miners
compensation claims and passed them to Thompsons solicitors, which then
deducted 7.5 per cent. from the final claim award and passed it back to
the NUM. Again, there was a clear conflict of interest between the
actual client and the relationship that Thompsons had with the Durham
area NUM.
I am not
sure whether the hon. Member for Huntingdon realises what he is
proposing; but, as my hon. Friend the Member for Bassetlaw has said, it
is quite a draconian way forward. I sympathise with much of what is
proposed, and I would not like to throw it out altogether. Unlike my
reasonable Friend the Member for Bassetlaw, I am not a light-touch
regulator in this field. There is a need for strong and hard regulation
of the legal profession, because, sorry as I am to say it, I do not
accept the rosy picture that has been painted of that profession this
morning, given the way in which lawyers have dealt with my constituents
in relation to miners
compensation.
I warm
to the amendment, but I point out to the hon. Member for Huntingdon
that I think there are consequences that he has not thought
about.
Simon
Hughes:
There was speculation on Second Reading
about whether one or both of the hon. Members for Bassetlaw and for
North Durham would
make it to the Committee, so I am glad to see that their representations
fell on happy ears in the Whips Office and that they both arrived as a
double act. The double act was to be assured, and if one of them cannot
be here for some reason then the case will continue. However, I
apologise to the hon. Member for Bassetlaw for calling him the hon.
Member for Mansfield on Second Reading; I stand corrected.
I am not troubled by the
amendment. Had I been so, I would not have signed up to it and would
not have taken my hon. Friend the Member for Birmingham, Yardley along
with me. As the hon. Member for Huntingdon said, the principle is an
important one. Indeed, as I think he said, it is not an invention of
his or of mine, and it is not just an invention of the Law Society or
of those who directly advise us; it comes from somewhere
else—from the charter of the core principles of the European
legal profession, which has been adopted in this country and more
widely. That is the umbrella body for all the European legal
professional bodies, and I do not know whether that gives it more or
less justification, because if one country’s lawyers are not
terribly well regarded, the body that represents all the lawyers of all
the European countries might be even less well regarded. However, at
least it has common support.
The principle is important.
Subsection (3), as we know, stresses the importance of acting with
independence and integrity. Acting with independence is very important.
I remember, as will anyone else who has been a lawyer, that one
sometimes has to say to a client, “I’m sorry, I
can’t do that”, “I’m sorry, that is
inappropriate”, “I’m sorry, that’s
unacceptable”, or “I’m sorry, that is not what can
be done.” Lawyers are not bought to carry out a client’s
wishes but to give advice and act in accordance with that advice. It
can be rejected, but lawyers cannot do things that directly conflict
with it. Lawyers often pull out of cases because what they know is
incompatible with what they have been told.
Subsection
(3) also stresses the importance of maintaining a proper standard of
work and acting in the best interests of a client. Both are not
insignificant—I refer to the case of the brief delivered at the
last minute. In England and Wales, the service that barristers give is
better than it used to be, as briefs used to be given a moment or two
before the case, but there is still a job to do to maintain proper
standards of work.
Subsection (3) also mentions
the duty to comply with the duties to the court in respect of the
conduct of litigation advocacy. Again, that comes up quite often. There
is sometimes a duty to share something with the court or with people
who represent others in court, or to advise a judge of something.
Sometimes that should be done confidentially or permission should be
sought.
The last
issue stressed in subsection (3) is the requirement to keep the affairs
of clients confidential. By definition, that is important and comes up
in every affair from the most simple and uncomplicated to the biggest
issues of state, such as when the Law Officers, as the lawyers who
advise the Government, argued that they should keep their advice
confidential when they advise on issues such as whether it is legal to
go to war in Iraq. It applies across the gamut.
Under the amendment, people
should not act where there is a conflict between two or more of the
clients or between the authorised person, as defined in the Bill, and
the client. That is important. I remember discovering during an
election campaign in which I took part that I was being sued for libel
by someone who took exception to a press comment that I had made about
them—
Simon
Hughes:
It was an eminent trade unionist, as it happens. I
went to the solicitors whom I had used in the past and found very
helpful, and they told me that that they would love to help me but they
represented that union on that occasion. They did not think that it was
appropriate; I understood that and it was completely the right
response. I sought advice elsewhere and was guaranteed that
independence. No argument could be made by the trade unionists that the
company was compromised in representing that union in the past, present
or future.
I hope
that the Minister will be sympathetic. She clearly has support from the
Opposition, and growing excitement and support from Labour Back
Benchers. I have not done the figures, but I think that if we rustle up
everyone on these Benches, plus two, we should be there.
[
Interruption.
]
The Whip says no, but we
should manage it if we have two more and keep a few outside the room.
The Chief Whip—we never know what might happen next month, but I
mean the Whip—is keeping his tally on the scoreboard, which is
not as exciting as yesterday’s cricket but none the less of some
interest.
My point is
that there is a good prospect for the amendment. Two parties have
signed up to the proposal. There is warming support from the
intelligent consumer lobby among Labour Back Benchers, and so I hope
that the Minister will give a positive and enthusiastic response. We
are already on page 2, and we are making great progress through the
Bill, so it is time for the Minister, who resisted the first amendment,
to make her first generous concession of the day, so that all the
people who came to watch us will go home thinking that there is real
movement in Committee and that Committees are a procedure worth having.
I am sure that the Minister will not disappoint—at least, I hope
not.
Bridget
Prentice:
Will I disappoint or not? My notes tell me that
I should resist the amendment, but perhaps there will be some movement.
Let us not get too carried away. My hon. Friends describe the amendment
as draconian, and it is an interesting concept that the Opposition want
to impose a draconian measure on the legal
profession.
I
must resist the amendment, because a couple of issues need to be teased
out. On the face of it, it looks reasonable and sensible because the
purpose of the Bill is to protect the consumers of legal services, so
that when someone puts a case in the hands of a legal professional, it
should be taken as read that the lawyer has a duty not to compromise
the client by having conflicting obligations elsewhere. The amendment
may look reasonable, but any conflict between an authorised
person’s interests and those of a client is already prohibited
under clause 1(3)(c), which requires the authorised person to act in the
best interests of their clients. If there were two clients with
conflicting interests, it would be impossible for the authorised person
to act in the best interests of both. The rules are complicated, and I
am reluctant at the moment to put the amendment into the
Bill.
I
am a little surprised that the Law Society is backing the amendment,
because it recently liberalised its rules, which I believe now allow a
solicitor or law firm in certain circumstances to act in what might
otherwise be a conflicting situation, provided that certain conditions
are met. A key proviso is that the client gives informed, written
consent. The conduct rules of the Council for Licensed Conveyancers
also allow a licensed conveyancer in some situations to act for
opposing parties, but again with strict conditions to protect
consumers.
At the
moment, there is a proper balance between ensuring that
consumers’ interests are protected and avoiding disproportionate
restrictions. I would not want to introduce a provision that
compromised that too
much.
John
Mann:
In terms of unforeseen consequences, has the
Minister considered that, if the amendment were part of statute, it
would provide a defence for any solicitor who had identified two
clients to the individual consumer by definition, because it is in
statute? In other words, they would say that, because it is in statute,
they are either breaking the law, which would require a legal remedy,
or that they are not, otherwise someone would have taken legal action
against them. Therefore, the consumer arguing on the best-interest
principle, as in the case of Watson Burton and P and R Associates,
would be tied down in a legal defence and a circle they could not get
out of, purely because it existed in statute, which in itself would be
the defence of the solicitor who might not have acted in the best
interests of the individual
consumer.
Bridget
Prentice:
My hon. Friend makes a reasonable and valid
point, and it is partly because of his argument and that of my hon.
Friend the Member for North Durham, as well as the Opposition
spokesmen, that I would like to reflect on the matter. I am worried
that the amendment would cast doubt on the validity of a number of
existing rules. That would not be welcomed by providers or consumers,
particularly when specialised or commercial services are involved. I am
not yet entirely convinced that there is a gap, but I am happy to
consider the matter
further.
Simon
Hughes:
I am encouraged by the Minister’s reply.
Her point about the Law Society recently looking at its rules again and
amending them is not inconsistent with the principle. To take a simple
case, it would be perfectly possible to have a rule that said that
someone in a firm could act for people on both sides of a dispute,
provided that there were clearly defined walls between the two parties
in the firm. I am grateful to the Minister for her sympathetic
response, which is not inconsistent with what she said about the
changes in the
rules.
Bridget
Prentice:
The hon. Gentleman is right. A properly run
professional firm ought to be able to have that wall, if that were
appropriate.
My final point—I make it
so that we can further discussions—is that hon. Members should
look at the Bill as a whole, and particularly at clause 177, for
example, under which all authorised persons will be under a statutory
duty to comply with the professional body’s detailed rules on
conflicts of interest. When we think about that later, hon. Members
should consider whether that might be sufficient, so that we might not
need the draconian measure, as my hon. Friend the Member for Bassetlaw
described it, that the hon. Member for Huntingdon has
proposed.
I agree
that it is essential that conflicts of interest are dealt with
effectively, and that is why the rules are so important. However, I
would ask the hon. Gentleman to withdraw the amendment, so that we can
reflect on it further and see whether the amendment or something
similar is necessary, or whether we can feel that the Bill covers the
concerns that have been raised in other
respects.
11.45
am
Simon
Hughes:
I have not talked formally to the hon. Member for
Huntingdon, but I am sympathetic to the Minister’s suggestion
and, likewise, I would be willing to look at what she has said and at
the linked parts of the Bill. On that basis, if the hon. Gentleman and
his colleagues are willing to do so, I should be happy for the
amendment to be withdrawn and for us to return to it on
Report.
Mr.
Djanogly:
Praise from the hon. Member for Bassetlaw is
praise indeed. I shall enjoy it while it lasts, because I have a
feeling that it will not last for long. However, he should accept that
we want a balanced Bill that represents all interests. He was rather
blunt in his understanding of where conflict exists. The issue is
rather more complicated than the position that he and the hon. Member
for North Durham described. In real-life practice, the existence of a
conflict can be a complicated or a simple issue, depending on the
circumstances. As the hon. Member for North Southwark and Bermondsey
said, lawyers have to consider such issues on an ongoing basis and
sometimes have to make decisions daily.
The Minister referred to the
Law Society’s recent changes to conflict rules. New procedures
were required, because the existing rules did not cater for the
complexity of commercial transactions in the modern age. The Law
Society undertook years of consultation and underwent a tortuous
process before those changes came into effect. The hon. Gentleman was
quite right that that is a separate point from the amendment, but the
two are by no means incompatible. The Minister’s response was
heartening, but we are not quite there. It would be tempting to gather
the votes of the Liberal Democrats and of my hon. Friends, who support
the amendment. On the other hand, I was pleased to hear her reassurance
that she would consider the matter further, I assume before Report. On
that basis, I beg to ask leave to withdraw the
amendment.
Amendment,
by leave, withdrawn.
Question proposed, That
the clause stand part of the Bill.
Simon
Hughes:
I will not make it my practice to comment in all
stand part debates, but I want to make one substantive point. Before
doing so, it would be remiss of me not to join everybody else in
wishing the hon. Member for Enfield, Southgate a happy birthday. I hope
that he realises that he shares his birthday with my esteemed nephew,
Daniel Hughes, who is 37 today, and that he believes that to be an
extra reason for celebration. I shall tell my nephew that he, too, has
an extra reason for celebrating, should he need one—I doubt that
he does.
I have made a
point about drafting and the layout of the beginning of the Bill. One
of my crusades in Parliament is to try to ensure that legislation is
more readable for the general public, as opposed to parliamentary
counsel and specialists. I am keen that Bills follow the logic of what
they say they are going to do and are easily readable, so that one does
not need continually to cross-refer back and forth. In a detailed Bill,
it is right to put the details in schedules, but, ideally, clause 1, as
drafted, should not stand part of the Bill. I will not press the matter
to a Division, but I am keen to put something on the record.
The long title of the Bill
states that it
makes
“provision for the
establishment of the Legal Services
Board”.
It then cites a
list of things that the Bill does. The long title is always a good
summary of what a Bill does. It is normally readable and clear, as is
true in this case, and there is always a catch-up bit at the
end—that is true of a big Bill, at least—saying
“and for connected
purposes.”
Logically,
therefore, the Bill should start with the provisions that establish the
Legal Services Board before it deals with the board’s functions.
That is what happens in part 2 and clause 2, except that clause 2
proposes the setting up of the Legal Services Board, then cross-refers
to schedule 1, which deals with the details of the board. That would be
a fine way to do it, but clause 1 starts with the regulatory
objectives, and anyone reading it would not be clear about who is
governed by those objectives, because that is not addressed. It just
says:
“In this
Act a reference to ‘the regulatory objectives’ is a
reference to the objectives
of”.
That is a bit like
starting a book with the index. One reads the dust jacket and the front
page thinking that one will get into the book, only to find that it
says, “This is a book which” and then says what the long
title tells us. One then starts to read the book, only to find that
chapter one is the index or the explanatory memorandum. That is not how
most of us like to start a book. If we want to look for something in
the notes, we look at the back of the book.
Things get worse, because
clause 1(2)
states:
“The
services within this
subsection”—
we
therefore have a definition provision first and a definition of a
definition
next—
“are
services such as are provided
by”.
We then have a third
term that has not yet been explained, because it mentions
“authorised persons”. Lo and behold, those persons are
not defined until clause 18, which comes under the reasonable heading
of “Interpretation”.
That is not
the way to grip the lay public. Let us suppose that I were studying my
first year of law or doing a first bit of research, or that someone had
asked me in my sixth form to talk about whether the legal system in
Britain is fit for purpose, or that I were doing a GCSE exam on the
legal system. In such circumstances, if somebody said, “There is
a great Bill going through Parliament called the Legal Services Bill,
which is all about setting up a new system”, I would give up by
the end of clause 1.
I
know what answer I will receive. I will be told, “This is what
the draftsmen think it is tidy to do”, but we are talking about
consumer services. The Minister, more than anybody else, has been
promoting them, so I ask her to do something before Report. I
appreciate that draftspeople are wonderful and important—we all
need them and they are all lovely—but they should do what the
elected representatives want them to do. They should not drive the
elected representatives, because they are the servants.
Clause 1(3) outlines
“professional principles”. That is a further definition
of the bit of definition in subsection (1). Subsection (4) then
qualifies the “authorised persons”, who are not defined
untilclause 18, by saying that they are
“authorised persons in relation to
activities which are reserved legal
activities.”
If hon.
Members want to know what “reserved legal activities”
are, they have to go elsewhere in the Bill. Then, having got through
all the grunge—through the coppice—we get to the clearing
of clause 2, which we will come on to in a minute and which
says:
“There is
to be a body corporate called the Legal Services
Board”.
To make a serious
point, we should start with that and say, if we think it is
so—it is what the Government think—“The most
important thing that the Bill does is to set up the Legal Services
Board and these are the rules governing it”. We should then say,
“The Legal Services Board, and/or the other bodies we are
setting up, will be governed by regulatory objectives in relation to
their activities.” The clause would then read logically. Then we
can get on to other things in the
Bill.
I will not make
this speech again when the matter comes up later, but I urge the
Minister to return to the draftspeople with her officials and get the
Bill in shape and in an order that reads logically and is consistent
with the long title, making it much more user friendly. I hope that
that point can be taken up, because it is seriously made. The bigger
the Bill, the more important it is. Otherwise, it will shoot about all
over the place. I hope that on Report I will not have to table a
provision to delete clause
1.
Mr.
Djanogly:
I could see the Bill team cringing as the hon.
Member for North Southwark and Bermondsey spoke. Of course, the Bill
went through quite a process before coming to the House and Committee,
so I can I understand their reaction. However, I came across an aspect
of alternative business structures when I was mugging up on the Bill
over the past few days that covered many of the specifics that the hon.
Member for North Southwark and Bermondsey mentioned. Rather than
dealing with alternative business structures inpart 5, we will
have to deal with a large part of the subject in clause 18, because the
definitions do notquite work.
Bridget
Prentice:
I have a lot of sympathy withwhat the
hon. Member for North Southwark and Bermondsey says. I dare not look
behind me, because I fear that the Bill team may be cringing at the
possibility that the Bill will be reordered. I agree with the hon.
Gentleman. I am sure that he has previously campaigned to have things
set out in simple, clear terms so that normal people can understand
them, use them and have the power that that gives them as a result. I
shall think about whether clause 2 in particular should be put at the
beginning of the Bill, as it contains a simple, straightforward
definition.
The
regulatory objectives were put at the beginning of the Bill because of
their importance across the whole regulatory framework: they cover the
board, the approved regulators and the Office for Legal Complaints, all
of which have duties to act in a way that is compatible with the
objectives. Those key principles, which underpin the rest of the Bill,
were put at the beginning to show their importance. I agree with the
generality of what the hon. Gentleman said. Too often, the way in which
Bills are written is a minefield for the normal citizen who wants to
understand what is happening. I will think again about whether small
changes can be made, but we have to be careful not to mess about with
clauses all over the place and make the thing topsy
turvy.
Clause 1 sets
out the eight regulatory objectives that have to be observed by the
board, the Office for Legal Complaints and the regulators. The public
interest objective was inserted in the other place, and was included to
ensure that the board, the OLC and the regulators consider the public
interest when discharging their functions. All the objectives have been
included following considerable consultation with stakeholders,
including consumer groups and the legal profession, and I believe that
they are consistent with what Sir David Clementi said in his
report.
The clause is
important, because it sets out the clear objectives by which all
partners in the new framework must abide. The board is subject to
parliamentary scrutiny, and the accountability described in the clause
creates the yardstick by which the board, the OLC and the regulators
can be measured. On that basis, taking into account the plea from the
hon. Member for North Southwark and Bermondsey that the Bill should be
as clear and straightforward as possible, I propose that clause 1 stand
part of the
Bill.
Simon
Hughes:
I am grateful for the Minister’s
sympathetic reply. I understand the double difficulty of the inherited
tradition of those who do the drafting and the fact that the Bill has
been the product of pre-legislative and Lords scrutiny. However, it is
never too late—better to change it now than end up with a Bill
in the wrong
order.
12
noon
May I respond
to the Minister’s point, which I understand? If she were
troubled about starting the Bill with the Legal Services Board, there
would be another way of doing things: to start with the proposition
that, from the date of the Bill’s implementation, all the
agencies that it refers to would be governed by regulatory principles
and objectives. That way, we could come at things generally. Legal
services would be
governed by regulatory objectives, which would apply to all the bodies
and come from the state. There is not just one way.
In the context of what the
Minister and the hon. Member for Huntingdon said about subsequent parts
of the Bill, may I ask that we make sure that all the necessary repeals
and consolidation are included by the time the Bill is enacted? In that
way, if somebody came to look at the law governing the legal
professions and legal practice, that would all be in the Act, and we
would not still have to shoot across to six other bits of legislation.
We have a big Bill, so we might as well make it one that does
everything, rather than one that refers to four other Acts that people
will still have to dig
out.
Bridget
Prentice:
I shall certainly take that on board and see
whether we can accommodate the hon.
Gentleman.
Question
put and agreed
to.
Clause 1
ordered to stand part of the
Bill.
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