Legal Services Bill [Lords]


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Clause 121

Performance targets and monitoring
John Mann: I beg to move amendment No. 285, in clause 121, page 63, line 11, at end insert—
‘(za) investigate the handling of complaints by the Office for Legal Complaints (complaints under this subsection include those handled on behalf of the Office for Legal Complaints and those referred to Approved Regulators by the Office for Legal Complaints).’.
The Chairman: With this it will be convenient to discuss the following:
Amendment No. 286, in clause 121, page 63, line 24, at end add—
‘(6) The Board may take any steps it considers reasonably necessary to ensure the OLC’s compliance with any obligations set under section 118(2)(a), (b) and (c).’.
New clause 7—Intervention directions
‘(1) The Board may give the OLC an intervention direction in relation to any of its functions if the Board is satisfied—
(a) that despite notice it has failed to handle complaints about authorised persons effectively and efficiently, and
(b) that, in the circumstance of the case, it is appropriate to give the intervention direction.
(2) An intervention direction, in relation to the function of the OLC, is a direction that—
(a) the function is to be exercised by the Board or a person nominated by it, and
(b) the OLC must comply with any instrument of the Board or its nominees in relation to the exercise of the function.
(3) The Board may not determine that it is appropriate to given an intervention direction unless it is satisfied that the matter cannot be adequately addressed by the Board exercising the powers available to it under section (Board’s functions in relation to complaints).
(4) The Board must make rules as to persons it may nominate for the purpose of subsection (2)(a).’.
New clause 8—Board’s function in relation to complaints
‘(1) If it appears to the Board that complaints about any authorised person are not being handled effectively and efficiently by the OLC, the Board may exercise in relation to the OLC such of the powers in subsection (2) as it considers necessary.
(2) Those powers are—
(a) to investigate the handling of complaints about authorised persons;
(b) to make recommendations in relation to the handling of complaints about authorised persons; and
(c) to require the OLC to submit to the Board a plan for the handling of complaints about authorised persons.
(3) Where the Board requires the OLC to submit to it a plan for the handling of complaints about authorised persons but the OLC—
(a) fails to submit to the Board a plan which it considers adequate for securing that such complaints are handled effectively and efficiently, or
(b) submits to the Board such a plan but fails to handle complaints in accordance with it
the Board may give directions to the OLC.’.
New clause 9—Directions
‘(1) This section applies if the Board is satisfied—
(a) that the OLC has failed to meet the requirement of section (Board’s functions in relation to complaints) (3)(a) or (b), or
(b) that the OLC has failed to comply with any requirement imposed on it by or under this Act (including this section) or any other enactment.
(2) If, in all the circumstances of the case, the Board is satisfied that it is appropriate to do so, it may direct the OLC to take in a case within subsection (1)(a) or (b) such steps as the Board considers will remedy the failure, mitigate its effect or prevent its recurrence.
(3) A direction under subsection (2) may only require the OLC to take steps which it has the power to take.
(4) For the purpose of this section, a direction to take steps includes a direction which requires the OLC to refrain from taking a particular course of action.
(5) The power to give a direction under this section is subject to any provision made by or under any other enactment.
(6) The Board may take steps as it regards as appropriate to monitor and investigate the extent to which a direction under this section is being, or has been, complied with.
(7) Where the Board revokes a direction under this section, it must—
(a) give the OLC notice of the revocation, and
(b) publish that notice.’.
John Mann: In clause 121, we are dealing with a major principle that needs to be reinforced in one way or another. However, hon. Members will be relieved to know that it can be argued succinctly. It is very straightforward, and I shall illustrate it with a simple example to demonstrate the importance of being able to presume that an investigation is made of the way in which complaints are handled.
I could go on and on. So far, I have found one who met his solicitor. In that case, I had arranged for a second solicitor to take over a case in order to sue the previous solicitor; the client had not met the first solicitor, but he met the new solicitor that I arranged for him. None of the others had met their solicitor. I am not saying that I will not come across more, but there have been none so far. Some were quite happy with the service, probably because they received good compensation. Others were not. It is probably related in part to the end result. When one delves deeper, the fundamental issue is that none of my constituents with industrial deafness had met their solicitors, yet the solicitors had made vital decisions about those cases and about the funding of the claims over the telephone.
I, on their behalf and at their explicit written request, made a complaint to the Law Society. Over time, the Law Society handled those complaints well, but what happened at the beginning illustrates the importance of being able to investigate the way claims are handled. At the beginning, the Law Society attempted to mediate. That was the tradition, and there is nothing wrong with that. However, during that process of mediation, a new practice started. In this instance, the Law Society rang my constituents to see whether the offer from the solicitor was good enough—thankfully, such practice no longer takes place, certainly not in any case that I put forward. I met my constituents to find out their real wishes. In 80 per cent. of the cases, they thought that the solicitor had rung them. They had never seen the solicitor; most of them had never met a solicitor. They would not know the difference between the Law Society’s claims handling unit, the solicitor or any other body. I have no idea whether those cases are representative of the entire country.
I now have large numbers of textile workers—mainly women—coming forward with similar issues. Therefore, we need to build into the working practices of regulation an ability to investigate how complaints are handled. I suggest that that is in the interests of the regulatory bodies and the good name of the profession. On that basis, I make those suggestions to the Minister as a way of building that more explicitly into the Bill.
Simon Hughes: The three new clauses stand in my name and that of my hon. Friend the Member for Birmingham, Yardley. They are fairly self-explanatory. They pick up the fact that the LSB will have no powers to investigate the OLC. The Bill and the proposed arrangements do not include a provision for the board to intervene if the OLC is deemed not to be handling complaints properly. These are probing new clauses to ask the Minister to reflect on whether there ought to be a measure that provides that oversight and therefore transfers to the board the powers of the legal services commissioner, who oversees complaints under the present system. New clauses 8 and 9 cover the occasions in which that might happen and suggest how appropriate action can be taken.
I think that it is convenient to discuss the wider points in clause 121 now, because the clauses that we have just dealt with and this one fall under a section of the Bill called, “The Office for Legal Complaints”. Will the Minister tell us how the Government envisage separating the handling of complaints about service, as referred to by the hon. Member for Bassetlaw, and complaints about conduct. Complaints about conduct are obviously described as “different” traditionally, although I appreciate that they can overlap.
Finally, there has been reference in the Bill—as there is everywhere else—to the fact that
“the OLC must have regard to such generally accepted principles of corporate governance as it is reasonable to regard as applicable to it.”
Corporate governance has become a buzz phrase. I notice that it appears pretty regularly in legislation. It is never defined very accurately, if at all. I should be grateful to know what is meant by it; we all know in general terms. We are all involved in organisations that are told that they must have good corporate governance according to principles, but does that mean with reference to some code that the Government follow or one that non-departmental Government bodies follow? Is there a starting point, or are organisations, such as the one that we are setting up, expected to go off and find their own best practice? There is a competitive market for best practice in corporate governance. It does not appear to be the holy grail, so having just a trite and bland statement might not be quite enough if the Government want certain principles to be applied.
Bridget Prentice: The OLC will report to and be accountable to the LSB. It will be responsible to the board for its operation of the new ombudsman scheme. The board’s statutory powers relating to the OLC must reflect that relationship, so that the board has effective oversight and can act if the new body is seriously failing to deliver but cannot closely supervise or micro-manage the OLC. It is not for the LSB to deal with the day-to-day handling of complaints. That is why we have set the board’s controls in that way.
I shall explain how the controls work. The first control lies in how part 6 is arranged. The OLC will work through a set of rules that must receive the board’s consent before taking effect, so the board will have complete oversight of how the OLC rules are framed and consequently of how it will operate. The board will also amend or modify any rules that it considers not to be working properly.
The second control is that the OLC will be accountable to the board through its annual report, which must deal with any matter that the board has directed. For example, it might have to show how it has improved the speed with which complaints are resolved—a similar position to that of some of the bodies that the ombudsman presently regulates. In addition, clause 120 will allow the board to require the OLC to prepare a report on any matter relating to the OLC’s functions at any time. That could include, for example, a strategic plan for remedying a failure to meet a performance target. That is the key power. It will allow the board to maintain effective oversight of the OLC. If it has any concerns about how the OLC is operating, it can require a plan, for example, describing how the OLC proposes to remedy the issue.
Clause 121 will give the board the power to set performance targets, impose conditions on how they should be met and monitor performance against them. It will allow the board to monitor systematically how complaints are handled. The board’s ultimate power relating to the OLC is in paragraph 8(1)(b) of schedule 15, which will allow it to remove members of the OLC. Clearly, that power will be used only when OLC members have failed significantly in the discharge of their duties, but it is nevertheless a hugely important power.
In addition to being subject to those statutory powers, the OLC, as an NDPB, will of course be accountable to Parliament for its efficient use of resources and discharge of its statutory responsibilities, in a way that current complaint-handling or regulatory bodies are not.
All those powers, taken together, will provide an appropriate and effective control over the OLC. That is why the amendments are unnecessary. They are also inappropriate. Amendment No. 285 would give the board the power to investigate the handling of complaints. Presumably that would allow the board to ask for documents, seize files and so on and to examine how the OLC has dealt with individual cases. That might compromise the independence of the new complaints body and call into question the ombudsman scheme’s compliance with article 6.1 of the European convention on human rights.
I come to amendment No. 286, tabled by my hon. Friend the Member for Bassetlaw. I say to him gently that it is inappropriate, because as far as I can see, clause 118(1)(a), (b) and (c) do not exist. He may have been thinking about a different clause. Perhaps he will reflect on that.
3.30 pm
I understand what my hon. Friend is trying to do in seeking to give the board sweeping powers if the OLC strays away from the regulatory objectives, but that power is too broad and sweeping and would result in the board’s becoming too closely involved in the day-to-day running of the OLC, which, as a separate non-departmental public body, is accountable to Parliament in the normal way.
New clauses 7 to 9 would give the board powers over the OLC that are similar to its powers over approved regulators and similar, to some extent, to the legal services ombudsman’s and Legal Services Complaints Commission’s current powers over approved regulators. However, the new clauses do not recognise that the OLC performs a different function from that of the approved regulators and that its relationship with the board is quite different. It would be a mistake to equate the OLC with the approved regulators in that way. Similarly, the board’s relationship with the OLC is not the same as the one that the legal services ombudsman and the LSCC have with the approved regulators: they are different and that is reflected in different powers—for example, the power to remove the chairman of the OLC from office.
Those proposals would set a lower threshold for intervention by the board, without the procedural safeguards required in relation to approved regulators and would make the board, in relation to the OLC alone, a regulator with the heaviest of touches and risk undermining the OLC’s independence.
The Bill makes no distinction between service and conduct complaints, because there is none. Irrespective of whether the complaint is about poor service, improper conduct or, very often, a mixture of the two, it is important that the ombudsman must decide whether the lawyer behaved in a way that makes it fair and reasonable for the complainant to receive redress and that the ombudsman works out how much should be paid.
If the ombudsman suspects that the lawyer has breached his or her professional rules, the details will be passed to the approved regulator to conduct the investigation, which can take place at the same time as the ombudsman considers redress. I hope that, having explained that and my concerns about my hon. Friend’s amendment, he will ask leave to withdraw it.
John Mann: I picked up my copy of the Bill from the top table and it contains clause 118(2)(a), (b) and (c). This matter ought to be contemplated in forthcoming days and, perhaps, reconsidered as the Bill progresses, because the question of investigative powers is important. I shall leave that with the Minister. Atthis stage, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 121 ordered to stand part of the Bill.
 
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