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General Committee Debates
Legal Services Bill [Lords]

Legal Services Bill [Lords]

The Committee consisted of the following Members:

Chairmen: Frank Cook, Sir Nicholas Winterton
Bailey, Mr. Adrian (West Bromwich, West) (Lab/Co-op)
Bellingham, Mr. Henry (North-West Norfolk) (Con)
Burrowes, Mr. David (Enfield, Southgate) (Con)
Djanogly, Mr. Jonathan (Huntingdon) (Con)
Ellwood, Mr. Tobias (Bournemouth, East) (Con)
Flello, Mr. Robert (Stoke-on-Trent, South) (Lab)
Foster, Mr. Michael (Worcester) (Lab)
Goodman, Helen (Bishop Auckland) (Lab)
Hemming, John (Birmingham, Yardley) (LD)
Hesford, Stephen (Wirral, West) (Lab)
Hughes, Simon (North Southwark and Bermondsey) (LD)
Jones, Mr. Kevan (North Durham) (Lab)
Kidney, Mr. David (Stafford) (Lab)
McCarthy, Kerry (Bristol, East) (Lab)
Mann, John (Bassetlaw) (Lab)
Neill, Robert (Bromley and Chislehurst) (Con)
Prentice, Bridget (Parliamentary Under-Secretary of State for Justice)
Hannah Weston, John Benger, Committee Clerks
† attended the Committee

Public Bill Committee

Tuesday 26 June 2007


[Frank Cook in the Chair]

Legal Services Bill [Lords]

10.30 am
The Chairman: Hon. Members will know that the Modernisation Committee has introduced a number of pilots. It seems that these days we in Westminster have more pilots than British Airways. The pilot for the Committee is the use of explanatory statements on amendments. Having introduced those measures for trial, it is important that we get some feedback on their efficacy or benefit. Members of the Committee will find before them a survey, which I encourage each and every hon. Member to complete sensibly to allow an assessment to be made, one way or another, of whether the pilot has been gainful.

Further written evidence to be reported to the House

LSB 02 Legal Services Ombudsman and Legal Services Complaints Commissioner for the Commons Public Committee for the Legal Services Bill

Clause 133

Operation of the ombusman scheme
John Mann (Bassetlaw) (Lab): I beg to move amendment No. 288, in clause 133, page 68, line 11, at end insert—
‘(c) The provision of an independent avenue of reviewfor complainants who consider that an approved regulator’s consideration of a regulatory issuewas inadequate or that its determination was unreasonable.’.
Having rescued my papers from the flooding of my constituency overnight, I come well prepared on the amendment.
The issue behind the amendment is the fact that the Bill provides consumer rights, but what happens if the regulatory system is not working effectively? How and where does one complain? What we have seen in the miners’ compensation scheme and the complaints in relation to that, and what we may well see from other complaints that have recently worked through the system, is the ombudsman’s ability to oversee and to direct and affect the individual consumer complaint. I fear that that ability will be so watered down in the Bill that it will become non-existent.
Many of the major victories for consumers have rightly taken place because of direction by the ombudsman—indeed, only last night, I was informed in writing of two further cases—and that service is enormously significant to thousands, and perhaps tens of thousands, of potential complainants.
One of the weaknesses with the regulatory system is that if the regulator makes its own rules and abides by them, it is easy to palm off complaints into the never-never. I will illustrate that fact with an example from a letter that I received early yesterday from the Bar Standards Board, to which I have made three sets of complaints. The board claims that it cannot deal with two of those because they are outwith its remit. They are generic complaints that potentially deal with thousands of people from my constituency, never mind from elsewhere, so where do my constituents go? The answer is that they will go round and round in a loopif there is no opportunity to take a case to an ombudsman with clear, precise powers.
There needs to be a robust, overseeing complaints procedure for the individual. The purpose of the amendment is to strengthen that process. I politely suggest to the Minister that, as things stand, it will be all too easy for the profession to say that a complaint is outwith its powers and thereby dismissed. That is precisely the problem that people were having in my constituency four years ago, and I want the Committee and the House to ensure that it does not affect my constituents or anyone else in future.
Simon Hughes (North Southwark and Bermondsey) (LD): The hon. Gentleman’s amendment raises an interesting issue that we are familiar with from constituency experience, which is that people are often willing to pursue an additional avenue of complaint if their first one has been unsuccessful. We all have many constituents who have already been to various people and come to us as their second or third port of call, and if we do not give those people what they see as a satisfactory remedy, often they may go to other politicians and pursue other established legal procedures. If it is a local authority matter, they will go to a councillor. They may then go to their MP, then to their MEP, and then to lawyers and so on.
I am sympathetic to the argument that having an internal regulatory procedure for the profession, which is what it is, should not preclude there being a general oversight outside, which is an ombudsman’s role. The difficulty is that there is a difference between dealing with public authorities for which we are used to having an ombudsman’s role, whether they relate to local government or central Government, and with authorities that are not public authorities.
I will be interested to hear the Minister, if she is good enough to do so, setting out the Government’s philosophy on the issue, as well as dealing with the individual points made by the hon. Gentleman in relation to his amendment. The Government need to address what the structures are for the public sector—I think that we know the answer to that—and for the professions. The same argument would apply for the medical, dental and nursing professions and others. In some senses, there are complaints procedures within the professions. Logically, ought there to be something that overarches that. If we had such a thing, should it have the power to direct or only to advise?
The Bill will not allow the Legal Services Board, the complainant or the ombudsman to challenge a decision of the approved regulator on an individual disciplinary case, but it will allow the Office for Legal Complaints to build up a comprehensive picture of how well the regulators are dealing with disciplinary matters and, if necessary, report that to the board.
That results from the power in clause 144, which allows the ombudsman to require a report to be made on any disciplinary matter that has come to the ombudsman’s notice as part of a complaint and has then been referred to the approved regulator. If that report gives cause for concern, the ombudsman can inform the board. The OLC will also be able to collate information from such reports, which, because they do not rely on a person alleging a failing in a handling of a disciplinary case, are likely to be far more common than complaints about disciplinary cases brought before the legal services ombudsman.
That will allow the OLC and the board to build up a picture of how well the disciplinary arrangements of each regulator are working. If the board has any concerns about that, it may take action against the approved regulator to ensure that it deals with disciplinary matters properly.
I return to my hon. Friend’s example of a scenario equivalent to the miners’ compensation issue. In such an example, if the ombudsman referred a large number of cases to the appropriate regulator for it to consider disciplinary action and the reports that the ombudsman received back suggested that the regulator was not taking appropriate action, I strongly suspect that the OLC would be straight off to the board, asking it to do something about that.
If the board agreed that the regulator was not taking appropriate action, it could use its powers, which are far wider and far weightier than those of the legal services ombudsman, to rectify that. Because the ombudsman has that ability to get a report on disciplinary matters and refer any concerns he might have to the board, there is that vital safeguard to ensure that disciplinary issues are dealt with properly. On that basis, I think that we have robust powers in the Bill to deal with the genuine and important issues that my hon. Friend raises. I therefore ask him to withdraw the amendment.
John Mann: Not for the first time, my reading of the Bill seems to be different from that of the Minister. The amendment is not aimed at disciplinary powers; it is aimed at consumer redress. I hear what has been said by the Minister and the hon. Member for North Southwark and Bermondsey, but I am not particularly bothered about serial protesters who go round the houses looking for a way of venting their frustration and anger at the system. Whether they are right or wrong, we all get visited by people of that kind. In my area, they seem to come to me first; in other areas, they perhaps go to their Member of Parliament last. That is not my concern in this matter. I am concerned about decent, ordinary people who have never formally complained about anything in their lives, who do not realise that there is a complaints procedure in place, who have never met their solicitor and may not even know what a solicitor is.
Those people do not realise that they have been done over, or that a barrister has been involved—they do not know what a barrister is. They do not know about the counsel’s opinion that closed down their case, or who asked for it, who is paying for it, or who has been contracted to pay for it. They do not have a clue about any of that. I am dealing with such people in large numbers—not just miners, but a range of other people. Last night, a case involving an engineering worker was referred to me; it has nothing to do with the mining industry, but the principle is the same. Those people have not had the opportunity to make a proper complaint.
The legal profession says, “Ah, you needed to know that you have to complain within a set period about a solicitor or a barrister who you have never met and who you did not know existed.” Who on earth is going to have any consumer rights if they are in that position?
Mr. Kevan Jones (North Durham) (Lab): Does my hon. Friend agree that information is sometimes given to solicitors? I give the example of Watson Burton in Newcastle, which has signed an agreement with P&R Associates. When clients complained about money being spent on such a claims handling company, Watson Burton claimed that it was legally obliged to pay that money. Therefore, the advice that it is giving its clients is that the company would somehow be penalised if it did not make such payments.
John Mann: My hon. Friend is right. The legal profession uses these threats against people—in that case, precisely to feather its own nest, and disgracefully so. Were disciplinary matters involved? Such issues, however, are quite separate. We will come to the disciplinary matters later, and the fact that, in the case of Watson Burton, the issue was kept private and confidential until we revealed it to the outside world, which is disgraceful in itself. That, however, is not the point of the amendment.
I am attempting to beef up the right of the consumer who is dealing with a profession that he has not dealt with before, and who does not know anything about complaints procedure. If, in that minority of cases, something has been done wrong, it is important to ensure that the claimants are not out-manoeuvred by the precise detail put in by the regulators. That happened to me yesterday in a letter from the Bar Standards Board, which said that two thirds of the cases that I am trying to look at are out of order before they have even gone in. How does anyone know that? They have not been investigated. Where are the consumer rights there?
Mr. David Burrowes (Enfield, Southgate) (Con) rose—
John Mann: I will be happy to hear from the hon. Member for Enfield, Southgate once I have introduced the other amendments—I want to curtail the discussion. I might be right or wrong about whether the amendment would do what I want it to, because I do not have a battalion of civil servants advising me. I am happy to leave it with the Minister to contemplate, but the issue will not go away. It will come back on Report.
10.45 am
The powers for the ombudsman to overturn a consumer decision wrongly taken by a regulator, which has looked at its own rules and been restricted by them, must be in the Bill, because the public interest in some of those cases is sufficiently strong that the decision should be sent back. That is what I am attempting to do. Reading the Bill, it seems to me that there is a danger that the consumer interest for vulnerable people will be weakened. I am using my definition of vulnerable people—those who do not have great knowledge of the legal profession.
I suggest to the Minister that that goes against the interests of the profession. The decent majority of the profession, who write to me in large numbers, day by day, after each sitting of the Committee, are saying, “We support what you are saying because we are the decent majority whose reputation has been tarnished by the minority.” The way to deal with that is a strengthened system.
I hear what the Minister has said and will give her the benefit of the doubt on the technical detail because the amendment might or might not do what I intend. I suggest to her, however, that it would, and I hope she will consider it, but something like it must be added to the Bill before it is passed. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
John Mann: I beg to move amendment No. 289, in clause 133, page 68, line 17, leave out ‘may’ and insert ‘must’.
The Chairman: With this it will be convenient to discuss the following amendments: No. 290, in clause 133, page 68, line 18, leave out ‘specified’ and insert ‘all’.
No. 291, in clause 133, page 68, line 18, at end insert
‘in which he considers it reasonable to do so’.
No. 292, in clause 133, page 68, line 22, at end insert
‘only by the Chief Ombudsman or an assistant ombudsman.’.
John Mann: Again, the amendments would strengthen the Bill. I will home in on the key consideration of time limits; it is fundamental.
When elected an MP, I was an amateur in these matters and had no idea what time limits existed for complaints to the legal profession. I had not been involved in taking any complaints forward and, strangely, having talked to my friends and associates, I found that none of them had ever made any complaints or knew about the processes. I talked to solicitors and they were not particularly clear about the processes. They had not had any complaints made against them because they do run-of-the-mill work with which people are generally happy, and often very happy. I had to root around to get any idea of what was going on. It is probably fair to say that in getting to know the law, trial and error succeeded better than a well defined campaign or strategy.
I put it to the Committee that my constituents are, if anything, probably slightly less well informed and slightly less adept than me at finding out how systems work and what can be done. Therefore, how will they know that they have a complaint when they are not aware of what the solicitor or the barrister has done, and do not know what mistakes have been made? If, for example, half an industrial disease claim has not been put in, how will they know? Even if they have the medical records, they are not experts who can assess them—that is what a solicitor or barrister is paid for. How can they know whether something has gone wrong?
The hon. Member for North Southwark and Bermondsey has vanished from the room, but I will rebut his point about serial complainants anyway. The irony is that it is the serial complainants who will know the time limits, will work the system and might not even have a real complaint at all. Their complaint may well be about the outcome rather than the process, but what if the process is wrong? For large numbers of my constituents, it is arguable what the time limit is because they are not clear about whether their claim has been completed or even dropped. If that was ever put to the test, it would be a case in law of arguing what the precise time limit is. I have had to make those arguments.
My experience of such disputes when I first took complaints to the Law Society was of repeatedly getting knocked back. The role of the ombudsman in looking again at the process was vital, giving me and my constituents a second chance to present the case, and every time that the ombudsman has been consulted, he has ruled in favour of my constituents, without exception. That suggests to me not that there is a bias, but—quite the opposite—that the case was good but had not been looked at properly in advance.
Therefore, I put these very modest proposals to the Minister. She is on a high today, because this is a time when things are on the up in the Government. Here is a chance for the Government to strengthen their resolve on the Bill, which must be done, one way or another, because there must be an opportunity to ensure that the regulator has to regulate and that, if the regulator gets it wrong, the consumer has the proper ability to challenge the decision—not least in respect of cases that we have dealt with—through their MP.
Bridget Prentice: My hon. Friend must know things that I certainly do not and I have my phone switched off, as you wisely suggested, Mr. Cook. Nevertheless, I find it difficult to have to stand up and resist the amendments, because my hon. Friend argued for them so forcefully and so well, on behalf of not just his own constituents, but consumers around the country.
I am not particularly convinced on either point. One reason for that is that we rarely use “must” instead of “may” in the Bill and, on this occasion, I am content to leave the matter to the OLC’s consideration when it draws up the rules. It is highly likely that the OLC will want to make rules that allow the ombudsman to extend the time limits in certain circumstances. I think that the OLC would see my hon. Friend’s examples as reasonable in those cases. That is appropriate, fair and flexible, but it is a matter for the OLC.
I am also not entirely convinced on the second issue, because the matter would be left to the ombudsman to decide in every case. That would preclude what the Bill tries to do, which is give clarity or guidance in the rules about when the time limits could be extended. That could act against consumers, as well as sometimes being in their favour.
My hon. Friend said in a previous debate that a lot of consumers do not know how to complain or who to go to. That is certainly the case at the moment. One of the points of the Bill is to make that clearer and simpler so that people know where to go. Therefore, it is better to make the position clear in the clause so that consumers will know whether their complaint is likely to be entertained. That does not mean that there cannot be any discretion in the rules.
Simon Hughes: I am listening carefully to the Minister and it seems to me that she has not answered the point made by the hon. Member for Bassetlaw. If there is an injustice, the fact that someone did not know that they had to complain to the regulator within a set time will not be remedied by the answer, “I am sorry, but you are too late.” There is a difference in damages claims in which there is a good argument for a limit—memories fade and the evidence suffers—and complaints about process. Such complaints should be able to be reopened in the way that other matters are—by application to the courts.
Bridget Prentice: I do not disagree with the hon. Gentleman’s point. It is important to recognise that it may be some time before an individual knows that something has gone wrong and that they want to complain, but the rules deal with the issue of time limits. They provide that the time runs from the moment the complainant becomes aware that something has gone wrong and they need to make a complaint, rather than from the day that they walk through the solicitor’s door. That is fair and reasonable, and the rules allow for it to happen. I hope that that gives my hon. Friend the Member for Bassetlaw some reassurance, and on that basis I ask him to withdraw his amendment.
Amendment No. 292 addresses the dismissal of complaints by the ombudsman alone. Again, I agree entirely with the intention of that amendment. In fact, if my hon. Friend looks further into the Bill, he will see that the function of dismissing complaints summarily cannot be delegated by the ombudsman; it has to be dealt with by him. Therefore, that amendment is unnecessary because we cover those matters inclause 134. On that basis, I ask my hon. Friend not to press the amendment.
John Mann: When I listen to the Minister and look at the sceptical faces of official Opposition Members, I see that there is no sympathy for anything that will benefit the consumer. We must make a tactical decision on the amendments, which I am contemplating as I think over the Minister’s response.
The issue is not going to disappear. I have a significant number of constituents who are unhappy with the time taken by their solicitor or the fact that they did not realise that they could complain. Some of them—the ones with the solicitors Raleys, for example—are unhappy that their complaints have been outstanding for as long as three years. Out of the blue, a delegation came to see me on that matter yesterday, and I attempted to reassure them, but there are rumblings. A large delegation might be determining to descend before the Bill becomes law to ensure that it is toughened up.
Time limits are fundamental, and I merely repeat my point for the Minister so that she can think through how the matter can be best handled. If people do not know that there is a complaints procedure, how can they know about the specifics within it? Clearly, there should be some constraints—that is fair and reasonable—but there must be an opportunity for those not aware of the system not to be caught out by what are generally the reasonable constraints within it.
11 am
The whole problem with the tone of much of the discussion, not least in the House of Lords but also here, is the idea that well-informed consumers are represented in their tens of millions by consumer bodies and that, if everyone is kept happy at the table in some way, all will be fine. As I watched the water flowing past my house at the weekend, I took the opportunity to consider the consumer panel of the Bar Council. All the great and the good are on it, including consumers’ bodies. However, I could not find anyone who had identified the problem of barristers and the cases of textile workers and launched an investigation into it, just as earlier I could not find anyone from the professional bodies who had raised the issue of industrial deafness and the scandal that solicitors were dealing with claims over the telephone. While all the various pressure groups and professional bodies are important, a mass of consumers do not fall within any category and are not represented in any way because they are not the informed consumer. The danger with the Bill is that it is for the informed consumer who writes for the informed consumer.
I intend one way or another to ensure that the Bill is strengthened so that it is for the uninformed consumer who has been badly done over, too. That is the purpose of the amendment. I shall leave it to the Minister to contemplate whether she can come up with a better alternative. There does need to be some strengthening in such areas before the Bill becomes law. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
John Mann: I beg to move amendment No. 293, in clause 133, page 68, line 25, at end insert
‘but not, for the avoidance of any doubt, to an approved regulator.’.
The Chairman: With this it will be convenient to discuss new clause 17—Handling of complaints by an external regulator
‘(1) The OLC may direct that part or all of a specific complaint within the jurisdiction of the ombudsman scheme shall be determined by a relevant external regulator where it concludes that—
(a) the complaint relates to matters which would more efficiently, cost effectively or in the interests of the maintenance of justice be determined by a relevant external regulator; or
(b) the matters which give rise to the complaint cannot be divided into service and misconduct matters without undue duplication of process, provision of information or in the interests of justice should be determined by an external regulator; and
(c) the complainant, authorised person or either will not be unduly prejudiced by the determination of the complaint by the relevant external regulator.
(2) Any such complaints the OLC refers to a relevant external regulator for determination shall remain within the jurisdiction of the ombudsman scheme.
(3) The OLC shall be free to vary or cancel any such direction made under subsection (1) if it considers that the complaint is being handled in a manner inconsistent with the provisions of the ombudsman scheme.
(4) The OLC shall remain entitled to award compensation in addition to or instead of any amount awarded by the relevant external regulator in respect of the complaint if it determines that to do so would be in the interests of justice and consistent with the provisions of the ombudsman scheme.
(5) The OLC shall not direct that a complaint is to be determined by a relevant external regulator unless it is satisfied—
(a) that the external regulator has agreed to be subject to the jurisdiction of the OLC for the purposes of handling the complaint; and
(b) that the external regulator’s complaint handling and relevant associated processes are appropriate for the purposes of the resolution of the complaint.
(6) For the purpose of this section “external regulator” means a person other than an approved regulator who exercises regulatory functions in relation to a particular description of persons with a view to ensuring compliance with statutory or non-statutory rules by those persons.’.
John Mann: My aim is to ensure that matters are not batted backwards inside the system. Whoever is regulating, it is important that there is clarity. I tabled this modest amendment to clarify the position.
Mr. Henry Bellingham (North-West Norfolk) (Con): It is a pleasure to be with you this morning, Mr. Cook. It is also a pleasure to see the Minister and her team. I am certainly intrigued as to why her colleagues are clustered far away from her. She is obviously her usual fragrant self this morning, although perhaps they regard her as an isolated Blairite on the penultimate day of the great man’s reign so they are distancing themselves from her.
The Chairman: Order. Pertinence, please.
Mr. Bellingham: However, I hope very much that we shall have a constructive morning’s work.
We will come to hybrid complaints when we reach the Government amendments on clauses 143 and 156, where the complaint concerns not just misconduct matters but also service matters. Where the two are intertwined, it can be very difficult to reach a conclusion in the interests of all concerned. Therefore, there may be occasions when the handling of complaints by an external regulator makes a great deal of sense. New clause 17 has to be read in conjunction with the Lords’ amendments to new clause 144.
Bridget Prentice: I happen to be wearing a rather expensive perfume today, so I am deeply disappointed that the hon. Member for North-West Norfolk feels that it is not appropriate or that my hon. Friends are suffering as a result.
My hon. Friend the Member for Bassetlaw, whose amendment I will take first, knows that my intention is to reverse the amendments made in the other place that allow complaints handling to be delegated to the approved regulator. I want the Committee to be in absolutely no doubt that ombudsmen will be prevented from sending any complaint to an approved regulator for determination.
Clause 133(3)(b) simply allows an ombudsman, with the consent of the complainant, to refer the complaint to another body, to be determined there instead. We expect that clause to be used when a person’s complaint to the Office for Legal Complaints really ought to be dealt with under another ombudsman scheme. For instance, when a person complains to the Office for Legal Complaints about the sale by their lawyer of a financial product, such as a mortgage or insurance policy, but it transpires that the lawyer is operating under separate authorisation from the Financial Services Authority and would be subject to the FSA’s regulations, it would be appropriate for the OLC to transfer that complaint to the Financial Ombudsman Service, which would be better equipped to deal with it. I must emphasise that a transfer can be done only with the consent of the complainant and will not—cannot, by virtue of clause 158—be used to allow approved regulators to determine complaints. On that basis and that of the debate that we will have about the reversal of those amendments made in the other place, I hope that my hon. Friend will be able to withdraw his amendment.
I understand the intention behind new clause 17. I know that it is important that the most experienced and appropriate complaints organisations deal with the complaint. Again, if a complaint substantially relates to a financial service, the best ombudsman scheme to deal with that will almost certainly be the Financial Ombudsman Service.
Once ABSs arrive, there will be potential for complaints to the OLC that are not strictly about legal services, or might be about issues outside the ombudsman scheme in the Bill. However, because we appreciate the importance of that, there is specific provision—clause 133(3)(b)—that allows the ombudsman to refer the complaint, with the complainant’s consent, to the most appropriate body. The scheme rules will set out the arrangements under which that will operate.
The new clause envisages that the OLC will retain a role in overseeing a complaint passed to another body. I am not convinced that that is necessary. When another scheme is more appropriate for dealing with a complaint, I would imagine that the OLC would want to pass that complaint on fully, without retaining any control over the determination. On the other hand, where the matter of the complaint lends itself to the scheme within this Bill, but the ombudsman dealing with the complaint needs expertise from elsewhere in order to resolve it, he or she can make arrangementsto seek assistance from that other body underschedule 15. That would allow the complaint to be resolved within this system while using expertise from elsewhere. All of that can be set out in the scheme rules.
I stress that we recognise the point that the amendment makes. The Bill already allows for complaints to be transferred appropriately and therefore, although the amendment makes a worthwhile point, I am not convinced that it adds anything to the Bill. I therefore ask the hon. Gentleman to withdraw it.
John Mann: In this instance, I am happy with the Minister’s response and I am delighted to ask leave of the Committee to withdraw this amendment.
Amendment, by leave, withdrawn.
Bridget Prentice: I beg to move amendment No. 8, in clause 133, page 68, line 42, leave out paragraph (i).
The Chairman: With this it will be convenient to discuss the following: Amendment No. 228, in clause 133, page 68, line 44, leave out from ‘complaint’ to end of line 4 on page 69.
Amendment No. 229, in clause 133, page 69, line 5, leave out paragraph (j).
Government amendments Nos. 9 and 10.
Amendment No. 231, in clause 136, page 70, line 39, leave out paragraphs (a) to (c) and insert—
‘(a) the complaint against the respondent is determined or otherwise resolved at least partially in favour of the complaint; or
(b) in the ombudsman’s opinion the respondent failed to deal with the complaint in accordance with the regulatory arrangements which the approved regulator has made under section 112.’.
Amendment No. 232, in clause 136, page 71, line 5, leave out subsections (3) and (4).
Government amendments Nos. 11 and 12.
Bridget Prentice: The amendments made in the other place allowing the OLC to charge case fees are over-restrictive and unfair, and I therefore seek to reverse them. I have particular difficulty with subsections (2) and (3) of clause 136, which set out the circumstances in which, even though a complaint has been upheld, the OLC will be required to reduce or waive a charge. It is completely unacceptable to say in primary legislation that charges would be required to be waived or reduced just because the lawyer was acting pro bono or the charge might be relatively large compared with the amount paid for the legal services.
The amendment made in the other place takes no account of the effect of the lawyer’s actions on the consumer or the reasons for the complaint being before the ombudsman at all and is more interested in the effect on the lawyer. I am sure that my hon. Friends would agree that that is the wrong way around.
Robert Neill (Bromley and Chislehurst) (Con): I understand the Minister’s logic, but does she concede that, if that is right, there should not be any circumstance in which a lawyer of any branch of the profession who has been cleared of a complaint should be expected to pay either?
Bridget Prentice: We have discussed this part of the Bill over some time. I have sympathy with the proposition that where a person is entirely innocent they should not have to pay, but the clause allows for a charge to be waived or reduced. So, if a complaint that is vexatious—or even if it is a genuine complaint but the lawyer, through proper in-house complaints systems had not only dealt with the complaint butwith the original situation properly—reaches the ombudsman, it is perfectly within the power of the Office for Legal Complaints to waive any charge. The amendment made in the other place did not take any account of the way that lawyers can behave and the effects of that on consumers.
I also have difficulty with the proposition that charges should always be waived or refunded where a complaint is upheld in the complainant’s favour. It is fine where the complaint turns out to be completely unfounded and the respondent has done everything properly to co-operate with the OLC, but that is not the effect of the amendments made in the other place.
11.15 pm
The way that the Lords amendment is worded is that even when a respondent has been unco-operative, uncommunicative, and could have resolved the matter without it going to the OLC, the OLC will not be able to impose a charge to assist with the cost of handling that complaint, which should never have reached it. I do not see how that sends the right message to potential respondents or consumers.
The provisions on charges, before they were amended in the other place, already allowed for a fair system to be set up. That is why the clause specifically stated that the rules setting out the charges could provide for the OLC to reduce or waive them, set different charges for different stages of the proceedings on a complaint, or provide for charges to be refunded in specific circumstances.
The benefit of the provisions before they were amended was that they allowed for all those issues to be addressed in the scheme rules. That gives operational flexibility and the opportunity to adapt and change over time, rather than being restricted permanently in primary legislation.
Nowhere did they say how the charging scheme would work. Therefore, all those who are worried about it acting unfairly and disproportionately should wait before making a grand statement until they have had a chance to comment on the draft rules, which are bound by the Human Rights Act 1998 and are compatible with the European convention on human rights.
The rules setting out the scheme of charges require the consent of the board and the Lord Chancellor. They have to be made in line with the regulatory objectives, including the public interest. There is also a requirement under clause 206 that the scheme rules are subject to consultation. Ultimately, those rules will be open to challenge in the courts. That ought to be enough. It is on that basis that I ask the Committee to support me in reversing the amendments made in the other place.
Mr. Bellingham: I am grateful to the Minister for explaining why the Government are trying to remove the amendments made in the House of Lords after important debates in the other place in Grand Committee and on Report. The Minister has given us an interesting summary on how she sees the situation, why she feels that the Government amendments have to be made this morning and why the amendments in the Lords do not stack up.
However, the Opposition are not very happy with what she has said. What the Lords put in was fair, reasonable and sensible. A key principle is at stake. People who have been exonerated following an investigation should not be penalised for being found blameless. That to me is a pretty fundamental point. That point was made again and again in the House of Lords. I would also underline the point by saying that Clementi made it very clear in his report that payment should be made by those against whom a complaint has been upheld.
If Government amendments Nos. 8 to 12 are agreed, the principle laid down by Clementi would be contravened. Eminent Members of the House of Lords spoke at some length on the issue. I will quote from two noble Lords who spoke in the debate. One was Lord Neill of Bladen, who on Second Reading said:
“It cannot stand up to any outside scrutiny that a man who has a false charge made against him has to pay [for] the costs of the proceedings.”—[Official Report, House of Lords, 6 December 2006; Vol. Volume Number, c. 1185.]
Lord Neill is a very distinguished individual indeed.
I also have a quote from Baroness Butler-Sloss in the Grand Committee debate of 21 February when she said:
“The idea that unfounded complaints, some of which last for anything up to 10 years after the case is completed, should be met by the respondent having to pay is quite unjust.”—[Official Report, House of Lords, 21 February 2007; Vol. 689, c. 1115.]
That clearly sums up our concerns.
I should like to add a few points, and the first concerns younger members of the profession, on the solicitors’ and the barristers’ sides of the law. If the Government amendments are agreed to and the Bill reverts to its original form, a significant trend could emerge whereby there is a deterrent to younger members of the profession who want to practise in those areas where unjustified complaints are often likely to be made. I am particularly thinking of criminal and family law cases, for example. We all know examples from our constituencies where people have fought and lost a case, but have nothing to lose by complaining.
A couple of cases spring to my mind immediately. One was that of a policeman charged with corrupt practices who is a 100 per cent. convinced that he is innocent. He fought his case through the Crown court, the Old Bailey and the Appeal Court and now seeks leave to take the case to the House of Lords. He feels very strongly that he did not get the best legal advice and that his barrister let him down. He has nothing at all to lose by complaining about the legal team who represented him.
I have another case, which is very sad, of a constituent who was accused of child abuse in incidents that took place many years ago who also claims his innocence. I believe that his legal team did their level best on his behalf but, again, his sense of grievance and outright anger and distress is enormous, so of course he will complain against everyone in sight.
Again, Baroness Butler-Sloss, a very wise person, speaking in the House of Lords, said:
“Family cases are highly emotional and very unhappy for those who engage in them. It is almost impossible to be objective about your own family problem. Whether in public law or in private law, the distress caused to litigants is enormous. Almost all litigants go away dissatisfied, most of them with the judge, which is fair enough, and many of them with the lawyer—the solicitor as well as the barrister—who represented them.”—[Official Report, House of Lords, 21 February 2007; Vol. 689,c. 1115.]
That sums up my concern. I am worried about the onus and cost that that would put on some of the younger members of the profession, particularly those who will be going into those areas of law where we want young practitioners.
I understand why the Minister is keen to bring in a simple and straightforward system, which is easy follow. I also understand why the Government are keen to replicate the Financial Ombudsman Service scheme—there is a standard charge for all respondents in that scheme, and one can take the complaint and know that at the end of the day the respondent will have to pay. However, financial services are very different from legal services. A provider of financial services can always say, “Look, I am not going to take your business,” and tell the person to take a running jump, but when it comes to the law, one cannot do that. Many of my colleagues understand the cab rank rule, which I remember from when I was at the Bar, whereby the brief must be taken even if one knows that the previous five or six barristers to have acted on behalf of the client have been the subject of complaint. In fact, the barrister taking the brief is doomed unless he can perform an extraordinary miracle and end up winning the case.
I understand why the Government are keen and anxious to bring in a simple and straightforward system, which everyone can understand, but surely that should not be at the expense of the innocent, punishing people who might be in the firing line. The law of unintended consequences comes into play, because the Government amendments could lead to more complaints taking place; there could be a proliferation of complaints, because the complainers have nothing to lose. I also submit that it might discourage practitioners from operating proper in-house complaint resolution procedures. What about the actual costs? What about the resources of the OLC? Such issues are causing us great concern. The Government are trying to put in place a simple, straightforward system. I understand exactly why they want to do that, but it should not be at the expense of justice and fairness, nor should it have the unintended consequences to which I have alluded and which will undoubtedly ensue if the Government’s amendments are accepted today. That is why Opposition Members feel strongly that the Government have it wrong and why we shall vote against the amendments.
John Mann: That is the first time that I have seen the hon. Member for North-West Norfolk so animated and enthused. Something must be striking hard at the vested interests of his professional colleagues. I have heard the Minister make the best of proposals and the most outrageous of cases put against them. I do not know how many complaints the hon. Gentleman advises on and insists on taking forward, but I am as happy to say to constituents of mine that they have no valid complaint and will receive no assistance other than my writing to a regulatory body and saying that, as I am to take forward a valid complaint. I take such action, and I lose a few votes each time because those constituents feel unrepresented, but that is the nature of the job. If people have a valid complaint, they are assisted. However, a clearly spurious complaint made by someone trying to vent their frustration destroys the credibility of the honourable complainant. That is fairly fundamental.
Mr. Jones: Does my hon. Friend agree that, if someone puts forward a frivolous complaint to the ombudsman, it does not reach the stage to which reference has been made, but is thrown out at the beginning?
John Mann: Not only are such complaints thrown out at the beginning, but cases that are not frivolous are sometimes thrown out at the beginning. People have to persevere strongly even to get valid complaints investigated. The balance of assumption is towards the profession, not against it. That is probably a rational way in which to do business. I am not over-complaining about it. The complaints that I receive are about advice, information and assistance for people taking matters forward. There is almost a working presumption that the profession is honourable rather than dishonourable. Sometimes, with the most scandalous of professionals, that gives an inbuilt bias towards the presumption of probity and honesty that may not be 100 per cent. there.
The most extraordinary outburst from the hon. Member for North-West Norfolk was completely out of context. It is totally irrelevant as such complaints would get nowhere. Arguments put by vested interests include the fact that a complaint cannot be valid any more because the complainant is dead. Yet the complainant is dead because of the industrial disease that he had contracted. When challenged, some solicitors have not been too keen to put such matters in writing, but have dared to suggest that a complaint should be dropped because the person for whom justice is being fought is dead. Well, that is not usually the view of the person’s family. They believe that, if a fight for justice has been going on, it is right and proper that it should be continued. However, that is one of the arguments put forward.
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Let us consider the way in which some of the respondents to complaints deal with such matters. In case there is any misunderstanding, I shall give some examples. Graysons solicitors have repeatedly breached the Data Protection Act by passing information to a third party in the hope and presumption that it will persuade the complainant to drop the complaint. That has happened on a number of occasions and it is only by threatening them with the Data Protection Act that their open and upfront public breaching of the law has stopped.
Or there is the case of Thompsons solicitors, the biggest firm of solicitors dealing with industrial injury and disease claims in the country. They deducted money directly from one of my constituents—not to a third party, but into their own coffers—and then they had the gall to deny it. I had to cite the individual case to prove that they had made direct deductions and then badmouthed unnamed hon. Members in briefings to organisations such as the TUC, suggesting that we do not know what we are talking about and we do not have the facts right, when the facts that we have are document based and proven and have won the case when they have been put before the regulatory body.
Another case is that of Robinson King solicitors, who suggest that they cannot afford to pay. In cahoots with the scandalous claims handler Union and General Services, they have taken large amounts of money off my constituents and others—£2,000 to £3,000 from people who are dying of emphysema. Their defence for not making such payments is that they cannot afford them. But where has the money gone and what have they been doing? And if they cannot afford it, that is tough, because my constituents cannot afford not to have the money that is duly theirs. Those are the kind of people that we are dealing with.
I answered a case against Beresfords, which states unequivocally in its defence, “We doubt that the individual has a complaint and has made a complaint”. When I rang the gentleman up to confirm whether he still has a complaint, strangely enough, he has, and it was he who made it. But that is part of their defence. These are weasel words from solicitors, trying to abdicate their responsibility to pay out to people whom they should never have misrepresented in the past. The suggestion that my constituents, who have never dealt with the legal profession before, should then face the threat of having to pay for a case resulting a complaint that they have made is a scandal. It is unbelievable in the context of what has been going on.
I commend the Government in reversing this outrageous proposal from the House of Lords which came from those with vested interests and who should never have had the gall to put it there in the first place.
Simon Hughes: This is obviously a heated issue. I believe that the debate in the Lords was described as one of the most lively and passionate. In this group, amendments Nos. 228, 229, 231, 232 are a set just as the Minister’s amendments Nos. 8, 9, 10, 11 and 12 are a set. They relate to the same issues and to clauses 133, 134, and 136. They are on the same subject of charges.
The amendment from the Lords was carried by a significant majority. It did not sneak through by just one or two votes; there was a coalition of Cross-Bench peers and peers from the two major opposition parties—I am not sure whether there was Labour support as well.
Mr. Bellingham: As the hon. Member for North Southwark and Bermondsey rightly points out, the vote was contents 183, not contents 127. I have counted a substantial number of Labour peers who were in the contents list and supported the amendments put into the Bill—there must have been at least a dozen or so.
John Mann: How many of them were lawyers?
Simon Hughes: I am grateful to the hon. Member for North-West Norfolk. In answer to the hon. Member for Bassetlaw, I suspect that there were some lawyers. He can do the adding up from the figures. The more interesting question is how many of them were not lawyers.
The parts of the Bill that the Minister wants to change state that—[ Interruption. ] To explain the amendments, it is helpful to read these things so that people can see what the proposed changes are. Clause 133 states:
“Scheme rules made under subsection (1) may (among other things) make provision—
(i) for an ombudsman to award costs against the respondentin favour of the OLC for the purpose of providing a contribution to resources deployed in dealing with the complaint if—”.
There are then two qualifications, which are that
“(i) the complaint against the respondent is determined or otherwise resolved substantially in favour of the complainant, or
(ii) in the ombudsman’s opinion the respondent failed to deal with the complaint in accordance with the regulatory arrangements which the relevant approved regulator has made under section 112”.
Paragraph (j), which is the other part of the proposal, states that there can be provision
“for an ombudsman to award costs against the complainant or the respondent in favour of the OLC for the purpose of providing a contribution to resources deployed in dealing with the complaint, if in the ombudsman’s opinion that person acted so unreasonably in relation to the complaint that it is appropriate in all the circumstances of the case to make such an award”.
That is the situation now, after amendments were made in the Lords.
Clause 136 states:
“The rules must provide for the OLC to reduce or waive a charge in circumstances where—
(a) the complaint relates to activity undertaken otherwise than for reward,”—
that is about pro bono work—
(b) it appears to the OLC that the amount of a charge, unless reduced or waived, would be disproportionate having regard to the gravity or nature of the complaint, the value (if any) of the subject matter of the activity to which it relates, or the consideration payable for the services used by the complainant which consist of or include that activity,”—
that is about a disproportionate penalty—
(c) it appears to the OLC that the amount of a charge, unless reduced or waived, would cause the respondent undue hardship.”
There are three circumstances in which the law would allow the payment to be waived.
The amendments that stand in my name and that of my hon. Friend the Member for Birmingham, Yardley effectively suggest a compromise way forward. I will be grateful if the Minister considers them during her winding-up speech, because I am seeking to take some of the heat, which we have already encountered, out of the debate by coming up with something that might, in general, meet the concerns on both sides of the Committee.
Amendment No. 228 would take out clause 133(3)(i)(i) and (ii), and amendment No. 229 would take outparagraph (j). Amendment No. 231 would take out clause 136(2)(a) to (c) and insert the alternative, which is on the amendment paper. Lastly, amendment No. 232 would leave out clause 136(3) and (4). Those amendments would replace what the Government have suggested in the two relevant clauses.
I will explain the thinking behind the changes and hope that the Minister can be positive about them. The argument is that if the OLC is permitted to award costs against complainants, the prospect of paying costs might put people off making the complaints in the first place. The system is open to abuse by unscrupulous lawyers who might convince people—in the sort of case raised by the hon. Member for Bassetlaw—not to pursue their claim on the grounds that they could face costs if they lost.
We have heard about how the Bill was amended in the Lords. However, it is perfectly reasonable to argue that those changes will not necessarily prevent the abuse. They are also unnecessary because, as we touched on earlier, the OLC could decide not to pursue an investigation if it thought a complaint was frivolous or vexatious, and therefore only marginal costs would be incurred. It acts as a check in that the OLC could say, “We aren’t going to look at it at all,” and therefore there would be no great expense incurred in that context. We have a power ready to deal with unreasonable behaviour, by saying, “No, that is nonsense, you are back for the third time, fourth, or fifth time.”
I think, and the hon. Member for North-West Norfolk hinted at this, that the Financial Ombudsman Service is the only ombudsman scheme that can award costs against a complainant. However, I am told that the ombudsman has never used that power, which suggests that it is unnecessary. I stand to be corrected by the Minister, but that is my information. I hope that our amendments would at least correct the provision dealing with something that has not actually happened, and may be only a theoretical situation.
Our amendments would require the OLC to set rules enabling charges payable by respondents to be reduced or waived. The amendments suggest that the complaint is resolved in the complainant’s favour, at least in part, if there is no satisfactory in-house resolution. There might be other relevant reasons for why the OLC thinks that it should use this power. I accept that amendment No. 231 would take out the specific provision that limits it to pro bono work, which refers
“to the gravity or nature of the complaint”
and the causing of hardship. Therefore, that provision does not tie it down as much as the amendment would.
Going back one step further, the wording in the original Bill—again I stand to be corrected, but this is how I recollect it—enabled the OLC to reduce or waive charges payable, but did not set out any circumstances in which that should apply. There was some satisfaction with that approach among consumer organisations, and there is an understandable willingness to have more flexibility than there is currently in the Bill. However, it important to have clear principles so that people know what the circumstances are in which they might be liable to pay up.
I also understand that the general view presented to the Minister by consumer organisations is that it would be unfair for respondents—solicitors or lawyers—to pay charges once they had been exonerated on the main issues, and the complaint had been adequately considered in-house. Therefore, the amendments retain the wording of those made in the Lords, with the exception that instead of “resolved substantially”, there are the words “resolved at least partially”. That means that lawyers would be liable to pay some costs if they are at any fault, and addresses the problem that the phrase “resolved substantially” might be interpreted inconsistently or could be difficult to prove. I hope that that deals with the major concern that lawyers would not be liable if found to be at fault.
The second condition relating to in-house complaint arrangements is obviously important if we want to ensure that the arrangement is satisfactory, without having to go to the external ombudsman. A complaint that is rejected by the OLC will not necessary have been made without justification. For example, many complaints arise because firms are not very good at explaining things to their clients, and the true state of affairs comes to light only once the ombudsman gets involved. It is important to give lawyers an incentiveto resolve matters in-house where possible, ratherthan relying on an appeal outside the system. The flexibility to reduce, refund or waive charges in circumstances apart from the two mentioned, is provided by clause 136(5).
Work carried out on a pro bono basis should not, in our view, be exempt from charges. If, as the Minister hinted, respondents were exempt from paying charges for lower-value complaints, that could exclude many areas of legal work such as drafting a will, which we talked about earlier. Therefore, it might not be possible for simple work to be the subject of complaint and payment, and that would clearly be unsatisfactory. The hardship provisions might not be necessary; I am informed, and it certainly should be the case, that all lawyers carry indemnity insurance.
The relatively small administrative costs charged by the OLC for handling a complaint are unlikely to be a significant deterrent. I suggest a middle way, although that is not always my position. I hope that the Minister will be positive, but I sense that in any event the issue will return on Report. If we could get agreement between the parties represented on the Committee and on the arguments that have been bouncing around, that would be the best way forward, but we are clearly not there yet. I hope that the Minister will be supportive of an attempt to get us there at the end of the debate.
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Mr. Jones: I support the Minister on this issue. The amendment gets to the heart of what she is trying to put forward in the Bill; it is about protecting the consumer.
Like my hon. Friend the Member for Bassetlaw, I come at the Bill after dealing with numerous complaints about how a lot of my constituents were dealt with in the miners compensation scheme. Clearly, the other place and Conservative Members come at it from the position that all lawyers are honourable and true, and act in the best interest of their clients. If that were the case, it would be okay, but unfortunately they do not.
The Law Society has moved a huge distance in the last few years. When my hon. Friend and I first got involved, there was a reluctance in the society about properly dealing with complaints, and not just those from Members of Parliament. People came forward who were not used to dealing with solicitors, and they were asked why their MPs had made representations and whether they should be part of the complaints system at all. Quite frail and elderly constituents were sent voluminous legal tracts on their rights and what they might wish to do, which just confused people. My hon. Friend and I pleaded with the Law Society to stop sending this stuff directly to the constituents because it was adding to their concern and worry.
The way in which the Legal Complaints Service operates now is very good. It has recognised the fact that, as with the cases that my hon. Friend and I put forward, a lot of complainants are not used to dealing with the system. Anything that stops people having access to justice and putting the complaint forward is wrong.
Clearly, the measure has been introduced in the other place as a way of trying to reduce complaints and protect the vested interests that I have seen in complaints that I have dealt with. There is not always a clear reaction from solicitors to admit where they have got it wrong. I shall refer to the case of Silverbeck Rymer v. Mr. Jobes, a case that I took a few years ago. Mr. Jobes was a 72-year-old, very seriously ill gentleman who had £3,500 of his compensation taken by Silverbeck Rymer, a Liverpool-based firm of solicitors. The case had been referred to Silverbeck Rymer by a company called Industrial Disease Compensation Ltd. of Ashington. The solicitors then deducted the money at the conclusion of the case and passed it to IDC, which had done nothing. My constituent lost money, but the solicitors did not advise Mr. Jobes that he had no reason to pay that amount.
I give credit to the Legal Complaints Service. I cannot remember what it was called in those days; its title has changed since then. The case officers pursued the case very well, but the attitude of the solicitors was not to admit that they were wrong. They took the case all the way through to adjudication. If it had not been for my intervention and the case worker who dealt with the case and understood it very well, that individual would never have got justice and would not have had that money awarded to him.
I challenge the idea that when solicitors know that genuine mistakes or scams have taken place—I refer to that case as a scam—they suddenly roll over and admit that they are wrong. They do not. We have a difficult system for complainants, so anything that makes it more difficult for complainants to come forward has to be discouraged. The Bill would be weakened significantly with regard to consumers if the amendment tabled by my hon. Friend the Minister were defeated. Therefore, I am happy with the amendment’s proposals and I plead with the official Opposition to recognise the fact and not to look at it from only a solicitor’s point of view. If Opposition Members want to meet some of my constituents and those of my hon. Friend who have been scammed by not only small backstreet law firms, but by some well known national chains as well, they should please contact us. They will find that those constituents are genuine, should have been given clear legal advice and went to solicitors thinking that the solicitors were acting in their interests, but it is clear that they were not.
My final point is about internal complaints procedures, which the hon. Member for North Southwark and Bermondsey raised. Internal complaints procedures are okay in practice if a solicitor or lawyer is clear about who they are acting for or in the best interests of. I will give the example that has already been mentioned. The National Union of Mineworkers in Durham signed people up to take forward chronic obstructive pulmonary disease claims and passed those cases to Thompsons solicitors. My constituents who were affected asked who they should complain to. The first port of call was clearly the NUM in the Durham area, which was being paid 7.5 per cent. for doing absolutely sweet Fanny Adams, and was not going to give that money back or look at those complaints in any way because it had signed the agreement with Thompsons solicitors.
It would be expected that Thompsons would say to those constituents, “You’re my client, so I should be giving you clear advice that you do not need to pay this money.” But Thompsons did not do that, because there is a confusion over whether it was acting for the NUM or the constituents, and I have said that to some of its senior partners. The £5 million that has been paid to the NUM in Durham by my constituents and those of other hon. Members makes it clear that Thompsons was not acting in the best interests of those constituents. They could have gone to any high street solicitor and got the work done for absolutely nothing because the Government were paying all the legal fees that related to those cases.
It is not simply the case that some of the issues concerning solicitors can be dealt with internally because some of those firms—Thompsons is one and my hon. Friend the Member for Bassetlaw mentioned a few others—have conflicting interests and do not act in the best interests of the clients as they should. That is because they have relationships with either claims handling companies or, in Thompsons case, with organisations such as the NUM in Durham. The poor consumer does not know where to go, so that must be made clear. With regard to the complainant, the Bill clarifies the process and the fact that complaints against a solicitor will be dealt with fairly.
I was told very early on by some solicitors that some of my complaints were frivolous, and certain solicitors even wrote to constituents of mine saying, “How dare they come to me?” The other week I heard of one solicitor who is apparently going to give me a piece of his mind when he sees me, which I am waiting for with anticipation. Some asked how I dared to put forward complaints against certain firms of solicitors. It has got to be a fair system, and one where those who are dealing with solicitors’ firms know where to complain and can get justice. If the provision is taken out, I suspect that the threats that solicitors make to clients about potential costs involved will end.
Many people who do not deal with solicitors regularly and who, in some cases, are quite poor will be discouraged if they think that they will be landed with a big bill from the solicitors at a later stage. That was clearly the case for Mr. Jobes. If he had thought that he would be penalised at the end of that process by a very aggressive firm of solicitors such as Silverbeck Rymer, he would not have pursued that case. That would have been an injustice, and would have been so not just in that case, but in the many hundreds and possibly thousands of cases that my hon. Friend and I put forward.
Robert Neill: My interest as a non-practising barrister is recorded, and all the people that I know and worked with over many years at the Bar want to ensure that those people in our profession who behave badly are disciplined and dealt with. That is what the vast majority of lawyers from both branches of the profession want. The hon. Members for Bassetlaw and for North Durham have gone into considerable detail over individual instances of injustice suffered by their constituents. With respect, the point is that those are clear cases of misbehaviour or negligence by solicitors. Those were genuine complaints, and it is right that justice should be done for their constituents under those circumstances; none in the profession want to stop that.
Mr. Jones: May I ask the hon. Gentleman why the Law Society was not just slow, but very diffident in relation to the fact that a large scam was going on in the early days when my hon. Friend the Member for Bassetlaw and I were pursuing this? Having met the president of the Law Society at a reception a few months ago, I have to say that her attitude is still very dismissive.
Robert Neill: I have not had a conversation with the president of the Law Society, but I think that the hon. Gentleman himself conceded that there had been considerable movement and far greater recognition of the issues by the society. He made that point, and we accept that there is a need for a new and better system. We do not have a problem with that.
I do not think that some hon. Members appreciate the importance of what is called the cab-rank rule at the Bar. That is the fact that people cannot turn a client away because they do not like the look of them. That is absolutely fundamental and very important in ensuring access to justice for people with unattractive criminal cases—sometimes, with very fraught family cases—who, none the less, must have someone to argue their case as a right, until, a prosecution is proved against them beyond reasonable doubt.
Against that background, and under that principle, I defended some pretty unpleasant and nasty people over the years, as have many of my colleagues. The sort of person who is prepared to murder, rape, beat his wife or his partner senseless, or stick a shotgun to the head of a sub-postmistress or something, is perfectly prepared, when serving his long, deserved prison term, to turn on everyone that he has come across in between and make vexatious, false complaints. Do not think that that will always automatically be seen through immediately, as many of these nasty people are persuasive, plausible, manipulative and devious. It is not just experienced lawyers such as myself who have to deal with them; the young barrister who has to go and deal with the remand hearing in the magistrates court—receiving £40 for the appearance—is as much vulnerable to complaints by those sort of mendacious people as a senior practitioner such as myself, who might be more robust in dealing with it. I hope that hon. Members will not forget that there is another side to the coin, and that is hugely important. That is why we think that the Lords amendments are significant.
There is a principle in criminal law that, if a defendant is acquitted, he or she should not be penalised in costs, unless his actions—the judge’s use of phrase there—have brought the prosecution upon him; he has behaved badly in a way in which he might have told lies to the police or concealed matters that would have brought the investigation to a close sooner.
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In a sense, that is what the Lords amendments would address. When someone against whom a complaint is made is cleared, and it is shown that there is no fault against them, it is clearly wrong and unjust that they should run any risk of penalty. That is what the Bar Council and the Law Society are concerned about.
Mr. David Burrowes (Enfield, Southgate) (Con): I am pleased to follow my hon. Friend, who has put discussion of the amendments into the proper context. The hon. Members for Bassetlaw and for North Durham also had the right context when they recognised that the Legal Complaints Service has made considerable progress in putting its house in order. Indeed, I was flicking through the Law Society’s Law Gazette only today. The hon. Member for Bassetlaw is featured in the centre of this week’s issue as recognising the improvement. It is there for all to see. It is interesting that he is becoming the champion of such interests as solicitors’. Perhaps he is not their centrefold pin-up, but one recognises the progress made by the legal services.
John Mann: I thank the hon. Gentleman for creating such good publicity. I am sure that he would want to recognise that that progress has been made precisely in the context that my constituents have not had the threat shoved down their throats by solicitors that they might have to pay if they take a complaint against those solicitors.
Mr. Burrowes: The context is right in terms of progress, but it is wrong in terms of the amendments and of dealing with those genuine complaints where scandals have been revealed and conduct that we all deplore is found to have occurred. The book must be thrown at such cases, but we are considering not so much those genuine complaints, which the hon. Gentleman has been diligent in bringing to the Committee’s attention, as unfounded complaints and how to deal properly and proportionately with them.
The hon. Gentleman raised concerns about delay, although some progress has been made in improving the situation. The amendments that the Government are seeking to overturn would cause problems in dealing with matters expeditiously. I suggest that the Bill’s intention is to deal with matters quickly and, as may be the case, properly in-house. There would be unintended and problematic consequences if the amendments were allowed to stand.
The Minister justifies the amendments on the basis that the Bill is inflexible and unfair as presently amended. As for inflexibility, the rules are directory, not mandatory, and must be followed with due discretion. There is no mandatory element to them. As my hon. Friend the Member for Bromley and Chislehurst pointed out, other clauses have a degreeof restriction, but all of them involve directory requirements.
The Minister and the Government seek to justify their approach on the basis of the Financial Ombudsman Service. Can the Minister explain how the legal profession is so similar to the ombudsman service in how it deals with complaints? How is there no distinction in terms of particular lawyers specialising in areas disproportionately likely to be subject to unjustified complaints? Let us see the justification to put them on such an equal footing when there may be a requirement to pay charges in respect of handling complaints, whatever the outcome.
Fairness cuts a number of ways. Let us consider lawyers who have never been subject to complaints, whom we all commend and support. Given that it is proposed that the Office for Legal Complaints is to be funded mainly by practitioners on a general levy, is it appropriate, proportionate and fair for those lawyers to bear that burden? As for lawyers against whom complaints are not upheld, the key objective of the Bill is to encourage the handling of complaints to be resolved expeditiously when possible through in-house means. Those lawyers will be affected by the Government’s approach. Why should the profession, not the practitioner who failed to deal properly with the matter in-house, collectively bear the cost of the Office for Legal Complaints when dealing with such cases?
Sir David Clementi identified the risk, as did the Joint Committee, of not properly allowing the polluters to pay. The Government favour a system under which charges are paid whatever the outcome of the complaint, so the issue would just be based on administrative simplicity. It is wrong to put administrative simplicity ahead of the need to avoid causing injustice to authorised persons who had been subjected to unfounded complaints. Will the Minister make it clear that she does not wish that to happen? It must be made explicit in the Bill that such an outcome should not take place.
Bridget Prentice: The debate has been interesting and quite lively, as it was in the House of Lords. With reference to the amendments tabled by the hon. Member for North Southwark and Bermondsey, I repeat that there was nothing inherently unfair in clause 136, as originally drafted. I am confident that, after consultation, the OLC, the board and the Lord Chancellor with oversight of it will draw up a pretty fair system of case fees.
The system might provide for fees to be waived or reduced in the circumstances set out in the amendments. I can see considerable merit in that. However, if they were to be waived, I should prefer that to happen when the complaint was not upheld and when the respondent co-operated and had shown that the matter has been subject to proper in-house complaints procedure. I am keen to avoid a position in which the respondents who could have resolved the matter much earlier have no incentive to do so, but just send it to the OLC. I want the Bill to result in a proper, robust and responsive in-house complaint systems in the legal profession.
Simon Hughes: I should have thought that there was no dispute about that. We have all put forward arguments in favour of good in-house complaints procedures and the more complaints that can be resolved on that basis, the better.
Bridget Prentice: I wanted to make sure that the Committee was aware of the important principle in the Bill that the in-house complaints system has to be robust and responsive. However, I am keen to consider the issue raised by the hon. Member for North-West Norfolk about a respondent who has gone through his own in-house system and co-operated fully with the OLC, and is not then charged the additional fee. I shall look at that matter to see if we can amend that part of the Bill to reflect that more clearly.
The hon. Gentleman and the hon. Member for Enfield, Southgate referred to my proposals as akin to the Financial Ombudsman Service. The reason is that the Financial Services and Markets Act 2000 allows for a contribution to be made by a complainant where appropriate. The hon. Member for North Southwark and Bermondsey is right that the Financial Ombudsman Service has never used the rule, which appears to mean that it is redundant, but it has told us that it is a good deterrent against people bringing vexatious complaints. However, we must also be clear that the provision is not a means by which an unscrupulous lawyer can prevent a consumer making complaints. My hon. Friends raised the point of people being frightened off making a complaint by the lawyer trying to say, “Well, you may have to pay for this at the end of the day”. The provision will act as a deterrent against those who are trying to waste the time and resources of the OLC, to the detriment of people who have valid complaints.
I said at the beginning and now repeat, the amendments made in the other place go too far. They are a long way from being fair, which is why I wish to overturn them here. However, I accept what the hon. Members for North Southwark and Bermondsey and for Bromley and Chislehurst said in pointing out that where the solicitor or barrister has behaved properly, reasonably and honourably—they have gone through a proper complaints system, after which the case has still gone to the OLC—and is then found to be exonerated absolutely, there is a case for that person not to have to pay those costs.
Simon Hughes: The Minister is being very helpful. I do not think that this has yet been asked in Committee, but would she follow the implication of what she said by making sure that, after we have finished in Committee, she gets representatives of the three parties on the Committee together for a session in which we can come to some agreement around the table, rather than bouncing further amendments around? I hope that she will still be in post, but will she make sure that the undertaking is given departmentally in case there is any shift of responsibility in the days ahead?
Simon Hughes: There are still some residual concerns from the current legal services ombudsman about some improvements that are not hugely controversial. We seem to have an agenda—looking at the complaints system in the light of this debate and any other concerns—and, if such a meeting were possible, that would be really positive.
Bridget Prentice: There will be further debate today about some of those other areas of complaint. No doubt we can deal with them then. As I say, I am happy to be open about how we move things along for the examples given, so that the entirely innocent respondent is not unjustly and unfairly dealt with. On that basis, I would ask the hon. Gentleman to withdraw his amendments and for the Committee to support my amendments.
12.15 pm
Mr. Bellingham: The Minister has been fair-minded and understanding. The Opposition would like to accept her invitation to enter a cross-party bipartisan approach to sort out the problems in the event of her amendments being made. We will vote against those amendments because we feel very strongly that this was a victory won in the Lords after a great deal of debate. I do not accept what the Minister has said, but in the event of us losing, it would be churlish of me not to accept her kind invitation.
Question put, That the amendment be made:—
The Committee divided: Ayes 9, Noes 5.
Division No. 23 ]
Bailey, Mr. Adrian
Flello, Mr. Robert
Foster, Mr. Michael (Worcester)
Goodman, Helen
Hesford, Stephen
Jones, Mr. Kevan
McCarthy, Kerry
Mann, John
Prentice, Bridget
Bellingham, Mr. Henry
Burrowes, Mr. David
Djanogly, Mr. Jonathan
Hughes, Simon
Neill, Robert
Question accordingly agreed to.
Simon Hughes: I beg to move amendment No. 230, in clause 133, page 69, line 14, at end insert—
‘( ) for the identity of respondents to be published.’.
I accept that the Bill as it stands does not prevent the OLC from identifying firms it has upheld complaints against. We are the subject of freedom of information legislation, and anyone, including parliamentarians and, more importantly, users of the service—ordinary citizens and local papers—will be able to obtain that information. The amendment is to avoid any doubt and to ensure that the OLC proactively names firms so that all consumers can benefit and not just those who happen to make an inquiry or who are clued up and on the ball.
The amendment is entirely consistent with Government policy. The White Paper stated that consumers would benefit from the OLC making information available about complaints that have been upheld against providers. The Government strongly support the principle of informing the public about providers’ performance. They also recently accepted the recommendations of the Macrory review, which includes a proposal that regulators should disclose to key estate holders and the wider public when and against whom enforcement action has been taken.
Consumers clearly have a right to know when the behaviour of a lawyer casts serious doubts on the integrity of or confidence in that lawyer. Evidence suggests that there is a small number of firms cited, understandably and reasonably, by the hon. Members for North Durham and for Bassetlaw and others, who are tarnishing the image of the majority. It is often the way that crime is committed by the minority of people. A lot of young people are tarnished with committing crime although it is only a small number who do so.
The latest figures show that from 2005, 7 per cent. of solicitors firms referred to the Law Society’s now renamed the Legal Complaints Service accounted for one third of the complaints it received. That is evidence of how a few can spoil the reputation of the many. The other day we had the report by Lord Lofthouse—formerly an eminent Member of this House—into the miners’ compensation issues. The report shows—I heard him talking on the radio about it—that the worst excesses were concentrated in the hands of a relatively small number of solicitors and it names and shames them. That seems to be a perfectly acceptable way forward: if people do wrong and are shown by the proper process to have done wrong, they ought to expect the publicity that follows from that.
Lawyers who breach their obligations to consumers do not deserve the protection of their general reputation. It is still difficult in the marketplace to find out exact information about competence. We now know what people do and we can read up on the subjects they offer, but that does not tell us anything. It is a bit like schools: it takes a while for people to know the score and if one is not local, one will not necessarily have that information available to hand. People rely on personal recommendations, on instincts and a reference. If there is poor performance, we need to protect consumers from going through that door, making that telephone call and writing that letter unwittingly. It also means that standards are likely to go up. The more we expose those who do badly, the more we raise general standards because the incentives will be to abide by the rules and treat clients fairly. People will vote with their feet if they are aware that lawyers have been shown to have broken the rules which will lead business towards those who have a good reputation. That adds professional support to the regulatory system the Government are setting up.
Lastly, the Legal Complaints Service has recently announced its intention to publish the complaints record of solicitors firms. That shows that the profession has arrived at this conclusion itself and is happy to support this. This means that what has been arrived at as a result of the mixed history of recent years in the profession can be continued in the Bill. It is not a prescriptive amendment but gives flexibility for the Office of Legal Complaints to decide a policy on when it will be appropriate to publish. It would clearly be disproportionate to do it if there was only one minor breach and only that is the flexibility that is left. I hope that the Minister will accept that this is therefore a coming together of views for the consumer organisations, the professions and the public and that she can be supportive.
Bridget Prentice: There is some concern that the Bill does not allow for the OLC to publish the names of lawyers who have had complaints upheld against them by an ombudsman. If that were the case, I would be snatching this amendment from the hon. Gentleman’s hand straight away. However, I am going to ask him to withdraw it. If he looks at clause 151, he will see that the OLC can publish a report on any case that has been handled by the ombudsman scheme and that, when it does that, it must not name the complainant, unless he or she consents to be named. There is nothing to stop it mentioning the lawyer concerned and it is inescapably and clearly implicit in that drafting that the OLC may identify them if it considers that appropriate.
It does not perhaps go as far as the idea of naming and shaming, partly because I would be concerned that one would end up with a league table of the 10 worst lawyers. That would not necessarily be helpful, because it would not always be comparing like with like: different firms have different types of business, different numbers of partners, and so on. I am not sure that it is the role of the OLC to be actively engaged in naming and shaming, in case it would, in effect, mislead consumers into thinking that a particular firm is really bad, when in fact, although it may have had a large number of complaints, there are other factors that may need to be taken into account. Therefore, I am not sure that it is appropriate for the OLC to respond in that way.
John Mann: If it was a good firm of solicitors and it was being caught out often, presumably it would have conciliated those cases, as the very reputable Mansfield firm of solicitors, Hopkins Solicitors, did with every single case it dealt with under the miners’ compensation scheme; they paid back everyone, were roundly praised locally for doing so and restored their reputation. Conciliation provides that option for firms.
Bridget Prentice: My hon. Friend makes a very valid point. That is an example of where complaints are made, but the firm responds appropriately and so can restore its reputation.
Having said that, I am not sure that getting into a league table situation is necessarily a good thing. Of course, I understand that there are websites now that provide such tables, and people are perfectly capable of taking the information that the OLC will produce and doing with it what they will; that is entirely up to them. However, there is nothing in the Bill that precludes the OLC from naming lawyers who have had complaints upheld against them. On that basis, the amendmentis unnecessary and I ask the hon. Gentleman to withdraw it.
Simon Hughes: I hear what the Minister says. I refer to clause 151, which says:
“The OLC may, if it considers it appropriate to do so in any particular case, publish a report”.
There is quite broad flexibility and discretion there in respect of the opportunity to publish a report, which means that the OLC can publish a report. The amendment was obviously seeking to say that, without it being absolutely prescriptive, the ability to publish a report is clearly one of the things that the rules should provide for. I understand the Minister’s point. In passing, I understand that league tables for solicitors, just like league tables for schools and other bodies, are not always a very accurate or helpful tool, because they suggest one thing whereas, in fact, they may be evidence of something else.
There is probably agreement that we do not want simplistic league tables, but people need to know about solicitors who regularly receive complaints, as opposed to solicitors, including big firms, who receive one-off complaints. I am happy to withdraw the amendment. Again, this is an issue that we can have further consultation on outside the Committee, as well as inside it. It may be an issue that we need to return to. However, I am keen that the public should know about this issue, and not just the public who are on the internet and using modern technology, but people such as the retired person for whom modern technology is not where they go for their information, or the person who has never used a solicitor in their life except for one occasion. We need to ensure that such people are looked after.
On that basis, I am happy to withdraw the amendment. May I just say that I share the Minister’s observation that, on 26 June, this room is about as cold as it normally is on 21 December, before we break for Christmas? I have given in and put my jacket back on. The Minister clearly needs something to warm her up during her lunch hour, so I will not go on and I hope that we make such speedy progress that we will warm up as a result.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: No. 9, in clause 133, page 69,line 38, leave out ‘, (i)’.—[Bridget Prentice.]
Clause 133, as amended, ordered to stand part of the Bill.
Clauses 134 and 135 ordered to stand part of the Bill.
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