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Session 2006 - 07 Publications on the internet General Committee Debates Legal Services Bill [Lords] |
Legal Services Bill [Lords] |
The Committee consisted of the following Members:Hannah
Weston, John Benger, Committee
Clerks
†
attended the Committee
Public Bill CommitteeTuesday 26 June 2007(Morning)[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 HouseLSB 02
Legal Services Ombudsman and Legal Services Complaints Commissioner for
the Commons Public Committee for the Legal Services
Bill
Clause 133Operation
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
Parliamentary Under-Secretary of State for Constitutional Affairs
(Bridget Prentice):
Welcome back to the Chair,
Mr. Cook. I can understand why my hon. Friend the Member for
Bassetlaw tabled the
amendment, but we need to make it clear that the Bill sets out a clear
distinction between redress and discipline. The ombudsman can consider
only matters that relate to redress and the approved regulators deal
with disciplinary matters, as clause 113 states. Because of that, we do
not think that the ombudsman should have a role in reviewing an
approved regulator’s disciplinary decision. That is a regulatory
matter, and it is not what the ombudsman scheme is being set up
for.
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?
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 must resist
the amendments for two main reasons. One is that their combined effects
would mean the scheme rules having to provide for an ombudsman to
extend the time limit in any circumstance that he
considered reasonable. There are two aspects to that: first, the scheme
rules must allow the ombudsman the power to extend the limit, and,
secondly, if and when an ombudsman uses that power, he must do so in a
way that is reasonable in the circumstances, rather than by reference
to the scheme rules.
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.
‘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.
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.
11.30
am
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.
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—
“or
(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—
“or
(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.
11.45
am
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.
It concerns
me, however, that the desire of Labour Members to see justice done for
their constituents
might perhaps genuinely cloud them to the risk that injustice may be
done to some practitioners in the legal profession by dishonest,
vexatious, frivolous and malicious complaints. If Labour Members do not
believe that that happens, I am afraid that they have no experience of
the real world in which many lawyers work. For 25 years, I practised
almost exclusively in the criminal courts of this country. For about
five years before that, I did a good deal of family work, which was
virtually all publicly funded work of one kind or another. That is the
way it is at that end of the profession; it is not the “fat
cat” end of the profession. Disproportionately, the people who
practise in those areas tend to be younger members of the Bar. The
rewards are also less. They are, therefore, more vulnerable to the risk
of financial penalty and more vulnerable to the people with whom they
deal.
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.
12
noon
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.
The Minister effectively says,
“I don’t see why that should be in primary
legislation,” but while removing
sub-paragraph (i), which would enshrine in primary legislation a measure
of protection for lawyers who are the victims of unjustified
complaints, she is content to leave sub-paragraph (j), which would put
a similar restriction on circumstances in which costs could be made
against complainants rather than respondents. There is no logical
consistency in saying that no constraints on the rules can be referred
to in primary legislation. It seems fair to do so, and I urge the
Government to think again. The amendments would not protect vested
interests and fat cats, but the vulnerable in the profession doing a
necessary public service, who will be those most at risk if the
amendments are swept
away.
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?
Bridget
Prentice:
I am not sure whether I am about to sign my own
death warrant or something. We are living in interesting times as to
what the situation this time next week might be. Yes, I will give the
hon. Gentleman that assurance. Cross-party discussions to
ensure that we get this particular matter right would be useful. The
hon. Members for North Southwark and Bermondsey and for North-West
Norfolk know that I have always been keen to involve people in seeing
where our minds are going on such issues. I am happy to try to make
that happen, because I agree that if we can resolve matters in that
way, the passage of the Bill will be much
pleasanter.
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
]
AYESNOES
Question
accordingly agreed to.
‘( ) for the
identity of respondents to be
published.’.
This
debate is over a much more straightforward single point amendment than
the last debate, which stretched over lots of interconnected points and
arguments. The amendment is an attempt to put a provision in the Bill
that would require the OLC to
make rules about identifying legal service providers it has upheld
complaints against. The amendment comes as a suggestion from the
professions, which want to ensure that people who do wrong are seen and
known publicly to have done wrong because that then protects them from
a tarnished reputation by association. That is very important. If
people offend and they are dealt with, we ought to know who they are.
The rest of the profession should be regarded as good, proper and
honourable in what they do.
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.
“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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