Clause
136
Charges
payable by
respondents
12.30
pm
Amendments
made: No. 10, in clause 136, page 70, line 37, leave out
subsections (2) to
(4).
No. 11, in
clause 136, page 71, leave out line
19.
No. 12, in
clause 136, page 71, line 22, leave
out from ‘circumstances’ to end of line
23.—[Bridget
Prentice.]
Clause
136, as amended, ordered to stand part of the
Bill.
Clause
137
Determination
of
complaints
Simon
Hughes:
I beg to move amendment No. 233, in
clause 137, page 71, line 34, at
end insert—
‘( ) In
considering what is fair and reasonable in the circumstances, the
Ombudsman shall take into account the relevant levels of damages
awarded by courts in similar circumstances, and relevant codes of
practices, professional rules, standards and
guidance.’.
The
amendment relates the section headed “Determinations under the
scheme” and to the clause headed “Determination of
complaints”. It would add criteria at the end of subsection (1)
for assessing what was fair and reasonable in respect of the
ombudsman’s handling of a complaint. At the moment, the Bill
says:
“A
complaint is to be determined...by reference to what is, in the
opinion of the ombudsman making the determination, fair and reasonable
in all the
circumstances”,
and the
amendment would simply elaborate on that.
The amendment is supported by
the hon. Member for North-West Norfolk and his colleagues. It argues
that the ombudsman should take into account
“the relevant levels of damages
awarded by courts”
so
that there is comparability between the proposed adjudicatory system
and the court system where the circumstances are similar. The amendment
also suggests that the ombudsman should look at
“relevant codes of practices, professional rules,
standards and
guidance.”
Obviously—this
is one of the purposes of the Bill—the jurisdiction proposed for
the Office for Legal Complaints is rather different from that currently
exercised by the professional bodies. The Law Society and the Bar
Council have their own methods of adjudication and determination. Under
current arrangements, redress can be awarded where a client has
suffered “inadequate professional service”. Under the
Bill, the present jurisdiction is replaced by a much broader phrase,
which refers to what is
“fair and reasonable in all the
circumstances of the
case.”
A sound
argument exists for making that change. The proposed arrangements are
similar to the
jurisdiction of the Financial Ombudsman Service, which is a regular
point of reference. The service is the most similar system in place at
the moment and generally has an increasingly good reputation as a
reasonable redress scheme. There have also been
difficulties deciding what “inadequate professional
service” means and what it should mean in terms of the
determination, so it is right to move on from that definition to a new
one. For example, in the case of complaints against solicitors, it was
thought at one time that inadequate professional service could not
cover situations in which clients suffered as a result of a breach of
conduct rules by the practitioner or where a remedy for negligence
existed elsewhere through the law. Those restrictions have been
overcome, but there is an inflexibility.
It is important, however, that
there is no unpredictability about the way in which the office for
legal complaints should act. The amendment therefore suggests that
there should be guidance on the approach that should be taken to ensure
flexibility and consistency. In the context of legal services, it is
desirable for the guidance given to the office for legal complaints to
include a requirement to consider the professional obligations under
which practitioners operate—that may add to or take away from
the degree of infraction committed—and the way in which the
courts consider similar issues. I gather that it is identical in every
material sense to the Legal Profession and Legal Aid (Scotland) Act
2007, which is how similar matters have been dealt with in Scotland.
The proposal is drawn from good recent precedent and I hope that it
commends itself to the
Minister.
Mr.
Bellingham:
I have a 25-minute speech, which will take us
to 1 o’clock, but the Labour Whip is glaring at me so I will
restrict it to 2.5 seconds and say that I support the hon. Member for
North Southwark and Bermondsey.
Bridget
Prentice:
I shall make no predictions about how long I
will take. On that basis, I will not look at the Government Whip so
that I cannot be glared at.
The issues that the hon. Member
for North Southwark and Bermondsey raises—relevant codes of
practice, professionals and so on—are all likely to be taken
into account by the ombudsman when determining the complaint, but it is
not necessary for them to be in the Bill. The idea is that the scheme
should work as flexibly and informally as possible, which means that
much of the detail of how the determination is made, what will be taken
into account and the criteria that should be applied, should be set out
in the scheme rules, rather than in the Bill. It will make quick and
fair redress more likely and give the maximum flexibility to adapt to
changing circumstances and the changing needs of consumers.
All the scheme rules made by
the Office for Legal Complaints will be subject to the consent of the
board before they can take effect, so safeguards are already in place
to ensure that the scheme rules work in the interests of the consumer
and operate fairly in terms of the regulatory objectives. That includes
leaving to scheme rules the criteria that an ombudsman must take into
account when determining what is fair and
reasonable. That is how the financial ombudsman service operates,
providing that the ombudsman’s determination is made according
to what he considers fair and reasonable in all circumstances. It
leaves all further guidance to the rules. It is the model to which we
have referred regularly throughout our proceedings; it is the closest
to what the Bill sets up and is a great deal better than tying an
ombudsman to an inflexible list of factors that may not, over time, be
relevant. I am not convinced that the amendment should be included in
the Bill. On the
Scottish issue, I realise that the wording in the hon.
Gentleman’s amendment is similar to that in the Legal Profession
and Legal Aid (Scotland) Act 2007, but like many things legal in
Scotland, it is quite different from those that are set out in the
Bill. For example, the Scottish system allows for a complaints
commission that determines complaints and runs the complaint-handling
scheme, and the members are appointed by Scottish Ministers after
consultation with the Lord President of the Court of Session. It is a
very different structure from that in England and Wales, where
Ministers, whoever they may be, do not and will not appoint the
ombudsman, who will operate in a much more flexible scheme, which is
intended to provide quick, fair and final redress to the
consumer.
There are
arrangements for internal reviews of the complaint but the scheme will
not be fettered by a long-winded appeals process, which is how the
financial ombudsman service has operated. I would prefer to leave it to
the OLC and the board to decide what factors the ombudsman should take
into account when determining what is fair and reasonable. I hope that
the hon. Gentleman agrees with me and will therefore ask leave to
withdraw the
amendment.
Simon
Hughes:
I am grateful for the Minister’s reply and
I shall happily reflect on what she has said and consider the Scottish
experience. I note that she prayed in aid the example of lack of
co-decision between the Minister and the Lord President of the Court of
Session, and no doubt she will remind us of that, although she said
that it was not an exact parallel. If I am persuaded, I shall not
pursue the matter later. For today, I beg to ask leave to withdraw the
amendment.
Amendment, by leave,
withdrawn.
John
Mann:
I beg to move amendment No. 284, in
clause 137, page 72, line 25, at
end insert—
‘(4A) For the
purposes of paragraphs 2(d) and (e), in the event of a
respondent’s failure, within a reasonable period, to act on a
determination, the ombudsman may order, at the expense of the
respondent, the necessary rectification to be secured or action to be
taken by an alternative authorised
person.’.
I
am sure that the Minister will want to accept this “big
tent” amendment, which appears to bear the names of everyone
apart from the Liberals. The amendment could be best described as the
Rayleys amendment, and it is in the interests of every good, decent and
honourable solicitor and of every honourable person in the legal
profession. Large numbers of cases have been brought by individuals
against the Rayleys solicitors firm, which deducted significant amounts
of money from those individuals.
It is clear that the money was taken—there is no ambiguity about
that, and my view and the view of many other people is that it was
taken wrongly. The
cases were taken through the Law Society and went through the due
process. The case worker considered the cases and they went to
adjudication, which was duly made. The result was that my constituents
were successful. In one case, Rayleys refused to pay up. That case went
to the solicitors disciplinary tribunal, which also made a ruling.
Despite that, Rayleys has refused to pay out in relation to the other
cases. Rayleys’ rather pathetic defences included the assertion
that my constituents and others were confused and did not know what
they were talking
about.
I took four
constituents to stand outside Rayleys’ headquarters in Barnsley,
where we were warmly applauded by local people for demanding that the
firm pay up. We were kindly invited inside, where, for an hour, Rayleys
tried to persuade the four constituents that they were confused and did
not have a complaint. They argued their case very eloquently, and
pointed out that they held Rayleys
accountable.
Those
constituents were people who had made a complaint against the legal
profession, and of all the cases that could have gone through a
complaints process, those cases are the clearest in the country; they
could not be any clearer. The senior partner of the firm about which
the complaint was being made had the opportunity to put his and his
firm’s case in open, face-to-face dialogue with the
complainants. He brought in his specialists, who sat alongside and
argued too, and they heard what my constituents had to say. The
constituents spoke for themselves—and did so clearly, and they
demanded justice. Yet still the firm has not paid
up.
There is nothing
that can bring the entire legal profession into greater disrepute than
that example. If regulation is meant to work, then it has to do just
that. What are my constituents meant to do in that context? They put in
a complaint more than three years ago—three years and three
months ago, in fact. They are not making a complaint in principle,
although principle is involved, or to make extra money, although they
might well be due extra money for all the hassle and expense that they
have gone through to make their complaint. Their fundamental complaint
is that they had some of the compensation that they received for their
industrial diseases taken away from them. That money was not charity.
If I recall correctly, the money in the cases of the four
men—certainly in the majority of those cases—was
compensation for bronchitis and/or emphysema. We are talking about
people who are ill or dying. Some of the Rayleys cases involve people
who are very seriously ill and who need the money because, for example,
they would like to buy additional breathing equipment. That was
categorised and quantified as what the people would spend the money
on.
12.45
pm
Unfortunately,
it is too late for Mrs. Beckett, a constituent of mine. I
attended her funeral. A widow, she wanted the money for a headstone for
her late husband, but Rayleys refused to pay out. When Mrs.
Beckett died, her family wanted the money for the
headstone. In that case, the Law Society has done a decent and
honourable thing by making an ex gracia payment, but it should not have
had to do so—it should have been a matter for the firm of
solicitors. Not only was there no ambiguity about the case, but even
the case put by the firm was straightforward, as it should not have
taken the money and handed it to the NUM, because the NUM rulebook
specifies that widows are not charged and that has been the case for
100 years. Mrs. Beckett’s case was the ultimate in
unambiguous cases, yet the firm has not paid out, and there are no
powers to force it to do so. The amendment would create the opportunity
to force a firm such as Rayleys to pay out, and I commend it to the
Minister. Firms of
solicitors such as Rayleys should not be allowed to continue
unhindered. There is no question in my mind about the fact that the
firm and its partner should be struck off. If the legal profession
wishes to hold its head up high with the general public, it has to
remove such firms. That is the only basis on which a self-regulating
closed profession can have a future. It must remove the bad apples.
People would demand such action in any other walk of life, and rightly
so, and that should happen in the profession. There is no worse or more
disreputable example than Rayleys, as is demonstrated by the fact that,
uniquely, it has refused to pay out money that it owes to decent people
who are ill and dying.
Mr.
Bellingham:
I am grateful to the hon. Member for Bassetlaw
for moving the amendment. If he decided to press for a Division, we
would be happy to support him, not that I wish to foment any discord on
the Government Benches—I would not start trouble in such a
way.
Although
amendment No. 284 would be an excellent amendment, the Minister will be
aware that my colleagues in another place amended the Bill in a similar
way. Will the Minister reflect on whetherclause 137 goes as
far as the hon. Member for Bassetlaw wishes? If she decides that that
is not the case, and if the hon. Gentleman wants to press to a
Division, we will support him. The amendment would certainly clarify
matters and would, importantly, add detail to the clause, on which
basis we support it.
Bridget
Prentice:
The hon. Member for North-West Norfolk is being
very naughty today. I thought that my hon. Friend the Whip would
continue to glare at him on that basis.
The amendment, which would
allow the ombudsman to order a second lawyer to rectify the work of the
respondent when they fail to comply, would not add to consumer
protection. First, let me make it clear that it is unusual for the
respondent not to comply with the ombudsman’s directions,
because in all ombudsman schemes so far, the majority of people will
respond and comply fully, so we would expect full compliance from
lawyers. Any failure to do so should, as my hon. Friend the Member for
Bassetlaw says, be treated very seriously and as a disciplinary matter
by the approved regulators. There are enforcement powers in the Bill so
that determinations can be enforced by court order if
necessary.
The hon. Member for North-West
Norfolk discussed what happened in the other place, where my noble
Friend Baroness Ashton tabled Government amendments in response to the
debate to strengthen the enforcement provisions in clause 141, so that
the ombudsman can bring enforcement actions on behalf of complainants.
To a large extent, therefore, the amendment is trying to resolve a
problem that does not exist. Let us suppose that the relationship
between a lawyer and client broke down and the ombudsman ordered the
respondent to redo work, but they refused to do so. Such a situation
would be likely to result in enforcement action, and would therefore
certainly come to the attention of the relevant approved regulator, so
there is a very strong incentive for the respondent to avoid taking
that attitude.
Leaving that aside, another
point that concerns me is that it is not the OLC’s role to hire
lawyers on behalf of complainants. It must be clearly independent of
the legal profession and so should not recommend lawyers to do the work
of other lawyers who have been complained about. I understand that the
amendment is intended to give further protection to the consumer, and
that is very much the aim of the Bill, but it is important to get the
direction right in the first place, and then to enforce it as a last
resort.
John
Mann:
The Minister is right to say that we need to get the
direction right, but what about the detail? Some of my constituents and
others have made complaints against Rayleys that have by and large been
adjudicated in their favour, in that Rayleys is required to make
financial payments to them. How will they get the money that they have
been waiting a long time
for?
Bridget
Prentice:
As I said, enforcement action will be possible.
It is also important that if the ombudsman makes a direction and a
lawyer fails to rectify an error within a reasonable time, it will be
perfectly possible and right for the complainant to engage a different
lawyer for whose costs the first lawyer will be responsible. The
ombudsman could direct that that should happen, but the amendment puts
the onus on the OLC to provide the second lawyer, and that is not
appropriate. It is certainly right for the OLC to say to the
complainant, “Find another lawyer and the first one will have to
pay the costs,” if that is appropriate, but it should not be in
the business of having a checklist of lawyers to whom it farms out
complainants’ cases, which would be the effect of the amendment.
On that basis, I ask my hon. Friendto withdraw his amendment.
I understand the circumstances of his constituents, and I should like
to ensure that such instances are covered by the Bill, but his
amendment goes beyond what is appropriate forthe
OLC.
John
Mann:
It is not just my constituents; it is constituents
in Rother Valley and Selby, the 150 who attended a public meeting last
week in Leigh and many more. The Minister needs to spell out in writing
precisely how the cases with Rayleys will be resolved. If she can do
so, people will be satisfied, but if not, the amendment will be tabled
at a later stage and pushed to a vote. However, in this instance, I
shall give her the
opportunity to see whether there is a route through. I beg to ask leave
to withdraw the
amendment.
Amendment,
by leave,
withdrawn.
Question
proposed, That the clause stand part of the
Bill.
Simon
Hughes:
Clause 137 is quite important for consumers and
aggrieved people complaining against the service, but it is hardly
written in the most consumer-friendly way. First of all, it refers to
“determination” rather than to a decision, which is a
slightly odd phraseology. The burden of my request is to ask the
Minister to ask her civil servants whether the clause can be made to
read in a way that ordinary people will understand. It is about what
remedies are available and what the ombudsman can do to put right
things that have gone wrong.
Subsection (2) says, for
example:
“The
determination may contain one or more of the
following”.
The first
item on the list is fine—it is an apology. That is clear. The
second is:
“a
direction
that—
(i) the
fees to which the respondent is entitled in respect of the services to
which the complaint relates...are limited to such amount as may be
specified in the direction, and
(ii) the respondent comply, or
secure compliance, with such one or more of the permitted requirements
as appear to the ombudsman to be necessary in order for effect to be
given to the
direction”.
It is not
really a remedy that somebody would necessarily recognise as something
that they want, or understand even if they want
it.
The third item
would be better with a bit of tidying
up:
“a direction that the
respondent pay compensation to the
complainant”.
The
language of the fourth is a bit old-fashioned, and I am sure that we
could tidy it up:
“a
direction that the respondent secure the
rectification”.
What we
mean is that the respondent should put right at their own
expense
“any...error,
omission or other
deficiency”.
The
requirement is much the same. Subsection (3) gives us the definition
for subsection (2)—which, if anyone is
trying to understand it, tries to explain that one can get all the money
or some of it back. I
just wanted to make that request. This is one of the bits of the Bill
that is not for lawyers. If someone says, “What am I entitled to
if I complain?”, somebody ought to be able to say,
“This.” When the Office for Legal Complaints or the
ombudsman are asked, they should be able to supply a bit of paper with
a quotation from the Bill that people can read. I hope that the
Minister will be kind enough to consider this issue so that we can have
more user-friendly legislation. That must be possible in relation to
this
clause.
Bridget
Prentice:
I am happy to consider making any legislation
more user-friendly, and I take on board the hon. Gentleman’s
comments.
Question
put and agreed
to.
Clause 137
ordered to stand part of the
Bill.
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