The Parliamentary Under-Secretary of State for Justice (Bridget Prentice): I beg to move,

It is a pleasure to serve under your chairmanship, Mr. Bercow. As was said before the Committee began, we will be watching closely to see the extensive and excellent chairmanship that we know you can provide.

I sent out an amended explanatory memorandum on 4 June, which I hope all members of the Committee have received. The memorandum contains more detail on the regulatory arrangements that members of the Association of Chartered Certified Accountants will be subject to. It gives up-to-date information on what has happened in the probate market between the commencement of section 55 of the Courts and Legal Services Act 1990 and the order being presented. I hope that it might pre-empt, to some extent, some of the questions raised by the Merits Committee when it referred the order back.

The order enables ACCA to become an approved body and authorise suitably qualified members to provide probate services for a fee, gain or reward. By probate services, I mean the preparation of any papers on which to found or to oppose a grant of probate or a grant of letters administration. At the moment, section 23 of the Solicitors Act 1974 restricts the provision of probate services for a fee, gain or reward to specified legal practitioners, but section 55 of the 1990 Act provides an exemption for members of an approved body.

ACCA is the third organisation to seek parliamentary approval to become an approved body since section 55 was commenced in December 2004. Two other organisations—the Institute of Chartered Accountants of Scotland and the Council for Licensed Conveyancers—became approved bodies on 1 August 2008. However, only the CLC has begun to issue probate licences to members; it has issued 18 to date.

This application, which was received in January 2008, has passed through the required statutory approval procedure set out in schedule 9 to the 1990 Act. In so doing, it has been considered and approved by the legal services consultative panel and the president of the family division.

The panel was keen to ensure that the arrangements that ACCA proposed for training, regulation and consumer protection were on a par with those of previous applicants and existing providers before recommending approval. As a result, this application has my full support.

Mr. John Redwood (Wokingham) (Con): Does the late arrival of the memorandum mean that there were serious problems in drafting? Will the Minister explain why it was late?

Bridget Prentice: The main reason that the memorandum arrived late is that when the Merits Committee looked at the order, it wanted us to update the areas where it felt that we were referring to a situation that occurred in 2006. The Merits Committee felt that it was better to bring that more up to date. However, I am happy to go through some of the issues that it was concerned about. In particular, it wanted to know what training would be made available and to ensure that ACCA was following the same procedures as the other providers that had applied before.

ACCA is a professional body of accountants. It received its royal charter in 1974 and has more than 53,000 members in England and Wales. Members are required to meet academic and post-qualification requirements before being eligible for membership and obtaining accountancy practising certificates. About 6,500 members hold practising certificates.

Under the terms of the application, probate practising rights will be granted to those members who hold practising certificates in accountancy and who wish to provide probate services in England and Wales only. Before members of ACCA are granted practising rights, they will have to show that they can satisfy the requirements set out in section 55 if they wish to provide probate services. That includes completing the required training course and ensuring that their employees are suitably trained and satisfy the continuing professional development requirements set by the ACCA. They will have to have satisfactory insurance and compensation arrangements in place to cover the risk of any claim made against them and to protect the client in the event of their ceasing to provide probate services. They will have to have a complaints scheme in place, which will include a route of appeal to the legal services ombudsman.

I am pleased to say that the ACCA has demonstrated in its application that it takes consumer protection seriously. As an established professional body in its field of expertise, it already has monitoring and enforcement systems in place. It will ensure that there are additional and suitably robust monitoring systems in place for members that now wish to provide probate services.

I turn briefly to the benefits to the consumer. One potential benefit is that there will be more choice of provider, which means that there will be more competitive pricing. The opportunity for ACCA members to provide a more cost-effective and efficient service to their existing clients will be available. That is precisely what section 55 is intended to do, and is in keeping with the principle central to our policy of introducing new and better ways to provide legal services with wider choice at more competitive prices for consumers.

If a consumer is unhappy with how the ACCA has dealt with a complaint about the provision of probate services, they can refer the case to the LSO. The LSO’s jurisdiction was extended in October 2004 to cover bodies authorised under section 55, shortly before the relevant provisions were commenced. I reassure the Committee that if the order is approved, we do not expect the LSO to receive a high number of additional complaints per year, mostly because the ACCA has historically been good at dealing with complaints in-house and complaints did not have to be taken further. In the long term, complaints about ACCA members will be dealt with by the new Office for Legal Complaints, in line with complaints about members of other legal professional bodies.

If the order is approved, a subsequent order will be laid to amend the Legal Services Act 2007, which will bring ACCA under the jurisdiction of the Legal Services Board. That will ensure that it retains its probate rights in the future regulatory regime and that it is subject to the same oversight as other regulators, such as the CLC and the Law Society. On that basis, I commend the order to the Committee.

Mr. Henry Bellingham (North-West Norfolk) (Con): It is a great pleasure to serve again under your chairmanship, Mr. Bercow, and I thank the Minister for her comprehensive explanation of the order. As constituency MPs, we all know how important probate is. From constituency casework, we all know that such times are trying, testing and difficult for families. It is important to have such matters dealt with efficiently, competently and with the minimum fuss.

Quite often, apart from anything else, families need a shoulder to lean on. Certainly, in my experience of the law—I declare an interest as a barrister—at times like these the solicitor-client relationship is incredibly important, because it has to be based on total trust.

The proposals have been around for quite a long time. I understand that the decision was taken in 2002, but ACCA applied to be a probate provider only in 2006. An application was made in 2008. Why does the Minister think it has taken so long to open up this part of the legal services market and why has it taken ACCA so long to get its application in?

The official Opposition welcome the proposals in principle, but we also feel strongly that proper safeguards and checks and balances need to be in place. We have all heard stories of unscrupulous solicitors who get involved in probate, grab the money and do a runner to the Cayman Islands or the Turks and Caicos Islands. In those cases, proper professional indemnity insurance is always in place and the affected client can get full compensation under the schemes in place.

I spoke recently to Mark Stobbs, director of legal policy at the Law Society, who said that the Law Society was prepared to welcome the proposal in principle, but that he was concerned that there should be a proper and level playing field, with all the checks and balances that apply to solicitors also in place for accountants. The Minister said in her opening remarks—also pointing to paragraph 7.2 of the explanatory notes—that proper insurance will be in place. We welcome that, but what about a compensation scheme for those few cases in which events go badly wrong or of outright criminal corruption on the part of the provider of probate services?

The Minister mentioned training, which is good news. Who will carry out the training? Solicitors are subjected to regular visits and intervention. Will that happen in the case of accountants? What will be the situation regarding complaints handling? The consultation process and procedures are very much out of date. The consultation ran from July to November 2002, when the UK economy was strong and most law firms were thriving, particularly the smaller practices in our market towns and the smaller towns and cities around the country. The situation is now very different. Even in 2004, the regulatory impact assessment pointed out in paragraph 29 that smaller firms were likely to come under disproportionate pressure and that smaller firms in particular were likely to lose the larger percentage of business.

We are looking at a market that is worth £440 million annually. The suggestion is that around 5 per cent. of the market could migrate to the new providers. The Minister seemed to think that that does not represent a large amount of money, but it is £22 million that will be taken away from smaller firms when they are already under great pressure.

I shall not digress on to the problems that such firms face as a result of the Carter reforms of legal aid and of the onset of best-value tendering, which will mean that a lot of smaller practices lose publicly funded work. While considering the Legal Services Bill, the Minister and I discussed at great length the implementation—in due course—of alternative business structures. Many described that as Tesco law, with larger providers cherry-picking some of the more lucrative parts of local practice—for example, in the provision of will writing. Small businesses in the legal world are under a lot of pressure anyway.

Is the Minister comfortable with the fact that the consultation took place seven years ago and is it still completely relevant today? What discussions has she or her Department had with the Law Society, particularly with representatives of the smaller law firms in our town centres? We are told that legal aid deserts will probably be appearing there, where such firms will be consolidating and a removal of consumer choice is possible. Can she put our mind at rest on that?

Will the Minister answer the specific questions on the need to ensure that there is proper regulation? As I mentioned, at such times families need to have complete confidence in their professional advisers. As a rule, they do—not many complaints are made to the probate authorities—and it is important that that high level of service is continued. Bearing that in mind, far be it from the Opposition to do anything other than say that widening the market and increasing choice and competition are in principle good things. However, we have to be satisfied and ensure that that will be done in a context that is fair to everyone.

Susan Kramer (Richmond Park) (LD): May I say how sweet it is to be speaking at one of those few moments when Members in Committee perhaps have a slightly different balance in their relationship with the Chair than they might on most occasions? I have the pleasure of such an opportunity today.

I will not pretend to be an expert in this field, although I am advised by colleagues who are, but I have had the unfortunate privilege of going to probate on a number of occasions, following three deaths in the family over recent years. Therefore, I am extremely conscious of the fact that when members of the public go to probate, they are not likely to be shopping around for the best price or package. Often, people are emotionally vulnerable and above all they need to be able to trust the person to whom they turn in a difficult period.

Having been through two probates that were easy and one that was extremely complex, I am aware that it can be a difficult process that is often drowned in large yards of paperwork and all kinds of additional complexity. I confess to having some concern that new players coming in do not necessarily have the history or experience to take people through some of those experiences. For that reason, I have a couple of questions for the Minister.

As I understand it—please correct me if I am wrong—once a firm has been approved under the provisions, there is no formal system for reviewing its performance. The system can be reviewed, but there does not seem to be a process for monitoring and reviewing the approved institution. Does the Minister want to comment on that?

Secondly, rather strangely, the process seems to be taking a very long time. ACCA’s original application was made in January 2008 and we are now well into 2009. Were any issues raised during the progress of that application that we should be aware of now that we are being asked to give final approval? The Minister will be aware that Lord Thomas of Gresford had some concerns over how performance and compliance have been monitored. ICAS and the CLC have been approved bodies for about year. Perhaps she will tell us what monitoring has been done by the system—the Government—to evaluate and follow their performance.

On the whole, my colleagues and I take the view that this is not likely to be a hugely significant change in any direction and we do not intend to raise any objections. However, we would like to ensure that there is caution and monitoring, because we are aware that consumers are perhaps at their most vulnerable and least able to complain when they use such services. It is always comforting to know that insurance and complaints procedures are in place, but those are the last things to which consumers should have to resort. The system needs to be self-correcting long before it gets to that point.