Session 2010-11
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General Committee Debates
Delegated Legislation Committee Debates

Draft Legal Services Act 2007 (Approved Regulators) Order 2011

The Committee consisted of the following Members:

Chair: Mr Graham Brady 

Brake, Tom (Carshalton and Wallington) (LD) 

Burden, Richard (Birmingham, Northfield) (Lab) 

Cairns, David (Inverclyde) (Lab) 

Corbyn, Jeremy (Islington North) (Lab) 

Djanogly, Mr Jonathan (Parliamentary Under-Secretary of State for Justic e )  

Donaldson, Mr Jeffrey M. (Lagan Valley) (DUP) 

Halfon, Robert (Harlow) (Con) 

Harris, Mr Tom (Glasgow South) (Lab) 

Hemming, John (Birmingham, Yardley) (LD) 

Henderson, Gordon (Sittingbourne and Sheppey) (Con) 

Laing, Mrs Eleanor (Epping Forest) (Con) 

Reynolds, Jonathan (Stalybridge and Hyde) (Lab/Co-op) 

Rotheram, Steve (Liverpool, Walton) (Lab) 

Slaughter, Mr Andy (Hammersmith) (Lab) 

Stewart, Rory (Penrith and The Border) (Con) 

Tredinnick, David (Bosworth) (Con) 

Wallace, Mr Ben (Wyre and Preston North) (Con) 

Wright, Jeremy (Lord Commissioner of Her Majesty's Treasury)  

Mark Oxborough, Committee Clerk

† attended the Committee

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Seventh Delegated Legislation Committee 

Thursday 31 March 2011  

[Mr Graham Brady in the Chair] 

Draft Legal Services Act 2007 (Approved Regulators) Order 2011 

8.55 am 

The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly):  I beg to move, 

That the Committee has considered the draft Legal Services Act 2007 (Approved Regulators) Order 2011. 

Good morning, Mr Brady. It is a pleasure to serve under your chairmanship this morning. The power to make this order is paragraph 17(1) of schedule 4 to the Legal Services Act 2007. The order seeks to designate the Institute of Legal Executives so that it can allow its members to conduct litigation, and regulate them in doing so. 

In practice, the extent to which ILEX can deploy this right will be limited by its own regulatory framework, which will mean that the only ILEX members who can conduct litigation if the order is made will be associate prosecutors employed by the Crown Prosecution Service. 

The Legal Services Act classifies the conduct of litigation as a reserved legal activity which can be carried out only by a person who is either “authorised” or “exempted” by the Act. At present, associate prosecutors are exempted to carry out specific litigation work under statutory designation by the Director of Public Prosecutions. However, this designation ends on 1 May this year. If replacement provisions are not made under this order, associate prosecutors will not be able to carry out unsupervised litigation work after that date. This represents a large proportion of the CPS workload in the magistrates courts, and direct supervision by Crown prosecutors would have a significant knock-on effect for CPS’s higher court work. The consequences for the CPS and the wider criminal justice system would be considerable. 

The forthcoming termination of the DPP’s designation of associate prosecutors was brought about by concerns expressed during the passage of the Criminal Justice and Immigration Act 2008 that associate prosecutors are not independently regulated or subject to a professional code of conduct. It was intended that arrangements should be made to bring them within ILEX’s regulatory and professional framework, since ILEX is already an approved regulator for other reserved legal services. 

Therefore, a voluntary arrangement was made between the CPS and ILEX in 2008, which requires associate prosecutors to become members of ILEX in order to be designated by the DPP. In practice, therefore, all associate prosecutors have been subject to regulation by ILEX since that time. In essence, the order simply places that arrangement on a statutory footing. 

ILEX has drafted specific rules that will set out the processes by which the work of associate prosecutors will be integrated into ILEX’s regulatory regime. Under these rules, associate prosecutors will be required to

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abide by ILEX’s code of conduct and undertake a specified amount of continuing professional development. In addition, ILEX will review and assess associate prosecutor training programmes. A memorandum of understanding has been agreed with the CPS that sets out the working arrangements for the regulation of associate prosecutors, including the handling of complaints, ILEX’s information requirements and a facility for ILEX to carry out its own inspections and reviews. 

Both ILEX and the Legal Services Board have consulted on ILEX’s application for designation. The responses were broadly supportive, including those from other legal services regulators. In making its recommendation to the Lord Chancellor about this order, the Legal Services Board has satisfied itself that any issues arising from consultation have been addressed. 

In anticipation of the order, ILEX has applied to extend the scope of its regulatory framework so that it can grant a wider range of litigation rights to a wider range of its membership. It falls to the Legal Services Board to determine that application. Clearly, any extension to the range of ILEX practitioners who can conduct litigation independently could have a significant impact on the legal services market. The Legal Services Board has a statutory duty to promote competition within that market, and I would therefore expect it to evaluate this potential impact carefully in considering ILEX’s wider application. I commend this order to the House. 

8.59 am 

Mr Andy Slaughter (Hammersmith) (Lab):  It is a pleasure to be here under your chairmanship this morning, Mr Brady. You and no doubt other members of the Committee will be pleased to hear that I do not intend to detain the Committee long. We are not opposing the order. As the Minister says, it largely replicates the current position under the Criminal Justice and Immigration Act 2008 relating to the rights of audience of associate prosecutors and the restrictions that continue to be placed on them in respect of the type of work that they can undertake in the magistrates court. Secondly, ILEX is already an approved regulator. Its powers of regulation extend into the conduct of litigation, and that flows from the Legal Services Act 2007, the aim of which was to liberalise and modernise the regulation of the legal profession. Those two Acts were excellent pieces of Labour legislation so it would be churlish of me to criticise them or, indeed, to criticise the ability of legal executives, who the Minister and I know undertake a great deal of extremely important work to high standards. The Minister will probably not agree with me on this, but sometimes one finds the level of expertise among legal executives as a result of the work that they do to be higher in practice than that even among solicitors. 

At a time when we see daily restrictions on access to justice and the availability of legal services, we want to encourage the intention and practice of the Legal Services Act in broadening access where possible. As the order restricts the powers and activities essentially to what is in place through the voluntary agreements and the powers that elapse under the 2008 Act, there is little more to be said. 

As the Minister said towards the end of his remarks, there is a proposal to go far wider and what we are enacting today in the order will allow that to happen,

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although the restriction that will continue among the profession for the time being will be that which is already in practice. 

Concern has been expressed that in widening the number of people who have rights of audience and the extent of those rights, the quality of representation and of justice received, whether in a magistrates court or elsewhere, should not be interfered with. The Minister will see in the explanatory memorandum that in response to the consultation the Lord Chief Justice 

“raised a concern that any potential future extension of APs’ rights must be subject to full consultation with the judiciary and other interested parties.” 

I would welcome an indication today that if there is any further determination of applications from ILEX or anyone else, there will be full consultation to ensure that where rights of audience are likely to be extended, it is done in the public interest and results in no diminution in the quality of representation. 

The Law Society has in the past—not about this case—expressed strong concerns in relation to that as a general principle. The president of the Law Society said: 

“We believe that ILEX members should only be granted the rights to carry out the proposed activities if they were able to demonstrate that they meet the same high standards as solicitors.” 

A member of its criminal law committee has been reported as saying, rather more trenchantly, that 

“the eligibility criteria for associate prosecutors, who require no academic or legal qualifications, gave rise to ‘serious concerns’ for the quality of justice and potential for miscarriages of justice.” 

He said: 

“On public interest and interest of justice grounds there is no justification for this—it’s merely a case of introducing justice on the cheap”. 

While I would not endorse those comments as they stand—ILEX does an excellent job in regulating its part of the profession, and in its other functions, and legal executives do an excellent job—if the qualification and role of associate prosecutors is extended beyond what is currently envisaged in the order, that may cause concern among other members of the judiciary and other parts of the profession. I would welcome an assurance from the Minister not only that there will be full consultation but that the Government will give full consideration in any further application that is made for an extension of rights to testing stringently the quality of justice provided in the magistrates courts, which is extremely high and consistent as a rule, and ensuring that it will not be affected. 

There are no other points that I wish to raise with the Minister this morning. This is a sensible proposal that simply clarifies the position and puts it on a more statutory basis. It may improve the regulatory system. 

9.5 am 

John Hemming (Birmingham, Yardley) (LD):  I have a couple of questions to put to the Minister about the interplay between regulatory areas. If legal executives are participating in litigation, they are similar to solicitors. A firm of solicitors, Davis and Company of Amersham, who are currently refusing to talk to me, applied for an injunction to stop Parliament being told about toxic substances in drinking water on ships. That is contempt of Parliament. Should not the regulators ensure that those regulated by them do not apply for court orders that are in contempt of Parliament and have the objective

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of keeping Parliament in the dark about serious problems in society? That is a wider question. With the growing number of super-injunctions and hyper-injunctions, there is an interesting question whether the regulator should say, “Those people regulated by ourselves should not apply for orders to keep Parliament in the dark.” 

There is a similar question about the interplay between the criminal law and the regulatory processes. The hon. Member for Harlow and I have concerns about a case in his constituency which has been dealt with by the Legal Complaints Service under reference CRO/110536-2009/PJL/PL. The case relates to some properties that were transferred, potentially fraudulently. A letter from the Legal Complaints Service to the complainant says: 

“I understand that it is your contention that your husband did not sign these transfers…and that the signatures were forged. As I have explained previously this is not an issue that we can investigate and it is a matter which you would need to report to the Police”. 

There is a complex interlinking issue here. Obviously, for the purposes of prosecution criminal offences have to be investigated by the police. There is no question about that. But where an allegation is made to a regulatory body, be it ILEX, the Solicitors Regulation Authority or whatever, that something has been fraudulent, should they say, “We are just not going to look at it because it is an allegation of fraud?” Those are the two relatively complex questions applying to ILEX and the other regulator. 

9.7 am 

Mr Djanogly:  As the hon. Member for Hammersmith pointed out, the order effectively replicates the current position. He was right to take the opportunity to congratulate ILEX on the quality of its work and the importance of its place in the wider legal market. On behalf of the Government, I would like to say that we feel exactly the same. The hon. Gentleman asked a specific question about widening the rights of audience. In the broadest sense, let me say that the Government take the view that maintaining quality and encouraging better quality is absolutely the right way to go. The process of quality assurance is being agreed now between members of the legal profession and the judiciary, and we hope that it will drive up the quality of court representation. 

The hon. Gentleman asked about the application of those concepts in the context of the order. The Criminal Justice and Immigration Act 2008 allows associate prosecutors to conduct criminal proceedings in magistrates courts subject to the limitation that they may not deal with trials involving any offence punishable by imprisonment. Those rights will not change as a result of regulation by ILEX. He asked whether ILEX intended to amend its regulations to allow more members to conduct litigation and if so, how this would be handled. Yes it does. In anticipation of the order, ILEX has already submitted an application to the Legal Services Board to enable it to allow suitably qualified members to conduct litigation in civil and matrimonial matters. This would require the amendment only of ILEX’s regulatory framework, so only the LSB’s approval is required. However, and appreciating that the hon. Gentleman made a specific point about that, I will certainly draw the LSB’s attention to all of the points made in this debate so that it can reflect on them in its consideration of ILEX’s application. 

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I will also write to the LSB to ask it to consider what the appropriate process might be for consideration of such an application. Whereas the LSB normally focuses on the effectiveness of the process and the impact on the regulatory objectives in considering whether to approve a rule change, I consider that the slightly unusual circumstances of this application might merit wider consultation and engagement. I can also confirm that there are no current plans to extend rights to APs. The Government will consider any such extension carefully to ensure that the interests of justice are met. 

The hon. Member for Birmingham, Yardley discussed the regulators in a much broader context than this order, I have to say; but he made a valid point, which was that regulators should not be able to apply for court orders that are in contempt of Parliament. 

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John Hemming:  The question was whether the regulators should require that those regulated by them should not act in contempt of Parliament. 

Mr Djanogly:  This goes to the heart of the Legal Services Act 2007. The regulators are independent of Parliament. The hon. Gentleman asked a specific question, and if he does not mind I will come back to him in writing. 

I think that I have covered all the points, and I commend the order to the Committee. 

Question put and agreed to.  

9.11 am 

Committee rose.