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Lord Goodhart moved Amendment No. 255:

Page 65, line 16, at end insert ("and the designated judges (acting, in the event of disagreement, by majority)").

The noble Lord said: This is the first in a group of amendments which seek to retain the judicial veto on applications for changes of rules under Part II of the new Schedule 4. The principle has already been discussed. I do not propose to go into it again. However, there is a special feature in connection with Part II. Part II is the only part of the schedule in relation to which there is no parliamentary control. That was true under the 1990 Act--the old version of Schedule 4--but it is equally true under the revised version.

The reason that there is no parliamentary control is reasonably apparent. It is that if a rule change put forward by an authorised body meets with no objection

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by the Lord Chancellor or any of the designated judges, why should it need to be made by a statutory instrument? Rule changes could have a radical effect on rights of audience--for example, by widely extending them as a result of changes in the rules of an existing authorised body--which could have virtually the same effect as admitting a new authorised body. That being so, it seems to me that there is a case for retaining here a degree of judicial control in lieu of parliamentary control and extending to Part II the same principle that we seek to extend to the other parts; that is, that the approval should require the joint action of the Lord Chancellor and at least two of the designated judges. I beg to move.

The Lord Chancellor: As the noble Lord indicated, we have a feeling of deja vu in our discussion of this group of amendments. They are essentially the same as the amendments grouped with Amendment No. 245. They are similarly intended to reinstate the veto of the designated judges or the decisions taken under Schedule 4 to the 1990 Act which will be substituted by Schedule 5 to the Bill.

As the noble Lord said, the difference is that these amendments relate to Part II of the schedule rather than Part I. Part II deals with the procedure for approving alterations in the rules of authorised bodies.

As before, the amendments would not restore the individual vetoes of each judge. They would require decisions to be taken jointly by them and the Lord Chancellor, and in the event of a difference of opinion, by a majority of the designated judges and the Lord Chancellor. That would mean that the Lord Chancellor could act only if at least two of the four judges agreed with him.

The issues of principle are the same in relation to Part I as Part II. I do not repeat the arguments. I do not accept that constitutionally rights of audience are a matter for the judiciary to determine. On the contrary, they are a matter for Parliament to determine. They are statutory rights under the 1990 Act in exactly the same way as rights to conduct litigation, and they are properly subject ultimately to parliamentary control.

The power that is given to the Lord Chancellor by Part II of the schedule is that of agreeing, or not agreeing, to proposals initiated by the authorised bodies to alter those of their rules which relate to rights of audience or rights to conduct litigation. Part II importantly does not give the Lord Chancellor the power to initiate such changes himself. That is an important point. Most applications to alter the rules in practice are routine and uncontroversial. But they still take a substantial time to process under the complex procedures of the 1990 Act. Part II will enable me to approve simple changes quickly after consultation with the designated judges. But more complex or controversial changes will be referred to the new legal services consultative panel and the Director-General of Fair Trading for advice before a decision is taken.

As I have already said, the designated judges will retain a powerful role in advising me on the exercise of the powers in the new Schedule 4 to the Act. I repeat

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that it is unlikely that we will disagree about many or any applications made under the Act. However, I agree with the noble and learned Lords the Lord Chief Justice and the Master of the Rolls that the current system does not work. Responsibility for making changes and taking decisions should lie with the Lord Chancellor as a Minister accountable to Parliament. I hope that in the circumstances the noble Lord will agree to withdraw the amendment.

Lord Goodhart: Naturally, I am disappointed with the noble and learned Lord's reply. While I agree that parliamentary control is appropriate, there is under Part II no question of any parliamentary control. That is why the position is somewhat different. Obviously, I have no intention of pressing the amendment tonight and I beg leave to withdraw it.

Amendment, by leave, withdrawn.

[Amendments Nos. 256 to 258 not moved.]

Lord Goodhart moved Amendments Nos. 259 and 260:

Page 66, line 31, leave out ("may") and insert ("shall").
Page 66, line 45, leave out ("may") and insert ("shall").

On Question, amendments agreed to.

[Amendments Nos. 261 and 262 not moved.]

Lord Goodhart moved Amendment No. 263:

Page 67, line 36, at end insert--
("( ) The Lord Chancellor shall not refuse the application unless he has sought the advice of the Consultative Panel.").

The noble Lord said: The amendment relates to Part II, the approval by the Lord Chancellor of rule changes sought by authorised bodies. On such an application, the Lord Chancellor may ask advice from a consultative panel, but does not have to do so. Paragraph 10 allows the Lord Chancellor to act without consulting the panel after seeking and considering advice from designated judges.

If the rule changes are straightforward and uncontroversial, and the Lord Chancellor proposes to approve them, I see no need for the panel to consider them. However, I believe that it would be inappropriate for the Lord Chancellor to reject an application without consulting the panel. The authorised body would have a justifiable grievance if he did so. The amendment would prevent that. I beg to move.

Lord Falconer of Thoroton: I accept in principle the purpose of the amendment. The noble Lord is right in saying that the purpose of not consulting would be in an uncontroversial application. If the Lord Chancellor is to refuse an application it is appropriate that he should consult the consultative panel. He would do so in practice and there is no reason why that should not be put on the face of the Bill. I ask the noble Lord to withdraw the amendment on the basis that we will come back with another one because we are unsure of the drafting.

Lord Goodhart: In those circumstances, I beg leave to withdraw the amendment.

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Amendment, by leave, withdrawn.

[Amendments Nos. 264 to 266 not moved.]

Lord Goodhart moved Amendment No. 267:

Page 68, line 1, leave out from beginning to end of line 43 on page 69.

The noble Lord said: The amendment relates to the same point. It proposes to leave out Part III altogether. In order to avoid having to go through the issue again, it might be convenient to deal with further amendments which seek to leave in Part III but require the consent of two of the designated judges. The same principle applies to Part IV.

The principle has been discussed at length. The power of the Lord Chancellor under Part III to enforce rule changes on authorised bodies has undoubtedly aroused more objections than any other part of the Bill. It has been attacked in particular by the noble and learned Lord, Lord Steyn, in a public lecture and Mr. Sydney Kentridge in an opinion referred to by the noble and learned Lord, Lord Ackner.

When those two people speak it is wise to listen. Neither is in any sense a professional trade unionist. Both are people of strong liberal commitment, both coming from the Republic of South Africa. During the apartheid era, the South African legal profession and judiciary had a relatively good record. They displayed a high degree of independence. It could not prevent the enactment of unjust laws but at least it ensured that those charged with breaches of the laws were given a fair trial. As Mr. Kentridge pointed out, one of the South African Government's objectives was to obtain control over the legal profession, to impose their will on it and to get rid of its inconvenient independence, and they were unable to do that.

I am not suggesting that the present Lord Chancellor would in any way abuse his powers under Part III. That is not a mere conventional statement. On these Benches we recognise fully his achievement in introducing the Human Rights Act and taking it through your Lordships' House. That illustrates his profound personal commitment to human rights. But in giving himself powers which he would exercise benevolently, he is also giving his unknown and unpredictable successors powers which they could exercise malignly.

The Lord Chancellor has moved some way from the original proposal by accepting that rule changes can be made only by order approved by affirmative resolution, which was not the position originally in the White Paper. But I do not believe that that is enough. I have already expressed doubts as to whether even the affirmative resolution procedure is an adequately effective safeguard. That power, if wrongly exercised, could do very grave damage to the independence of the legal profession.

I am not an absolutist on this issue. Amendment No. 271 allows the Lord Chancellor to make an order for rule changes if two or more of the designated judges approve. If the Lord Chancellor were minded to accept that amendment, I should not seek to press this one. But I do not believe that the Lord Chancellor should have power, even if that power must be endorsed by statutory

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instrument, to enforce rule changes of authorised professional bodies even if not a single one of the designated judges agrees with it. If that happens, either the Lord Chancellor should back down or he should impose rule changes by primary legislation. I have never suggested for a moment that that would not be an appropriate course.

I turn now to amendments dealing with Part IV on this issue; that is, Amendments Nos. 275, 276 and 280 to 284 inclusive. They give the Lord Chancellor power to revoke designation as an authorised body. Paragraph 25(2) in Schedule 5 provides when that designation can be revoked. Under paragraph 25(2)(a) or (b), there is obviously no problem where the revocation is agreed by the body whose designation is being revoked. But the Lord Chancellor has a power to recommend revocation under paragraph 25(2)(c) where he is satisfied,

    "that the circumstances at the time when he is considering whether to make the recommendation are such that, had that body then been applying to become an authorised body, its application would have failed".

In theory, that power can be exercised so as to revoke the designation of the Bar Council or the Law Society. That would happen only if a dictatorship assumed power, and no statute or constitution can give an ultimate protection against a violent dictatorship. But that illustrates the width of the power.

Furthermore, the test for revocation is the Lord Chancellor's belief that had the body in question been applying to become an authorised body, that application would have failed. That is a very unsatisfactory test because Part I, which provides for approval, contains no criteria for granting the application. Therefore, the test is doubly subjective.

The Lord Chancellor's satisfaction that the relevant circumstances exist is necessarily subjective, as is his decision as to why the application would have failed in the absence of any identifiable criteria. For the reasons which I have already stated, I do not believe that the need for approval by Order in Council, by the affirmative resolution procedure, is, in relation to powers of such outstanding constitutional importance, a sufficient safeguard.

Revocation of the rights of an existing body has a far more serious effect on the administration of justice than the extension of rights to a new body. I believe that the consent of at least two of the designated judges is necessary before an Order in Council, under Part IV, can be made. Once again, if not, then the Lord Chancellor should have to enact primary legislation.

9.15 p.m.

The Lord Chancellor: I certainly agree that when Mr. Sidney Kentridge Q.C. or the noble and learned Lord, Lord Steyn, speak, it is wise to listen but it is not obligatory to agree with them.

I recognise that Part III of the new Schedule 4 is highly controversial. But the power is not unfettered either in its scope or in its exercise. It relates only to those rules and regulations which govern rights of audience or rights to conduct litigation. I accept that it

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should be used only to remove undue restrictions on the exercise of those rights. I have already said that I will bring forward an amendment to this effect. The exercise of the power is subject to an extensive consultation procedure and then to approval by both Houses under the affirmative procedure.

I have to say that I cannot agree with the noble Lord, Lord Goodhart, that approval by both Houses under the affirmative procedure is insufficient either in practice or in constitution. Because of the requirement for affirmative approval the possibility of some maverick Lord Chancellor of the future suddenly taking it into his head to re-write the rules of the legal profession and being subject to no control cannot be substantiated.

We have had this argument already. I will be as brief as I can. There are several lines of argument advanced against this power. One is an absolutist position: that it is constitutionally wrong for the Executive and the legislature to have a power of this nature over the legal profession. In this view rights of audience in particular are and have been a matter for the judiciary where these exclusive rights of audience were delegated or conferred by the judiciary on the Bar at some remote period of history, a transaction of which unfortunately no written record survives.

My noble and learned friend Lord Falconer demonstrated at Second Reading, I would suggest conclusively, that the argument that Parliament and the Executive simply have voluntarily abstained from intervening in rights of audience is simply inaccurate. Parliament has often legislated on the subject, not least in the Courts and Legal Services Act 1990 itself. Since that Act all rights of audience have been placed on a statutory basis, including those of the Bar.

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