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Lord Falconer of Thoroton moved Amendment No. 171:

Page 70, line 39, leave out from beginning to ("of") in line 40 and insert ("If the Lord Chancellor has decided to make the alterations he shall also notify the authorised body").

On Question, amendment agreed to.

[Amendment No. 172 not moved.]

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Lord Falconer of Thoroton moved Amendment No. 173:

Page 73, line 21, at end insert ("and of his reasons for recommending that it be made").

On Question, amendment agreed to.

Clause 35 [Overriding duties of advocates and litigators]:

Lord Falconer of Thoroton moved Amendment No. 174:

Page 20, line 27, after ("act") insert ("with independence").

The noble and learned Lord said: My Lords, the Lord Chancellor promised the noble and learned Lord, Lord Lloyd, on two occasions during Committee stage to consider how Clause 35 might be strengthened to emphasise the obligation on advocates and litigators to act independently. I therefore move Amendment No. 174 and speak to the other amendment in the group which amend Clause 35 so that it now provides explicitly that those who exercise rights of audience or rights to conduct litigation must do so with independence. I am aware that the noble and learned Lord's original amendment to Schedule 5 was intended to result in a wider statement of principle being included on the face of the Bill. That provided that the Schedule 5 powers should be exercised by all involved compatibly with the principle that a strong, independent and self-regulating legal profession should be preserved.

However, I have not changed my view that an amendment in such wide terms is unnecessary and would in any event not have the hoped-for effect. As the Lord Chancellor has said often before, he is committed to an independent and self-regulating legal profession. I hope that I have demonstrated that the principle of self- regulation does not come under threat from the Bill. The powers that are given to the Lord Chancellor by this Bill to change the rules of authorised bodies are strictly circumscribed as we discussed earlier in relation to Amendments Nos. 166 and 167. They can be exercised only after an exhaustive process of consultation with the explicit agreement of Parliament through an affirmative resolution. They may be used only in accordance with the general principles set out in Section 17(3) of the 1990 Act.

We remain of the view that those principles are well founded and comprehensive. We are committed to the principle that all advocates and litigators should be independent in the exercise of their professional duties. That is why Clause 35 has been included in the Bill. Clause 35 already places on a statutory basis the duty which all authorised advocates and litigators have to the court before which they are engaged to act in the interests of justice and the duty to comply with the rules of conduct of their professional body. However, I accept that the feeling of many of your Lordships is that there should be a signpost, as the noble and learned Lord the Master of the Rolls described it, to demonstrate that this statute is framed with the maintenance of independence in mind. I accept it is right that the Bill should include on its face an explicit commitment to the principle of independence, and I beg to move this amendment accordingly.

On Question, amendment agreed to.

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Lord Hacking moved Amendment No. 175:

Page 20, line 32, at end insert--
("(2B) Where any person who exercises before any court a right of audience granted by an authorised body is employed as an advocate and is dismissed from his employment, then he shall be regarded for the purposes of Part X of the Employment Rights Act 1996 as unfairly dismissed if the reason (or, if more than one, the principal reason) for the dismissal is that he acted in a manner which was not consistent with the best interests of the employer, or otherwise failed in his duty to his employer, when such action or failure to act occurred by reason of his compliance with either or both of the duties described in subsection (2A)."").

The noble Lord said: My Lords, noble Lords will recall that particularly in relation to an amendment moved by my noble friend Lord Borrie the House considered the position of employed lawyers and their right to represent their clients in court. I do not want to repeat the argument advanced then. But noble Lords may remember that the noble and learned Lord has some hesitation about giving rights of audience to employed lawyers in consultancy companies, accountants companies and the like. I still hope that I shall be able to persuade my noble and learned friend to extend the rights of audience also to those employed lawyers.

We have had the temporary demise of Clause 31 of the Bill. Therefore we have somewhat of a lacuna at present. Noble Lords opposite nod their heads. That is why the amendments have been attached to Clause 35; they marry naturally to the temporarily demised Clause 31.

In the amendments we seek to give further independence to employed lawyers in an interesting way: by making it a ground for unfair dismissal if those lawyers have been acting not in the best interests of their employers but, following their primary duty, to the court. Under amendments to the employment rights legislation, there are serious consequences for dismissing an employee unfairly. I can read at some length the penalties for unfair dismissal but perhaps noble Lords will accept them from me. I am glad to see the noble Lord, Lord Phillips, nods his head vigorously.

The purpose of the amendments is to assist my noble and learned friend the Lord Chancellor to uphold the rights of employed lawyers. The noble and learned Lord, Lord Ackner, is not in his place; I am not inviting him to come back. I feel strongly that lawyers, in whatever capacity, have total integrity towards the ethics of the profession. Any lawyer has a prime duty to the court; and he should serve that duty.

The amendment gives some fortification to that purpose. If an employed lawyer exercised his ethical duty primarily to the court to the disadvantage of his employers, the employer would be sanctioned seriously if he dismissed the advocate. I beg to move.

Lord Borrie: My Lords, I support the amendment which stands also in my name. A key argument opposing the granting of rights of audience to employed lawyers is that they owe their first duty to their employer, and that only a freelance practitioner can be truly independent and give his or her first allegiance to the court and to justice. If that were true, the cause of justice would be seriously undermined by the daily

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appearance of employed lawyers as advocates in the magistrates' courts and county courts and on tribunals and arbitrations.

It is said, "Ah, that may be so. Their appearance in those courts or tribunals may be for reasons of expediency. The pass has been sold. But it is essential that for the higher courts the purity of independent advocacy, free from the deleterious effects and influences of an employer, must be retained". I have not seen or heard in this House any empirical evidence to the effect that employed lawyers are somehow incapable of giving independent advice or observing professional integrity in their proper duty to the courts and tribunals before which they currently appear. In the public and private sectors, both of which I have experience of in terms of working with employed or in-house lawyers, I know and they know that they are paid to give the best of their professional advice and assistance, irrespective of whether or not that is the advice the employer wants to hear.

Clause 35 is intended to underline the fact that everyone who has a right of audience, or a right to conduct litigation, has an overriding duty to the court to act--and the Lord Chancellor has added "independently"--in the interests of justice. The amendment in the name of my noble friend Lord Hacking is designed to strengthen the natural professional instinct of the employed lawyer to do just that by giving him greater security of employment. The employer would know that if he were unwise enough to put pressure on a lawyer in his employment to do otherwise than act in accordance with his duty to the court and his integrity and to dismiss him for ignoring the employer's instructions, that would, ipso facto, be unfair dismissal under our general employment law.

We all know that the independence of the senior judiciary is protected, and has been for centuries, by the well-known rule and that it needs a vote of both Houses to dismiss them. Our amendment has a similar purpose--to protect the independence of the employed lawyer. I shall not, certainly at this time of night, spend time expounding the many advantages to an employer in being enabled to choose either to use his employed in-house lawyer or an independent practitioner to conduct litigation and to engage in advocacy. But sometimes he will want to do that. He may want an in-house lawyer to conduct only interlocutory proceedings. He may want his in-house lawyer to be only the junior and the Queen's Counsel to be an independent practitioner. But I suggest that it is desirable to enable the employer to have freedom of choice, instead of being burdened by the present costly restrictions imposed by the Bar Council.

During Committee, I gave an example of a construction consultancy company which may want to use its employed barristers, who often have qualifications as engineers or surveyors, to act as advocates not just for itself but for its clients. My noble and learned friend the Lord Chancellor courteously said that he was not inclined to go so far as that. Now is not the occasion to pursue the matter further. However, my noble and learned friend added that he did not rule that out for the future, particularly if one of the existing professional bodies changed its rules to allow such a development. If it is not

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impolite, discourteous or contemptuous to say of my noble and learned friend that he may have had his tongue in cheek at that point, I tried to imagine the Law Society and the Bar Council changing their rules to that effect. I support the amendment in the name of my noble friend Lord Hacking.

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