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It is therefore desirable to ensure that the prohibition on authorised persons serving as members of the Consumer Panel is not applied to representatives of corporate consumers. The amendments, particularly Amendment No. 40, are designed to bring that about. I thank the City of London Law Society for the representations that it has made. I particularly thank the group legal director of Emap, Nick Folland, who came to see me with the City of London Law Society and explained this in much greater detail. I hope that the Minister will agree to the amendment.

Lord Clinton-Davis: My Lords, I want to clarify the phrase “non-practising solicitor”. Does the solicitor concerned hold a practising certificate? That is vital, but there is no mention of it here. In other words, should the holding of a practising certificate be the criterion?

Lord Hunt of Wirral: My Lords, I am very grateful to the noble Lord for having given me notice of his question. I have particularly in mind people who have qualified as lawyers but, say, have pursued a more corporate career and have become a company secretary or some equivalent. That company secretary will often also head up the in-house legal department. In many ways, I am trying to tempt the Minister to see that the amendments do not seek to create a huge opening in the requirements that she has laid down, but instead deal with people who are qualified but non-practising solicitors; that is, they do not hold themselves out to act on behalf of clients. Often they will not have a practising certificate, as such, but they consume legal services. Under the Bill, they would be barred from serving on the Consumer Panel. I beg to move.

Lord Clinton-Davis: My Lords, all I am asking is that the noble Lord considers my point further. It may be possible to rebut it, but I think that it is relevant, so will he consider it again?

Lord Hunt of Wirral: Yes, of course, my Lords.

Lord Evans of Temple Guiting: My Lords, my noble friend should really save his remarks for a speech rather than intervening on Report in the way in which he has.

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Lord Carlile of Berriew: My Lords, we on these Benches broadly support the amendment that the noble Lord, Lord Hunt of Wirral, has moved so eloquently. On the point made by the noble Lord, Lord Clinton-Davis, which is plainly important, will the Minister confirm in her reply that nothing in the clause excludes the appointment to the Consumer Panel of a qualified lawyer who does not hold a practising certificate? My understanding of the clause is that the many lawyers who no longer hold practising certificates may be on the panel. Indeed, those of us who have served as chairmen or members of various tribunals and panels around the country at various times know the immense value that that cohort of people, who are often volunteers, give to the decision-making process at various levels.

Secondly, we have heard from the Minister and ministerial colleagues during the debates on this Bill that it is for the board to make decisions, wherever possible, on how its functions are carried out. Surely it is right for the board that selects members of consumer panels to be able to make decisions on whether non-practising lawyers who hold practising certificates should be members of the Consumer Panel. I understand the direct answer to the question asked by the noble Lord, Lord Clinton-Davis, to be, “Yes, this is intended to cover people who hold practising certificates as solicitors, albeit not in fact practising themselves”.

A large body of business does huge amounts of what one might loosely call block litigation—for example, in relation to debt collecting on a very large scale for credit card companies or councils that have not received payments of council tax. The lawyers who manage that kind of work are non-practising, but they are about as large consumers of legal services as one can imagine. I would suggest, in common with the noble Lord, Lord Hunt of Wirral, that that group ought to be regarded as important consumers. In that context, would it not be right for the board, when it sets criteria and decides who should be appointed to the Consumer Panel, to be able, although not obliged, to select applicants from that cohort to become members of the panel?

Lord Campbell of Alloway: My Lords, my name is on this amendment. I shall be very short. I declare an interest as a qualified but non-practising member of the Bar. I hope that, having listened to the reasons given in support of this amendment, your Lordships will accept that the amendment is appropriate, indeed requisite, as a matter of practical reality.

Lord Kingsland: My Lords, I rise simply in response to a matter raised by the noble Lord, Lord Carlile of Berriew, when he referred to certain categories of non-practising lawyers as being important consumers of legal services. Throughout the debates on this Bill, the Government have talked about the importance of consumer interests, which no one would deny are very important. But we have not gone as far as looking at the composition of that consumer interest.

I have been told—I do not know whether it is true—that around 40 per cent of consumers of legal services are either government or local government

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agencies, or other public authorities that are indirectly related to government agencies. That may or may not be true, but it would be extremely interesting for your Lordships’ House if the Government were to do an analysis of the nature of the consumers of legal services. Often the Government refer to consumer interest; but it must be equally true that sometimes one consumer’s interest is not the same as another’s. Indeed, there may be occasions when consumer interests conflict.

Baroness Ashton of Upholland: My Lords, I am extremely grateful for this interesting debate. I agree with a large amount of what has been said, but there is a problem with these amendments because they technically do not work. It is very interesting to think about what we mean by the consumer in this context. I do not know whether the figure of 40 per cent is correct. It would not surprise me. If we have any statistics on that, I shall try to dig them out today and circulate them around your Lordships’ House.

In Committee, we talked a lot about the rationale for setting up the Consumer Panel in the Bill and the opportunity to bring consumers together in order to have that input in a very particular way. There were issues, but I am sure that noble Lords were broadly content with what we are seeking to do. Consumers encompass a wide range of different people. Individuals and small businesses consume legal services, as indeed do government departments, big business, voluntary organisations and others. Under the clause, the Consumer Panel is designed to represent those interests and, indeed, is required to think about its representation.

I accept the point made by the noble Lords, Lord Carlile and Lord Kingsland, that we should think about the role of the board, but we want to make it clear in legislation who we want to ensure is included. It is also true that non-practising but legally qualified professionals could serve on the panel. Where we differ slightly is on the important issue of who should sit as a representative of that corporate body. The noble Lord, Lord Hunt of Wirral, answered that by saying that, through their legal departments, many large corporate bodies instruct outside legal professionals, and I maintain that the consumer in that context is the person asking the legal department to instruct the external legal professionals. Just as I, as a Minister, have legal advisers who will instruct parliamentary counsel or indeed external legal professionals to support and advise me, so, too, noble Lords who are not themselves legally qualified in particular areas will instruct as individuals. We are seeking to ensure that the consumers on this panel are not those practising in the legal profession, wonderful though they may be.

4 pm

Lord Carlile of Berriew: My Lords, I apologise for interrupting the noble Baroness, but I wonder whether she would reflect on what she has just said. The voluntary sector, particularly citizens advice bureaux, already instructs lawyers and will remain in a position to do so, perhaps increasingly so, but its representatives will not be excluded from being on the Consumer Panel. There is an inequality between those who happen to be qualified and hold practising certificates and who instruct lawyers formally, and voluntary organisations doing exactly the same. It does not bear logical analysis.

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Baroness Ashton of Upholland: My Lords, I take the noble Lord’s point, but let me try again. The point that I am making is that this is a Consumer Panel that, under the terms of the Bill, does not have on it people who are qualified practising lawyers. Those who are not practising but might be legally qualified will, in our view, be appropriate to sit on the panel, because they would be representing their corporate body or organisation in a different way. That is the fundamental principle behind what we are seeking to do with the Consumer Panel. We want a range of people who, as the noble Lord, Lord Hunt of Wirral, was absolutely right to say, are representative of the different kinds of organisations and individuals who consume legal services, but we want to look specifically for people who are not themselves practising legal professionals. They may be qualified, but they will be acting as a corporate consumer, a small business consumer or an individual consumer in this context. It is an important point, but it does not take away from ensuring that a range of voices is heard on the Consumer Panel. This is deliberately designed to be about the role of the consumer, not the consumer as a lawyer talking about legal services.

Lord Hunt of Wirral: My Lords, I am grateful to the Minister for giving way. Just to clarify the point, is she saying that the person within a large corporate consumer of legal services who asks the company secretary or the in-house legal department to instruct an outside firm could well sit on the Consumer Panel? Would it be the individual running that part of the business? Is the noble Baroness saying that that person could represent adequately the views of the huge area of corporate consumers of legal services?

Baroness Ashton of Upholland: My Lords, if the person is not a practising lawyer—they may be legally qualified but not practising—that is what I am saying. To return to the original point made by the noble Lord, within the Consumer Panel it is important that the breadth of consumer interests is represented. The question is how one best achieves that. We would argue that it is best achieved by taking people from large and small organisations, and perhaps individuals, who are consumers but not practising lawyers—they may be legally qualified, but not practising. How a business chooses to do that is up to the business itself. For example, one would ask a large business in the retail sector to consider who best would represent it. What we would not be looking for is the practising head of that business’s legal department. It might choose an individual who is legally qualified but not practising. That is all there is between us here.

Lord Campbell of Alloway: My Lords, before the Minister sits down, I have a question about procedure. Does she know why any objection was made to the noble Lord, Lord Clinton-Davis, asking my noble friend a relevant question?

Baroness Ashton of Upholland: My Lords, the only concern on the government Benches is that we are on Report. We have had six full days in Committee, which were extremely interesting. There are practices, which noble Lords developed long before I came to your Lordships’ House, to enable us to engage with the

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business on Report and complete it satisfactorily. There are 24 groups for this evening, and another for the third day; I would like to be able to consider them all. Some of the debates we have had before—although, I agree, not this one—and we are trying in our own way to ensure that noble Lords have the time to consider what I know are the important issues ahead.

Lord Hunt of Wirral: My Lords, the most important point that the Minister has just made is that she has no criticism at all of her noble friend Lord Clinton-Davis, and I thank him for making a very important point. I have looked through the Companion and cannot see any prohibition. Although we are on Report and we should not have too much toing and froing, the noble Lord had an important point to make, and I am grateful to him for making it. I am also grateful to the Minister for clarifying exactly where we stand on this. We have tried a few times to get it right. I must go back and see whether we can find a way through this, and perhaps return to it at Third Reading. I am grateful to my noble friends for their support. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 41 and 42 not moved.]

Lord Kingsland moved Amendment No. 43:

(a) the extent to which its general policies and practices are consistent with its duty under section 3; and (b) any policy statements on which it proposes to issue under section 48.”

The noble Lord said: My Lords, I shall also speak to Amendments Nos. 44 and 45. The amendments would require the Legal Services Board, in addition to the existing requirement on it to consult the Consumer Panel, to consult appropriately with approved regulators and representatives of the regulated sector.

The Bill already provides for the Legal Services Board to establish a Consumer Panel and to consult it extensively but it does not contain equivalent arrangements for consulting representatives of the regulated sector. In Committee the Minister resisted the suggestion that a practitioner panel should be established alongside the Consumer Panel. She argued that such a panel was unnecessary, given that, unlike in the financial services sector, where a practitioner panel has been established, there are already well established representative bodies for the legal profession. We accepted her approach. It is surprising, therefore, that the Government have not brought forward an amendment concerning consultation with the regulated sector. In Committee the Minister made it clear that, while the Government were opposed to the creation of a practitioner panel, on the grounds that there were already effective arrangements for representation, she accepted in principle my amendment, which would have required the Legal Services Board to give the same consideration to representations from approved regulators as it gave to those from the Consumer Panel. I refer her to col. 937 of Hansard of 22 January.

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The noble Baroness said at col. 942 that she would come back to the issue on Report. She repeated her support for this in later discussions in Committee. On 21 February, in discussing an amendment concerning the “polluter pays” principle in the Office for Legal Complaints, she said:

The noble Baroness repeated the point on the last day of Committee when discussing an amendment to require the board to consult on the extent to which its policies are consistent with its duty under Clause 3 to act in accordance with best regulatory practice. She said:

to consult—

I recognise that the Bill already requires the Legal Services Board to consult before exercising a number of specific functions. For example, Clause 49 requires the board to consult before issuing policy statements. Clause 52 requires some consultation before the board exercises its powers in relation to regulatory conflict. Clauses 30 to 36, which provide powers about setting performance targets, making directions, issuing public censures and imposing financial penalties, require the board to consult the approved regulator concerned before exercising those powers. But there is no overall requirement to consult on the board’s overall approach to the discharge of its functions and, in particular, on whether the scale and scope of its proposed activities are appropriate and proportionate.

These amendments would fill that gap. The general duty to consult suggested in Amendment No. 43 would require the board to consult about its general policies and practices. That is supplemented by the duty in Amendment No. 44 to establish effective arrangements for consultation with approved regulators and other representatives of authorised persons. I beg to move.

Lord Hunt of Wirral: My Lords, the Minister certainly has a case to answer. My noble friend has set out the background very well. It was my amendment in Committee to establish a practitioner panel. I listened carefully to the Minister and, in view of what she said, decided to dispense with the amendment and not seek to bring it before the House again; but that was on the basis that I had been comforted by her assurances, set out so clearly by my noble friend. I look forward to hearing why we do not have a government amendment and exactly how the noble Baroness intends to proceed.

Lord Whitty: My Lords, I oppose the cumulative effect of the amendments but not because I do not think that the views of front-line regulators have to be taken into account and that consultation should be protected for them, but because Amendment No. 45

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refers to treating front-line regulators in the representative as well as the regulatory capacity in the same way that Clause 10 covers the Consumer Panel.

The procedures in Clause 10 are there for the Consumer Panel because there is an asymmetry of information and expertise, which needs to be taken into consideration in the Bill so that consumers have some right of representation. Were we to give the same representation rights to the Law Society and the Bar Council, for example, they would have the right to object to any decision of the board and would have the same degree of attention that the Consumer Panel is given in order to redress the imbalance in the normal relationship between the legal services and consumers. I do not fundamentally object to those bodies having a consultative relationship, but I object to the view that they should have the same protection that Clause 10 gives the Consumer Panel. That would unbalance what Clause 10 is intended to provide for the Consumer Panel.

4.15 pm

Lord Campbell of Alloway: My Lords, the noble Lord, Lord Whitty, returns to the question of intervention, on which there have been many discussions. Amendments Nos. 43 and 44 are wholly consistent with Sir David Clementi’s original recommendations and the Government’s earlier proposed intention to ensure that the LSB powers of intervention were exercised only in cases where there is a serious impact on regulatory objectives taken as a whole, rather than a merely adverse impact on one or more of those objectives. Consultation, as proposed by these amendments, is an essential means to implement the powers of intervention in a manner originally intended by the Government to maintain the supervisory role and an effective, efficient front-line regulation by the approved bodies.

Your Lordships may think that this matter of principle, to which we return again and again, ought to be recognised as such in the Bill. One might group together certain clauses, such as Clauses 3 to 5 and 40 to 43, for such an exercise. On doing that, one has to distinguish between this statement of principle, which applies only to the LSB and would serve, if expressed, as an amendment to Clause 3, and Amendment No. 5, however redrafted, which would be of generic application to all regulatory bodies and continue to serve as an amendment to Clause 1. I am grateful for the opportunity to contribute.

Lord Carlile of Berriew: My Lords, I will make a very brief intervention about a question of confidence between the Legal Services Board and the profession. The Bar Council, for example, or individual barristers can make whatever representations they like to the Legal Services Board and the Consumer Panel. I have no doubt that such representations will be taken into account, but I am sure that the Bar Council, the Law Society and other representative bodies will want to work in partnership with the Legal Services Board. In doing so, they will want to take their members with them. They need to persuade their members that they are taking them with them. A requirement to consult would give practitioners, particularly in the larger parts of the legal profession, confidence that the Legal

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Services Board will really listen to representations. I do not myself believe that the amendments would make any real difference to the process that will be carried out but they might make a very significant difference to the level of confidence that exists between, for example, the Bar—my own profession—and the Legal Services Board.

Baroness Carnegy of Lour: My Lords, another voice from a non-lawyer might not be inappropriate. I listened carefully to what the noble Lord, Lord Whitty, said, and I see his point. The idea of the panel is to ensure that consumers have a proper voice. To have a provision in the Bill that counteracts that strongly is not a good plan. What the noble Lord, Lord Carlile, has just said is also important. The least that lawyers can expect is to be able under the Bill to make representations of a kind mentioned in these amendments, but that must not in any way act against the provision of the panel. I cannot follow the legal theology of all this, but it seems common sense that lawyers must know that they can make representations, because that is very important to the profession, which has regulated itself up to now—in my view, very adequately.

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