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I also congratulate the noble Lord, Lord Neill of Bladen, on bringing forward an amendment that is the best of all those that he has tabled. It gives us a chance to have an in-depth look at this experiment, which I am sure the House would want us to do.

Lord Maclennan of Rogart: My Lords, I am prompted to intervene briefly because of the intervention made by the noble Lord, Lord Elystan-Morgan, who suggested that there is an alternative course of action. One of his propositions was that we might, if this proved in practice to be damaging, seek to reverse it by an Act of Parliament. I am bound to say that that would be enormously difficult. If Part 5 goes forward, it will create property rights. It seems to me that, under the provisions of the Human Rights Act, we will find it extraordinarily difficult to embark on a dismantling of this scheme. It is improbable that we could embark on such a course with commensurate ease. The very difficulty of reversing after we have legislated makes it so much more important that we take our time now and exhaust every possible avenue of inquiry into the potential impact of what is being done.

In the light of the extraordinarily wide range of views that have been expressed on this subject right across your Lordships’ House, not once but on a number of occasions, I hope that even at this late hour the Government will stand back from their too certain assertions as to what the consequences will be and recognise that further independent advice would be entirely appropriate.

Baroness Ashton of Upholland: My Lords, I am grateful for your Lordships’ contributions to this important debate. Noble Lords will know that we have debated at great length in Committee and on Report the value and importance of alternative business structures, noble Lords’ concerns about how effectively they might operate and the safeguards that the Government have built into legislation to enable us to stop alternative business structures, to deny them any life without condition and to make sure that we do this in a cautious and step-by-step manner, as noble Lords would wish.

The noble Lord, Lord Kingsland, has brought back to your Lordships’ House the question about access to justice. I was very grateful to the noble Lord, Lord Neill of Bladen, for reading out parts of the new manifesto of the Ministry of Justice. I endorse wholeheartedly everything that he and the noble Lord, Lord Kingsland, said about the importance of access to justice. I am concerned that in putting forward these propositions we must be mindful of dealing with new alternative business structures in a measured way. I am not, as noble Lords fear, seeking to do anything that takes away from our citizens the right of access to justice.

The noble Lord, Lord Neill of Bladen, referred to what the noble and learned Lord, Lord Woolf, said. It is very important to make sure that local high-quality advice, perhaps from individual practitioners, is preserved. Noble Lords spoke at other stages of our consideration of this legislation about the need to make sure that the breadth of available advice and support was there. The noble Lord, Lord Thomas of Gresford, once again took us to his area of Wales, where his very real concern is that the rural population should not lose out in any way, shape or form.

Therefore, there is nothing between us on this. I could not agree more. The question is how to achieve it. My difficulty—the noble Lord, Lord Kingsland, will not be surprised at this—is the danger of ranking different regulatory objectives, thereby changing the nature of what we set out from the beginning in our discussions on Clause 1; that is, making sure that the regulatory objectives are properly weighed up, properly dealt with and properly accommodated in any process.

I have made it as clear as I possibly can that it would not fulfil the regulatory objectives if what we saw happen was a removal of good-quality advice services to local people. However, I said that it was important to make sure that in weighing up the objectives we look for high quality. I do not think that this is about low costs; it is about right costs and providing high-quality services that are more easily accessible to people in a modern age. As noble Lords are aware, that may mean providing services in different ways.

There is nothing between us, but I cannot accept the amendment because, from our perspective, it does nothing other than rank the regulatory objectives in a way that does not work for us. I shall not go through them again because I have spoken about them at many other stages of your Lordships’ deliberations. We believe that we have the right safeguards in place to ensure that we do not achieve what noble Lords are fearful of. The evil that the noble Lord, Lord Elystan-Morgan, referred to is not what we are seeking to achieve.

With alternative business structures, we are trying to provide opportunities for the legal profession and those who use its services to develop services in new, interesting and exciting ways, not to take away services from our citizens. It would be against everything that I believe in as a member of the new Labour Government if we wanted to do anything other than to provide the highest-quality services. That is very important to us.

With Amendment No. 13, the noble Lord, Lord Neill of Bladen, is trying to do something very important. It would require us to get as much information as possible about alternative business structures before setting off down this path. The trouble is that, unless we do so, we cannot get the information. It is rather a Catch-22 proposition within the noble Lord’s amendment.

I agree wholeheartedly that we need to be cautious and to do this in a measured way. Indeed, everything that we have suggested about the way we are setting it out, the safeguards, the way we would wish to license the professions and so on is designed to do precisely that. Sir David Clementi and the Joint Committee so ably chaired by the noble Lord, Lord Hunt of Wirral, all made these valid points about what we are seeking to do.

We have spoken about examples in Australia. The German example is very interesting and I am very grateful to the noble Lord. I was handed earlier a copy of the German Bill for the noble Lord. The trouble is that it is in German and I am not sure how useful it will be to either the noble Lord or me. The noble Lord’s explanation of what is in the legislation is right. He will know about one of the interesting aspects of what is happening in Germany. In its latest report, the Monopolies Commission, which is a separate, independent advisory board set up under German competition law, dedicated a chapter to the regulation of the professional services in general. It considered four professions, of which legal services was one, and recommended wide-scale reform. It also proposed that non-lawyers be allowed to invest by becoming shareholders in law firms. I am not saying that that suggestion has been accepted by the German Government, but I understand that it will go to the Ministry of Economics, which will respond to it in whatever way it wishes. What is happening in Germany is an interesting development. There is an increasing look across legal services in different countries to see how best to provide them to give high-quality services and to protect the profession.

We agreed on Report that it was important to monitor carefully what happened with alternative business structures and agreed an amendment based on what the noble Lord, Lord Kingsland, recommended, both in Committee and in discussions with me outside the Committee, might be an appropriate thing to do. We agree that it is important to monitor carefully and to come back to Parliament with the result of that monitoring to demonstrate how well it is working.

But we have all the information that there is to be had. As I have indicated, we have spoken with colleagues in other countries; we are watching what the Monopolies Commission is saying and the legislation in Germany; I have referred to Neelie Kroes, the Competition Commissioner for the European Union, who is also very interested in what we are doing on legal services; and, as noble Lords know, I have spoken in Brussels about what we are seeking to do. There is a huge amount of interest.

The noble Lord, Lord Elystan-Morgan, commented that we are doing this first. I agree. This is because that is what we do; we look at what needs to be developed and, following the great tradition of the way in which Britain has always operated, we think forward about what kind of services we provide. We may be in the lead now, but that is because other countries are beginning to contemplate and consider how best to do this.

I take extremely seriously the notes of caution sounded in your Lordships’ House. It is very important that we act in a measured way and do not destroy what is so important about the legal professions: competence, professionalism, independence, local service provision—many individuals provide high-quality services in their locality—and how the City legal firms and the Bar operate. It is not about destroying that; it is about providing new opportunities that will benefit the legal professions and consumers. As I said, we will do that in a measured way.

I must reject the amendment tabled by the noble Lord, Lord Neill of Bladen, because we cannot provide more information, so we simply would not do anything, which is not what I wish to see happen. However, we will ensure that implementation is done in a measured way that enables both Houses of Parliament to see how well it is going. On that basis, I hope that the noble Lord, Lord Kingsland, will withdraw his amendment.

4.15 pm

Lord Kingsland: My Lords, I am most grateful to the noble Baroness. She rejected our amendment on the basis that it would rank the objectives in Clause 1. In my submission, that is not so. All the amendment requires the licensor to do is make a proper investigation of the access to justice implications. Once that investigation is complete, it is then appropriate for the licensor to measure whatever conclusions he has preliminarily reached against all eight objectives, including access to justice, not giving special weight to any one. The obligation in our amendment is to investigate, not to distort the weighting system.

Even if I am wrong about that, there are, as I said in my opening remarks, many examples of legislation and government guidance where weights are recorded by public authorities. There is no general principle, like equality under the law, that each ingredient fed into a final policy decision should have equal weight. On the contrary, the rule for Governments is discretion. For both those reasons, I am sad to have to tell the noble Baroness that I do not accept the Government’s position.

The noble Baroness talked about Part 5 leading the way in the international community; but it is clear that, in so far as Germany is part of the international community, the Government’s approach has not resonated there. That comes out very clearly from Dr Dombek’s reply to the noble Lord, Lord Neill of Bladen. The German Parliament rejected the equivalent of Part 5 in Germany because, as Dr Dombek said, it regarded it as,

We have not taken that position in our debate here; but I heard with great interest the contribution of the noble Lord, Lord Elystan-Morgan, who, if he did not say so in terms, certainly implied that that would be one of the dangers of implementing Part 5 immediately, without looking at it very carefully beforehand.

The noble Baroness is well aware that I do not accept the reasons why the Government oppose my amendment; therefore, I wish to test the opinion of the House.

4.18 pm

On Question, Whether the said amendment (No. 3) shall be agreed to?

Their Lordships divided: Contents, 213; Not-Contents, 145.

Division No. 1


Addington, L.
Alton of Liverpool, L.
Ampthill, L.
Anelay of St Johns, B.
Arran, E.
Ashdown of Norton-sub-Hamdon, L.
Astor, V.
Astor of Hever, L.
Attlee, E.
Avebury, L.
Baker of Dorking, L.
Barker, B.
Beaumont of Whitley, L.
Best, L.
Blaker, L.
Bowness, L.
Bridgeman, V.
Bridges, L.
Brooke of Sutton Mandeville, L.
Brougham and Vaux, L.
Burnett, L.
Byford, B.
Caithness, E.
Campbell of Alloway, L.
Carlile of Berriew, L.
Cathcart, E.
Chadlington, L.
Chidgey, L.
Clement-Jones, L.
Colville of Culross, V.
Colwyn, L.
Cope of Berkeley, L.
Cotter, L.
Craig of Radley, L.
Craigavon, V.
Crathorne, L.
Crickhowell, L.
Cumberlege, B.
Darcy de Knayth, B.
De Mauley, L.
Dean of Harptree, L.
Denham, L.
Dholakia, L.
Dixon-Smith, L.
Dundee, E.
Dykes, L.
Eccles, V.
Eccles of Moulton, B.
Elles, B.
Elliott of Morpeth, L.
Elton, L.
Elystan-Morgan, L.
Falkland, V.
Falkner of Margravine, B.
Fearn, L.
Feldman, L.
Ferrers, E.
Fookes, B.
Forsyth of Drumlean, L.
Fowler, L.
Fraser of Carmyllie, L.
Garden, L.
Gardner of Parkes, B.
Geddes, L.
Gilmour of Craigmillar, L.
Glenarthur, L.
Glentoran, L.
Goodhart, L.
Goodlad, L.
Goschen, V.
Hamilton of Epsom, L.
Hamwee, B.
Hanham, B.
Hannay of Chiswick, L.
Hanningfield, L.
Harries of Pentregarth, L.
Harris of Richmond, B.
Hayhoe, L.
Henley, L.
Higgins, L.
Hooper, B.
Howard of Rising, L.
Howe, E.
Howe of Aberavon, L.
Howe of Idlicote, B.
Howell of Guildford, L.
Hunt of Wirral, L.
Hurd of Westwell, L.
Hylton, L.
Inglewood, L.
James of Blackheath, L.
Jopling, L.
Kimball, L.
King of Bridgwater, L.
Kingsland, L.
Kirkham, L.
Kirkwood of Kirkhope, L.
Knight of Collingtree, B.
Laing of Dunphail, L.
Laming, L.
Lamont of Lerwick, L.
Lane of Horsell, L.
Lee of Trafford, L.
Lester of Herne Hill, L.
Linklater of Butterstone, B.
Liverpool, E.
Livsey of Talgarth, L.
Lloyd of Berwick, L.
Luce, L.
Luke, L.
Lyell of Markyate, L.
McColl of Dulwich, L.
MacGregor of Pulham Market, L.
Mackay of Clashfern, L.
Mackie of Benshie, L.
Maclennan of Rogart, L.
McNally, L.
Maddock, B.
Maginnis of Drumglass, L.
Mar and Kellie, E.
Marland, L.
Marlesford, L.
Masham of Ilton, B.
Mayhew of Twysden, L.
Miller of Chilthorne Domer, B.
Miller of Hendon, B.
Molyneaux of Killead, L.
Monson, L.
Montrose, D.
Moore of Lower Marsh, L.
Morris of Bolton, B.
Murton of Lindisfarne, L.
Neill of Bladen, L.
Neuberger, B.
Newby, L.
Nicholson of Winterbourne, B.
Noakes, B.
Northbrook, L.
Northesk, E.
Northover, B.
Norton of Louth, L.
O'Cathain, B.
Onslow, E.
Oppenheim-Barnes, B.
Park of Monmouth, B.
Patel of Bradford, L.
Patten, L.
Pearson of Rannoch, L.
Pilkington of Oxenford, L.
Plumb, L.
Quinton, L.
Ramsbotham, L.
Reay, L.
Redesdale, L.
Rees, L.
Rennard, L.
Roberts of Conwy, L.
Roberts of Llandudno, L.
Rodgers of Quarry Bank, L.
Rotherwick, L.
Ryder of Wensum, L.
Saatchi, L.
St John of Fawsley, L.
Sandberg, L.
Sandwich, E.
Seccombe, B. [Teller]
Selsdon, L.
Sharp of Guildford, B.
Sharples, B.
Shaw of Northstead, L.
Sheikh, L.
Shephard of Northwold, B.
Shutt of Greetland, L. [Teller]
Skelmersdale, L.
Smith of Clifton, L.
Soulsby of Swaffham Prior, L.
Steel of Aikwood, L.
Steinberg, L.
Stern, B.
Stewartby, L.
Stoddart of Swindon, L.
Strathclyde, L.
Swinfen, L.
Tanlaw, L.
Taverne, L.
Taylor of Holbeach, L.
Taylor of Warwick, L.
Teverson, L.
Thomas of Gresford, L.
Thomas of Winchester, B.
Tonge, B.
Tope, L.
Tordoff, L.
Trenchard, V.
Trimble, L.
Tugendhat, L.
Tyler, L.
Ullswater, V.
Verma, B.
Waddington, L.
Wade of Chorlton, L.
Wakeham, L.
Waldegrave of North Hill, L.
Wallace of Saltaire, L.
Walmsley, B.
Walpole, L.
Walton of Detchant, L.
Warnock, B.
Watson of Richmond, L.
Wilcox, B.
Williams of Crosby, B.
Wilson of Tillyorn, L.
Wolfson, L.


Adams of Craigielea, B.
Adonis, L.
Ahmed, L.
Amos, B. [Lord President.]
Andrews, B.
Archer of Sandwell, L.
Ashton of Upholland, B.
Barnett, L.
Bassam of Brighton, L.
Bernstein of Craigweil, L.
Bhattacharyya, L.
Bilston, L.
Blood, B.
Boothroyd, B.
Borrie, L.
Boston of Faversham, L.
Boyd of Duncansby, L.
Bradley, L.
Bragg, L.
Brooke of Alverthorpe, L.
Brookman, L.
Carter of Coles, L.
Christopher, L.
Clark of Windermere, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Cobbold, L.
Cohen of Pimlico, B.
Corbett of Castle Vale, L.
Crawley, B.
David, B.
Davidson of Glen Clova, L.
Davies of Coity, L.
Davies of Oldham, L. [Teller]
Desai, L.
Dubs, L.
Eatwell, L.
Elder, L.
Evans of Parkside, L.
Evans of Temple Guiting, L.
Falconer of Thoroton, L. [Lord Chancellor.]
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Filkin, L.
Ford, B.
Foster of Bishop Auckland, L.
Foulkes of Cumnock, L.
Fyfe of Fairfield, L.
Gale, B.
Gibson of Market Rasen, B.
Giddens, L.
Golding, B.
Goldsmith, L.
Gordon of Strathblane, L.
Goudie, B.
Gould of Brookwood, L.
Gould of Potternewton, B.
Graham of Edmonton, L.
Greengross, B.
Gregson, L.
Grocott, L. [Teller]
Harris of Haringey, L.
Harrison, L.
Hart of Chilton, L.
Haskel, L.
Haworth, L.
Hilton of Eggardon, B.
Hollis of Heigham, B.
Howarth of Breckland, B.
Howarth of Newport, L.
Howells of St. Davids, B.
Howie of Troon, L.
Hoyle, L.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Irvine of Lairg, L.
Janner of Braunstone, L.
Jay of Paddington, B.
Jones, L.
Jones of Whitchurch, B.
Judd, L.
King of West Bromwich, L.
Kirkhill, L.
Layard, L.
Lea of Crondall, L.
Lipsey, L.
Lockwood, B.
Lofthouse of Pontefract, L.
McDonagh, B.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
Mason of Barnsley, L.
Maxton, L.
Mitchell, L.
Moonie, L.
Morgan of Drefelin, B.
Morgan of Huyton, B.
Morris of Aberavon, L.
Morris of Handsworth, L.
Morris of Manchester, L.
Morris of Yardley, B.
Murphy, B.
O'Neill of Clackmannan, L.
Patel of Blackburn, L.
Paul, L.
Pendry, L.
Pitkeathley, B.
Prosser, B.
Prys-Davies, L.
Puttnam, L.
Quin, B.
Ramsay of Cartvale, B.
Randall of St. Budeaux, L.
Rea, L.
Rendell of Babergh, B.
Richard, L.
Rogan, L.
Rooker, L.
Rosser, L.
Rowlands, L.
Royall of Blaisdon, B.
Sawyer, L.
Scotland of Asthal, B.
Sheldon, L.
Simon, V.
Smith of Leigh, L.
Soley, L.
Stone of Blackheath, L.
Strabolgi, L.
Taylor of Blackburn, L.
Taylor of Bolton, B.
Temple-Morris, L.
Thornton, B.
Triesman, L.
Tunnicliffe, L.
Turnberg, L.
Turner of Camden, B.
Uddin, B.
Warner, L.
Watson of Invergowrie, L.
Whitty, L.
Williams of Elvel, L.
Woolmer of Leeds, L.
Young of Norwood Green, L.

Resolved in the affirmative, and amendment agreed to accordingly.

4.34 pm

Clause 106 [Power to modify application of licensing rules etc to special bodies]:

Baroness Ashton of Upholland moved Amendments Nos. 4 to 11:

“( ) section 83(5)(a) to (f);”(a) a Head of Legal Practice approved by the licensing authority, or (b) a Head of Finance and Administration approved by the licensing authority,they must also provide for a review by the licensing authority of any decision by it to refuse or withdraw that approval.”

On Question, amendments agreed to.

Clause 207 [Parliamentary control of orders and regulations]:

Baroness Ashton of Upholland moved Amendment No. 12:

On Question, amendment agreed to.

Clause 212 [Commencement]:

Lord Neill of Bladen moved Amendment No. 13:

(a) consideration by both Houses of Parliament of a comprehensive report to be commissioned by the Lord Chancellor from an independent source analyzing—(i) the advantages or disadvantages (or both) which may be realistically expected to flow from the implementation of Part 5, including the benefits or risks (or both) to consumers;(ii) the potential enhancement or curtailment (or both) of access to justice; and(iii) the threats actual or internationally perceived to the independence of lawyers practising in England and Wales; and(b) the laying of the draft of a statutory instrument designed to bring into force the whole or part of Part 5 and the related Schedules before each House of Parliament and approval thereof by resolution of each House.

On Question, amendment agreed to.

Schedule 1 [The Legal Services Board]:

Lord Kingsland moved Amendment No. 14:

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