Legal Services Bill [HL]

My Lords, with the leave of your Lordships, I shall speak in place of my noble friend Lord Maclennan of Rogart, who will reply on behalf of the Liberal Democrats. First, I declare an interest: I am proud to be a lawyer. I started my career as a solicitor in a coal-mining and steel-making community, very similar to the sort of community that the noble Lord, Lord Lofthouse, was talking about when he addressed us on the tribunals Bill. It was a small firm in a small town and actually on the high street. It follows that I have considerable feelings on the importance of the high street solicitor. We covered the whole gamut of legal activity and had access to a highly specialised Bar. Even as an articled clerk I was privilegedto instruct Lord Elwyn-Jones, as he later became, leading the noble Lord, Lord Hooson. That was a fairly formidable team. One part of the job was working for nothing. In the side of the firm that I worked on, which was essentially advocacy and litigation, certainly when it came to tribunals, we worked for nothing—pro bono. There was a cross-subsidy from the more profitable work that my brother and other partners did in conveyancing, probate and so on which enabled us to carry out our service to a community that was not the most wealthy, as your Lordships can imagine, particularly at a time when coal mines were closing and steelworks were disappearing. I later joined the Bar, with, at that time, some difficulty in crossing over the professions. In case your Lordships should think that I am critical of the Government’s proposals at a later stage in my remarks, I should say that it is not because I approach the proposals from a conservative point of view, thinking that all was well in the past. I have always advocated a fused profession and a common qualification for lawyers, advocacy and the disciplines of the Bar being something that should be adopted at a later stage when the person knows the client face to face and has an understanding of the problems that solicitors face. Since I started, the language of the market has intruded into the legal profession. We used to talk of clients; now we talk of consumers and stakeholders. It was a profession; in the Bill, it is called a ““legal service provider””. Advertising was regarded as touting and ambulance chasing; now it is acceptable and promoted. Under the Bill, legal services are to be sold along with a tin of beans. It is interesting that when the Co-operative Society expressed an interest in setting up a legal division in May, Bridget Prentice, the Minister in charge of the Bill in another place, said in a press release that we should perhaps call the Bill ““Co-op Law””. It sums up the Bill’s ambition quite well. We have moved to a consumer-directed legal profession. The proposal is to put the ““consumer first””—a phrase in the title of the White Paper. I have always believed that the public interest comes first, but that is not at all the same thing. The Bill will be judged by its ability to maintain the essentials of the legal profession—its integrity and its independence. Contained in those essentials is the basic concept that the lawyer’s primary duty is to the administration of justice and to the court. That was starkly illustrated for me by a client, a barrister, who insisted on disclosing to Her Majesty’s coroner in another jurisdiction an adverse and critical internal report of an accident in which his client, a powerful utility company, was involved. His client sought through its in-house lawyers to withhold the report from the court and instructed him to put forward an edited and anodyne version. Following the basic principle of duty to the administration of justice, he refused. His health was wrecked and so was his career. The duty to the client as consumer is vitally important although it is secondary to that prime duty that I spoke of. The duty to the client includes client confidentiality, the avoidance of conflicts of interest, and, importantly, the ability and willingness to challenge the various organs of state in whatever guise they impact upon the rights of the citizen. It is interesting that in Clause 184 an automatic exemption from the scope of the regulatory regime is given to government lawyers and that the Government have rejected recommendation 29 of the Joint Committee’s report, to remove that exemption. I would like the Minister to tell us who we complain to about government lawyers if they do not come within the proposed regulatory regime. Perhaps I may say a word about independence. It was no surprise to me that the draft Bill put before us in July set out a list of objectives that did not include any reference to the public interest, the duty tothe court or the independence of the profession. However, following the comments of the Joint Committee so ably chaired by the noble Lord, Lord Hunt, they are included now as either objectives or principles. It may be right to replace the patchwork of supervisors—what the noble and learned Lord the Lord Chancellor described as the ““regulatory maze””—with a single, overarching Legal Services Board, as Sir David Clementi proposed in his report. But it must not be a creature of government. We will want to know why the noble and learned Lord the Lord Chancellor says that it is necessary for him to maintain the Government’s grip over appointments, not only initial appointments but the whole appointments system. That approach was rejected by Sir David Clementi but nevertheless appears in the Bill. It flies in the face of the Government’s policies elsewhere in the judicial system for an independent commission to appoint judges and so on. We have a proposal for the Secretary of State to take power to appoint members of the board personally, and that is matched by his power to remove them. The noble and learned Lord referred to the fact that nobody suggests that the Lord Chief Justice appointed by the Prime Minister is not independent. The Lord Chief Justice has the tenure of his office. He cannot be removed by any Minister. He can be removed only by the votes of Parliament. But here is a system where the Lord Chancellor appoints and the Lord Chancellor removes. In the Bill he also takes the power to amend at will the objectivesand powers of the Legal Services Board. Is that independence? I respectfully suggest to your Lordships that it is not. It is unclear to what degree the Legal Services Board will seek to interfere with or second guess the front-line regulators—the Law Society and the Bar Council being the prime front-line regulators. Is there to be a light touch or not? In response to the Joint Committee’s report, the Government said that, "““the intention of the LSB should be to work in partnership with the authorised regulators, leaving them with the responsibility for day to day regulation. The LSB should exercise its powers only where approved regulators are clearly failing””." A system which has regulations granting the Legal Services Board swingeing powers to give directions to the Bar Council or the Law Society to ““take specific regulatory action”” and to issue financial penalties may be quite disproportionate to the powers that should be granted to this overarching body. If the Legal Services Board is to consist of lay persons, how are they qualified to give detailed directions on technical regulatory issues? I move to the issue of complaints. It is an unfortunate fact, as the noble and learned Lord the Lord Chancellor and the noble and learned Lord, Lord Lyell, said, that the Law Society complaints procedure was a failure. I fully accept that the regulatory functions of the Bar Council and the Law Society should be separated from their representative functions. That, indeed, has already been done. However, looking at the body of complaints, I am not impressed by the percentages of those who complain that they have had a poor service. There are certainly unforgivable delays and incompetence, but that is not always the root cause of a complaint. In disputes between citizens and conflicts between the citizen and the state, there are winners and losers. The winners never complain but the losers may. Sometimes it is the fault of the lawyers for giving bad advice, but much more often—I do not have to say, in a lengthy experience on both sides of the coin, that I have not received a complaint myself; I just make the point—the advice given is based on inaccurate instructions from the client. The successful lawyer challenges and tests his instructions with the client, and in criminal cases he often has to plead with his clients, ““For goodness’ sake, tell me the truth””. Often this attitude of having to test what the client says triggers complaints, particularly when the client loses, of arrogance and hostility because the lawyer does not swallow without question everything that the client tells him. The less successful lawyers, on the other hand, are those who accept everything their client tells them without question and then lose. I accept that complaints of delay and incompetence should nevertheless be dealt with by an independent office of legal complaints. As I say, the Law Society consumer complaints service was not a success. It was therefore surprising to discover that the proposal for the new office is that it be in the same town as the current Law Society consumer complaints service. That suggests that what is happening is merely a re-badging of a failing service. It is also proposed that the service will encompass complaints against barristers. That may be very unsatisfactory for them. The noble and learnedLord suggested that all was not well with theBar complaints system, but the Legal Services Ombudsman has praised the performance of the Bar Council in its handling of complainants. Let us suppose that one-third of Bar Council complaints—which represent only 3 per cent of all the complaints that are made about lawyers—go to the ombudsman. In her report for 2005-06, the ombudsman said: "““I can report that I have seen an increase in the percentage of Bar Council investigations that I was satisfied with, up from 78.7% last year to 88% this year. I welcome this improved performance””." So, of the one-third of complaints that go on to the ombudsman, she is satisfied that 88 per cent of them have been properly handled. It is not surprising that, in the same report, she said: "““I find my interactions with the Bar Council to be constructive and professional, and I thank them for their openness and transparency in the dealings with my Office””." The problem that the Bill is designed to overcome has not been a problem with the complaints-handling of the Bar Council. The division that the Bill proposes between service and conduct complaints may be quite artificial. Often, certainly for barristers, a complaint of poor service includes a complaint of misconduct but, under the Bill, there will be one body considering the service side of the complaint while the Bar Council will consider the conduct side of the complaint. In trying to improve the Bill, we will seek the possibility of the OLC transferring mixed complaints of conduct and service to the Bar Council for its determination. That would give a certain amount of flexibility to the system to be introduced. I turn to ““alternative business structures””. The Bill allows lawyers and non-lawyers to form legal partnerships, as the noble and learned Lord the Lord Chancellor said. There is undoubtedly a case for a one-stop professional service so that accountants, insurance agents, estate agents or architects may make cost savings in marketing, administration and office expenses. There are certainly benefits for the professionals, but I query whether there are benefits for the consumer of having only one door to go through, but then being directed to various offices inside a single building. So there are benefits to professionals in cost savings—I have no doubt that that is why the Law Society has expressed such support for the idea—but I have considerable doubt that it is possible to ring-fence legal services within a multidisciplinary organisation so as to preserve that important principle to which I referred at the beginning of my remarks: client confidentiality. Do you, as the Bill seems to suggest, extend legal professional privilege to accountants, estate agents and insurance agents just because they are in partnership with lawyers, providing that they can be brought within the provision of some form of legal advice? Similarly, the scope for conflicts of interest—the second principle to which I referred—seems to me to be considerably widened and may cause serious problems. ““Alternative business structures”” also allows for outside investment in legal partnerships: for a large, multiple firm or organisation such as the AA, an insurance company, a bank, or a supermarket to get involved in providing legal services. Why? People who are afraid to step inside a solicitor's office on the high street are not likely to step with any greater celerity into a lawyer's office that is part of a bank, an insurance company or a supermarket. No one enjoys going to a lawyer. Let us face it: it is always because there is a problem. Even when you are making a will, you are contemplating your own mortality, which is not a very pleasant thing to do, especially if someone charges you money for the purpose. In the criminal law, some of us have clients who, even though acquitted, say, ““I hope I never see you again””. The experience of contact with a lawyer is not necessarily a happy one. If you bring in outside money, it will enable partners in a large legal firm to sell out to shareholders and realise the value of their stake in the business. The Government can expect support from that quarter. As for the client, the consumer, he will lose out. If there is national marketing by a large concern with special offers to kill off local competition, the high street firm—the sort of firm for which I work happily and, I hope, with some benefit to my community—cannot survive. The large organisations will concentrate on the profitable side of the business. You can forget about legal aid, access to justice and pro bono work. The Tescos and insurance companies of this nation are not interested in working for nothing. There are other problems. Lawyers, whether in chambers or a solicitor’s office, enjoy the support of their peers and the ability to discuss the problemsthat they face. The interest of a bank towards its shareholders may therefore conflict easily with the interest of the customer or consumer. I see there are signs of impatience among your Lordships; I have detained you too long. The Bill is a free-for-all. It enables investors through the market, without any legal training or qualification, to make a profit out of the provision of legal services. That is new Labour, but I oppose that. The case has not been made out.