Legal Services Bill [HL]

My Lords, I declare the interest of having been a chairman of the Bar during the passage of the Access to Justice Bill and a practising barrister. However, I must reassure noble Lords that my years in your Lordships’ House have nurtured a complete sense of objectivity about my profession, which I hope to display in my remarks. Regulation is not an end in itself; it is a means by which the consumer or public interest can be balanced in protecting it through the way in which a profession or a financial system operates. There is no spiritual context to regulation; it is a mechanical system operated by people to help others. So, when we look at this Bill, which I welcome, we should test a new set of regulations about an important profession against the following criteria: are they necessary, proportionate and cost effective? Do they avoid doing irreparable damage to the profession and service which they seek to regulate? Is this Bill and the new regulation of the entire legal profession, necessary? I say yes, and I am gratified to note that the Bar Council has plainly stated that it supports this Bill. Such concerns that it has go to individual components of it, not in any way to its principle, and I agree. I do not agree that the regulation of a profession should be mixed with its representation. In this day and age they should be separate and be seen to operate separately. This Bill seeks to achieve that. I agree that the profession should be accountable to a Legal Services Board. I want to reassure the House that my profession, the Bar, recognised that some time ago. In January 2006, we created the Bar Standards Board, which was specifically designed to protect consumer interests and maintain professional standards. It is chaired by a lay person, who is a director of the National Consumer Council. The balance of lay members and professionals on it is entirely reasonable. Its purpose is to give the consumer confidence in the regulation of my profession. That has already happened; the arrangements have been successful. My side of the profession is already doing that which this Bill seeks to develop. The next and fundamental question about whythis Bill is necessary relates to alternative business structures. I very much regret the emphasis placed on the introduction of finance—in capital letters—to law practices by so many of my personal friends in the law. There is an entirely different aspect of alternative business structures, which has thus far been entirely neglected. We must accept that legal aid has reached its ceiling. The impact of that on the provision of legal services nationally is really serious. There is no reason, in my opinion, why alternative business structures cannot be developed to operate legal practices to favour the poor and the disadvantaged—for instance, through social enterprise systems joining in with law firms, and trade unions doing the same—to achieve a new means of ensuring access to justice. The Bill is therefore necessary, but is it proportionate? That will be tested in Committee by probing and by amendments, but I raise three points. The first concerns the independence of the new system. This is not an opinion put forward by the Bar to protect itself, or by solicitors to protect themselves, from government interference and so on. That would be a staggeringly superficial description of our concerns. We are concerned about powers and appointments because of the principle of independence. We are also concerned about it at a very practical level. A small group of lawyers—solicitors and barristers—generate for this country in invisible earnings sums approaching £1.5 billion a year. We are the best international lawyers in the world and people come to us and our courts because of our quality. That profit to this country could be put at risk if the images given by the Bill are of interference with the independence which leads to our getting so much work from abroad. Lawyers from other countries, if they can, will seek to use anything they find in our future debates and in the future context of the Bill to undermine our position in international markets. So it is an important question. My second point concerns the Office for Legal Complaints and its relationship to authorised regulators. If I may be allowed to state the obvious, a solicitor will administer your legal problem, which may or may not go to court; a barrister will advise you, sometimes when there is no question of going to court, but mostly when there is. The two functions are very different. The solicitor’s function raises, in its daily context, the provision of the kind of services which the consumer expects to be given at a proper standard, without which he or she will complain. A barrister’s function is to give advice—often unpalatable, often harsh and often difficult to accept—and if the case goes wrong, the way it was dealt with is never forgotten. This gives rise to a different kind of complaint—not ““He kept me waiting months for an opinion””, not ““He charged too much and did not tell me that he was going to””, but ““He did not look after me professionally””. The ordinary person makes no distinctionbetween the quality of service and the professional standard which is subject to discipline. What will the Office for Legal Complaints do if it deprives the Bar of dealing with the two kinds of complaints? In70 per cent of complaints to the Bar system, both types are inextricably mixed. Are we to protect, I say sardonically and intentionally, the consumer in relation to Bar complaints by having parallel proceedings for service and discipline? Is the consumer to be exposed to involvement in two processes when there could be one? If the processes are not to be parallel, which comes first? It is not a position that any reasonable consumer will expect to be put in. The OLC cannot deal with discipline effectively; the profession can. The Bar is simply seeking flexibility—flexibility that serves the consumer—not any special position. My last point concerns the alternative business structure. I invite my noble and learned friend the Lord Chancellor, during the conduct of the Bill,to make it abundantly clear that the regulatory objectives of Clause 1 apply to all alternative business structures with the same force as they do to ordinary legal practice, especially if we find that one of the clauses provides for foreign investment in an English legal practice. It is asking nothing save for an emphasis that the objectives apply across the board. On cost-effectiveness, Which? says that consumer complaint handling in the law is a number-one priority, and that consumers deserve quick, fair and accessible treatment. I have no doubt that the Department for Constitutional Affairs will be investigating seriously how the new system will work so as to be reasonably quick, always fair—in so far as one can be—and accessible, not drowning the consumer in a barrage of paper passing betweenthe consumer, the person complained against and the office, and seemingly never coming to an end. That is the risk and it has to be avoided. I cannot imagine that it is seriously contemplated that we can look forward to the assimilation of the failed Law Society system—same people, same arrangements—into a new system. I am sure that that will not happen. If it will cost £20 million a year to run the LSB and the OLC and more than £20 million to set up the OLC, we are talking about serious money; we expect serious value for the consumer. In Clauses 111 to 118, which create the Office for Legal Complaints, and Schedule 15, I looked for the ultimate sanction. What happens if the system is not working and there is no sanction? I hope that we would not have to look forward to an amendment to an Act of Parliament to change a failing system if it were irreparably failing. I also note that in the structure there is control by the Legal Services Board, but who is to answer for it if it fails? The people who run it and the Legal Services Board? The Secretary of State? If it goes wrong, who can the public look to? I hope that that will not arise; if it works successfully, we might want to find out who has got it right. My final point is about the impact on the profession that is being regulated. The phrase ““legal services provider”” is linguistically and intellectually inane. We are talking about professionals—lawyers, doctors. They should give the client the capacity to trust in the ability and service they provide as professionals. That is a fundamental part of our British way of life. Those of us who travel abroad in a legal capacity are always told, ““You must really treasure your legal system. Do you know how much we think of it, how much we value it, how much we would like to have it?”” Let us not, in discussing problems like this, forget the much greater importance to us of our legal profession, our system of law, than the essentially important consumer interest. I am sure that during the conduct of the Bill the Government will look to be astute to proper amendment, reasonably brought, to make this a better Bill.