Legal Services Bill [HL]

My Lords, as I said it I knew that someone was about to leap up and correct me, because the noble and learned Lord is entirely right. I apologise to the Lord Chief Justice for giving him an additional burden to the one that he already carries. I was trying to make the point that we quicklyget into the realms of making lists about which organisations should be consulted in particular circumstances. I am always deeply reluctant to do that. It is appropriate that my noble and learned friend consult where he feels appropriate, no doubt with good advice. That may or may not include a variety of people. We should hesitate to put that into the Bill. My noble friend Lord Brennan and others raised international concerns that have come forward. I know from discussions over the past couple of days that issues are being raised, particularly in Germany and possibly in France. It is important to think about the role of our legal professions internationally; I raise the matter partly because I have just come back from the Justice and Home Affairs Council in Brussels, where I spent some time talking with the Competition Commissioner, Neelie Kroes, who is a huge fan of what we have done in Britain and is keen to see how the Bill is implemented. I hope that she will visit us and talk to us about that. Also last night, I entertained a delegation of parliamentarians from South Africa including the Deputy Justice Minister, who expressed in clear terms their delight to see increasingly how the UK operates in such circumstances. International concerns are important, but I wanted to temper the concerns raised. People are worried out there—some feel passionately about what we are doing—but we will be mindful of the concerns raised. The noble Lords, Lord Hunt of Wirral and Lord Borrie, raised issues about the powers of direction and whether the chair should be a lay person. It is a requirement that the majority of board members be lay; there is no reason why eminent lawyers should not be appointed on merit to the board as well. We have set out in paragraph 3 of Schedule 1 the experience that the board must have for us to make sure that it is representative, in the best sense of the word. It must have a broad range of experience that allows it to carry out its functions effectively, including the power to direct. As a lay person, I have no difficulty with the chair being a lay person. From my perspective, it feels that too often you have to have a legal qualification to do things, so at last there is a job that I can go for when I finish being a Minister.It is an important issue of confidence as well, concerning the messages that we send out. We will be fortunate when we find the right person to take on that role. The noble Baroness, Lady Butler-Sloss, and the noble Lord, Lord Kingsland, raised the question of whether we ought to have a threshold condition in terms of the adverse impact on the objectives. She used ““substantial””; others have talked to me about using ““significant””. As noble Lords who have dealt with legislation before know, the trouble is that there are issues about the definition of ““substantial”” or ““significant””, in terms of being clear what we are trying to do. ““Substantial”” would also be difficult because it might mean that the board could not take action where it was required. If you have a regulator regulating a small number of people, the impact may not be substantial even where they are not meeting the regulatory standards. So by requiring theboard to act in accordance with the principles of proportionality and accountability, we will get to the same point that noble Lords seek. No doubt we will discuss that in Committee. The noble Lord, Lord Thomas of Gresford, asked about government solicitors. We do not think that we need to consider them within these provisions; they can still be disciplined if necessary. The cost of including them would be £800,000, which would have to come out of general taxation. We do not think that that is appropriate, but we do think that we have the right framework for them. My noble friend Lord Whitty and other noble Lords were concerned whether the compensation levels for the OLC were too low. Ultimately, that can be varied by order. We think, recognising the current situation, that we have the balance right, but I know that my noble friend and consumer groups have raised the issue with us. I am sure that we will debate it during the Bill’s passage. I say to my noble friend Lord Brennan that it is not just a re-badged consumer complaints service. It will be located in the West Midlands, but it will be outside Leamington Spa, as I understand it. It will take advantage of a good existing skills base but will be very different—which I think is what my noble friend was looking for . We had some work on costs done by PricewaterhouseCoopers and the assumptions in the report were its, not ours. We are broadly content with the projections but will of course continue to work with stakeholders to refine them as we implement the new arrangements. As noble Lords will know, PwC believes that there is a saving to be had within the projected costs for the new body. I am grateful for the work that my noble friend Lord Bach did on the committee and for his support of the Bill. He was concerned about the contribution which the Government might make particularly in starting up the new body. We believe that the cost should be covered by those who are being regulated. One could do a cost-benefit analysis about what might happen to those organisations when the provisions come into force. They will have increased confidence and it is very possible that the new system could reduce vexatious complaints—which I will return to in a moment. We recognise the importance of having the flexibility to differentiate, and the Bill has the capacity to do precisely that—to waive fees in certain circumstances and to differentiate the fees in others. We hope that that power will enable those issues to be dealt with appropriately. Perhaps I may interject on a point here for the benefit of the right reverend Prelate the Bishop of Chelmsford lest he should think that I had forgotten him. He mentioned the year 1533—which I think that that proves that we do not rush into change. But we agree entirely with his reading of the situation. I am grateful that he described the situation so succinctly, as it saves me having to repeat anything, and for his support for the Bill. I shall begin with the role of the Bar on complaints and the questions raised by noble Lords on delegation. It is right that the number of complaints against the Bar is 560, compared with 18,299 for solicitors, which is perhaps largely explained in terms of numbers. A third of the complaints against the Bar were forwarded to the Legal Services Ombudsman compared with 10 per cent of complaints against solicitors being forwarded to the Law Society. So, factually, without putting any spin on this, one-third of complainants were not happy with the way that the Bar dealt with their complaints. That issue is worthy of consideration. However, the issue on which I wish to focus is the importance of consistency and clarity for the public. Providing for different levels of service and different assumptions would send completely the wrong signal. We should regulate very clearly and very precisely, and that is not a reflection on the Bar. In Schedule 15 we allow expertise to be brought in, which would include the expertise of the Bar. There is no desire to do anything other than that, but it is important to make the system clear, straightforward and consistent. A number of noble Lords including the noble and learned Lord, Lord Lyell, my noble friend Lord Brennan, the noble Lord, Lord Kingsland, and the noble Baroness, Lady Butler-Sloss, were concerned that if we do not delegate complaints, we might end up with unnecessary delays and concerns about what kind of complaint would be dealt with. When an ombudsman receives a complaint that he considers to contain service and conduct issues, he will send a copy of the complaint to the relevant professional body. So such complaints can be considered in parallel and there should not be a delay for consumers. I would argue that that is a much better outcome than having to wait until a finding of misconduct is made before any redress can be considered. The noble Baroness also suggested that different conclusions might be arrived at. It is technically possible that someone not in breach of what was required by a regulator might be considered to have provided a bad service. In a sense, so be it. That will be for them to define very clearly.