Legal Services Bill [HL]

I apologise to my noble friend Lord Brennan for not seeing him seeking to speak; I did not know he was behind me. It is a delight to see my noble friend Lord Whitty. I say that because, as noble Lords will be aware, there are a lot of lawyers in the Committee, and there have been two or three references to the lay chair and lay members. I wanted specifically to note the presence of my noble friend because it is a good reminder to us of the strength of feeling of consumer organisations and individuals over this legislation. Whether noble Lords agree with what my noble friend said or not, it is right and proper that we should hear those voices. In discussing this legislation outside your Lordships’ House, I have heard these voices on several occasions. They have been far more concerned than anything that my noble friend has said might suggest. I hope that I can allay some of the concerns raised. I do not dispute the need for the Legal Services Board to think about the regulatory objectives as a whole when it carries out its regulatory functions and considers exercising its powers. Indeed, the Government have consistently set out the policy that the board should be able to judge the relative importance of each regulatory objective. This would allow the board to balance the impact that actions or omissions may have on the objectives and to consider the overall effect. That is consistent with the approach taken by Sir David Clementi in his review of the regulatory framework in England and Wales. However, it is important that the board is not restricted in acting where only one of the regulatory objectives has been adversely impacted, if it is appropriate for it to do so. To put it another way, the Legal Services Board will have to consider to what extent there has been an impact on each one of the regulatory objectives and then take its final decision on whether to take regulatory action in the round. In such a case, it must be free to act where, after careful consideration, it judges that there has been an impact on only one of the regulatory objectives but that that impact is sufficient to warrant the taking of some form of regulatory action. I am therefore concerned that the amendments would prevent the board from being able to take appropriate action where there has been a detrimental effect on only one of the regulatory objectives. An example might be where a regulator has not put in place arrangements to increase public understanding of citizens’ legal rights and duties, even where the board has sought to achieve that through dialogue. It would be appropriate for the Legal Services Board to act if dialogue had failed to resolve the issue. Currently, the board can exercise a power if there has been an adverse effect on one or more regulatory objectives, provided that a number of safeguards have been satisfied. Those safeguards include the requirement for the board to be satisfied that, in all the circumstances of the case, it is appropriate to take that course of action, and a right of approved regulators to make representations. It is worth repeating that, under Clause 3, the board must have regard to the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases where action is necessary. Those are important safeguards, and I hope that noble Lords will reflect on them. So there is, of course, the principle of looking in the round, but that is not to say that there will never be circumstances where the impact of failure to deal with one regulatory objective is such that the Legal Services Board should take action. That is the right way to pursue this, and I hope that the noble Lord will feel able to withdraw his amendment.