Legal Services Bill [HL]

The Minister told us that the alternative business structures, as set out in the Bill, are to achieve the regulatory objectives set out in Clause 1(1)(a) to (g). At Second Reading, the noble and learned Lord the Lord Chancellor said: "““I move from regulation to alternative business structures. Part 5 provides a means of increasing competition and choice for the consumer””." Looking at the regulatory objectives, we see that that answers paragraphs (c) and (d). He went on: "““Companies and firms will now be permitted to have different types of lawyers and non-lawyers working together on an equal footing and will be able to do so with the benefit of external investment””.—[Official Report, 6/12/06; col. 1165.]" Those are the pros of Part 5. It does nothing to support the constitutional principle of the rule of law. As the noble and learned Lord, Lord Woolf, said in a pointed intervention, it does nothing to improve access to justice. It certainly does not encourage an independent, strong, diverse and effective legal profession but the reverse. As for increasing public understanding of citizens’ legal rights and duties, it does nothing. Promoting and maintaining adherence to the professional principles? Nothing. From what the noble and learned Lord the Lord Chancellor said about the regulatory objectives we can see that the balance is against the proposal. We considered at length how best to improve Part 5 as a whole and concluded that nothing would do so. Unless you accept the principle of alternative business structures as a good thing in itself—we do not—the only thing is to have a stand part debate for every clause in Part 5. That is the reason for the lengthy and complicated stand part group on today’s Marshalled List. One must then consider the other side. The Minister said at Second Reading that the Bill provided robust safeguards to protect the consumer—but from what? The answer is a diminution in the service that the legal profession now gives to the consumer. I am glad to see that the noble Lord, Lord Whitty, is back in his place because he will tell us why, in principle, he supports the Bill. How he can do that as the lone voice of the consumer, as I have previously said, when it is clearly contrary to the consumer interest to have the high street devoid of the legal firms that serve it at the moment, I do not know. How he can do that when the reverse of competition will create monopolies and when competition will not produce the lowering of fees that he, no doubt, looks for, I do not understand. It may be that the de Nederlandsche Bank will wish to co-operate in this country in legal practices—we have the Dutch connection that the Minister was telling us about—but how does that bank or any bank, insurance company, supermarket chain or motoring organisation know where it is best to provide legal services? This is a big issue, and the Minister has told us that she will think about it. What is the situation? When it is considering licensing, will the Legal Services Board look round the country and say, ““That’s quite a good place for an alternative business structure. We will invite people to apply for that area””, or will the alternative business structure come forward with an assessment of a place—shall we say in my part of Wales, north-east Wales—and present to the Government its assessment of the need for it to add a legal element or firm to its bank, insurance company or supermarket? What will happen? I have been involved in the small high street firm, and I know that high street firms will no longer be able to compete, so they will close down. When they do that, the fees of the large firms that come in will go up. It is classic competition. I remember that, in my early days as a solicitor, the banks used to offer a trustee service. They would then go to local solicitors and ask them to act on their behalf, which they did. The fees charged by the trustee services of the various banks were far in excess of what high street firms charged. As for usability, how many of us are able to talk to a bank manager in the bank? The Minister is indicating that she can, and she is very lucky. She will have to tell me his name—she will tell me the name of her bank in a minute. In most cases, the manager is somewhere in the country on the end of the phone and inquiries go in all directions. We miss and lack personal involvement with a local solicitor. It is sometimes said that such people have limited expertise, but they have direct access through the legal system of this country—not that of Europe, the Netherlands or wherever else—to the leading people in their field for whatever problem crops up. I mentioned at Second Reading that, as an articled clerk, I had instructed Lord Elwyn-Jones leading the noble Lord, Lord Hooson. I recall on another occasion—this was on the high street—instructing the noble and learned Lord, Lord Lloyd of Berwick, on a commercial case that happened to crop up. Such cases did not crop up very often but, when they did, we had access to the very best of advice. How is this alternative business structure capable of replacing a system like that by adding on to the banks, insurance companies, motoring organisations and commercial retail firms to which the noble Baroness referred an office for legal services? They are bound to cherry pick, and they are bound not to carry out the community services that we used to do for nothing. I do not believe that it is in the consumer interest for that to happen. It may perhaps be in the interests of the lawyer who wants to sell out and get some capital, but it is not in the consumer interest at all. You also have to consider the professional problems—clause after clause of the Bill seeks to address them—of confidentiality, of legal professional privilege and, specifically, of conflict of interest in a firm that has other interests that go well beyond the interests of the particular client. I said yesterday and I repeat it today: the Bill is fuelled by the Consumer Council, which sees the LSB as an extension of the Consumer Council. It should not be that way. It is dealing with professional organisations with a long history. It may be that the Law Society has fallen down in one aspect, that of dealing with complaints, in the past few years—it did not used to, but it has recently—but that is not a good enough reason, nor is it in the consumer interests, wholly to throw the legal profession of this country into disarray, to put people out of business and to introduce the alternative business structure that Part 5 provides for. A better service? I do not believe it. A cheaper service? I do not see it. The Committee will gather that I should declare an interest as a lawyer, but—this is the point that I make—I am at the end of my career. I heard some noble Lords say, ““No, no””, and I hope that more people will say that. I have no personal interest in this continuing, but I have a deep feeling for the needs of the legal profession and a deep understanding of how it has served the community of this country. There have been areas where it has fallen down but, compared with the way in which the legal profession of this country represents people, both in this community and in the international community, those setbacks are as nothing. So, without making a further Second Reading speech, I oppose Clause 70.