Legal Services Bill [HL]

I am most grateful to the noble Lord, who makes a good point; but the Bill does set out the circumstances in which an emergency can arise and how the Legal Services Board should act. The philosophy that lies behind the amendment, and many other amendments that the Opposition, other noble Lords and noble and learned Lords have tabled, is to make it clear that the task of the Legal Services Board is supervisory—that it should step in only if one or other of the approved regulators falters. All the amendment seeks to do is to ensure that in normal circumstances the approved regulators are the licensors and that the power of the Legal Services Board is narrowed so as to take that power onto its shoulders only when an approved regulator is clearly delinquent. The noble Lord’s point is still valid because the question of whether something is an emergency must, in the end, allow for a degree of discretion. It may well be, in the light of the noble Lord’s intervention, that I shall have to look again at that aspect of Part 5; but my point is to ensure that the Legal Services Board is not able to trespass into an area which is rightly that of the approved regulator. I am most grateful to the noble Lord for his intervention. The argument has been advanced that provisions of this sort would be necessary if the approved regulators were unwilling to become licensing authorities; but that is not a sustainable argument. Why should an approved regulator be unwilling to become a licensing authority or to license a particular form of alternative business structure unless it considers that such a licence could not safely be granted—bearing in mind that it would have to act in accordance with regulatory objectives? Given all of the approved regulator’s experience of regulating different sorts of law firm, if it feels that it cannot safely regulate a proposed form of alternative business structure, it would be foolish for it to be directed to do so. In the past, there may have been a concern that the professional bodies would decline to permit alternative business structure firms to operate—not on regulatory grounds, but out of a wish to protect their members from competition. However, that argument no longer applies, if, indeed, it ever did. The Law Society, for example, made it clear that, provided the necessary consumer protections are in place, it has no objection whatever to the provision of alternative business structures. I suggest that your Lordships also bear in mind that the Bill ensures that, in future, decision-making on regulatory issues will be independent of any representational role which an approved regulator may have. So there is no risk of approved regulators’ decisions about alternative business structures being taken on protectionist grounds. I beg to move.