Legal Services Bill [HL]

I am very grateful. I shall not stray into the territory of the next amendment, tempting though it is, because in one sense these issues fit together. However, as the noble Lord wishes to move the amendment separately, I will not do so. I understand the concerns behind the amendment, but the difficulties of organising a pilot scheme have been addressed extremely well by my noble friend Lord Borrie. The Joint Committee looked at this possibility, certainly in a geographical area, and found it unworkable. It is very hard to police boundaries because of how services are now provided. Noble Lords will know that telephone or internet services, for example, might apply only to consumers from one area, but it is difficult to prevent them going elsewhere for services and to ensure that services stay within the boundaries of an area. Conveyancing, litigation and other services can all have aspects that might not be restricted to defined physical areas. One might limit pilot providers to one area, but it is hard to prevent them offering services to consumers elsewhere. In summary, any approach that we think of puts serious constraints on the providers, the consumers or both. Freedom of choice for consumers is limited; providers' freedom over what service to offer and to whom would be limited. Anyone outside the pilot area would be denied the benefits of the alternative business structure. There would be possible anti-competitive results as well. The Office of Fair Trading pointed out that the, "““pilot scheme to test ABSs appears very difficult to implement in any meaningful way and would deliver questionable benefits””." Obviously, it would delay the implementation of the alternative business structure and the benefits that we hope that it will bring to providers and consumers. The Joint Committee concluded that those problems cannot be overcome and we agreed with that. The noble Lord, Lord Maclennan, was keen that we set out as much as we can about the timetable to which the Government are working, and I will endeavour to do so. I will write a note to the noble Lord and others who have spoken and place a copy in the Library. From Royal Assent onwards, the Law Society can start to regulate lawyer-controlled legal disciplinary practices (LDPs). Smaller regulatory bodies—for example the Council for Licensed Conveyancers, the Chartered Institute of Patent Agents and the Institute of Trade Mark Attorneys—already allow LDPs to operate but will be granted enhanced powers. Professional bodies intending to regulate alternative business structures can start to develop their licensing rules. Legal services providers and investors can investigate options for alternative business structure status and develop business plans for change. Certain existing ABS firms—for example, as we discussed earlier, some conveyancing and patent trade mark practices—can continue under transitional arrangements and adapt themselves to prepare for licensing. As the noble Lord, Lord Kingsland, rightly said, there is an issue to be resolved about the length of the transitional arrangements. Between February 2008 and November 2009, the LSB chair would be appointed, followed by the LSB board members and the interim chief executive. The LSB would work with approved regulators, helping them to prepare for designation as licensing authorities. In 2010-11, the LSB can process applications from regulators for designation as licensing authorities. As the Committee will know, professional bodies can become authorised to license ABS firms, but only where the rules are fit for purpose. From 2011 onwards, ABS licences can be granted in accordance with licensing rules and the statutory safeguards that we have set out. I hope that that gives a sense of the time frame to which we are working. Licensing for a fixed time for unusual ABSs could happen in theory. The Committee will be aware of the difficulties of that for investors, who would have to think about whether it was worth it. In practice, I do not know whether it would be an option. It would be for the licensing body to consider that. I hope that that gives a sense of why we could not accept—