Legal Services Bill [HL]

I am grateful to noble Lords for raising these issues. It might seem obvious to the noble Lord, Lord Kingsland, that there should be a requirement that the jurisdiction of the Office for Legal Complaints be limited to complaints about legal activities. In general, I accept and expect that complaints will relate to acts and omissions in carrying out legal activities, but I want to resist putting this in the Bill, and I shall explain why. It is a requirement that a respondent to a complaint must be someone capable of being complained about under the scheme. That means that at the time the act or omission to which the complaint relates occurred they must have been an authorised person in relation to an activity which is a reserved legal activity. It does not matter under the Bill whether the act or omission in question relates to a reserved legal activity—advocacy, litigation, licensed conveyancing, and so on—or some other legal activity or service that the respondent was providing. That is partly because we have taken the view that what matters is that the person is authorised; therefore, as their client, the complainant should be capable of complaining about any aspect of the service provided. It is also because in the world of alternative business structures, firms will be providing packages of services, and a complaint may therefore wholly or partly relate to other non-legal services. We do not want those complaints to be excluded simply because the activity was not wholly or partly a legal activity or service. In those circumstances, an ombudsman will need to make a judgment on whether the complaint is best dealt with under the OLC scheme or another scheme. Where a complaint is purely about financial advice, for example, the ombudsman may decide, with the consent of the complainant, that it would be more appropriate to pass it on to the Financial Ombudsman Service under the scheme rules in Clause 130(3)(b). But where the complaint contains aspects covered by different jurisdictions, the OLC might want to consider the complaint and provide redress in the round. It is better to leave the jurisdiction as open as possible, albeit with the safeguards that we have put in Clauses 123 to 125, so that the ombudsman can take into account all the factors. We would not want to see a genuine complaint excluded because the aspect being complained about was not quality of legal service, but simply quality of service; for example, the legal advice was fine but the lawyer was rude or condescending or whatever reasons might be given. I am also keen for consumers not to have to try to work out to whom they should complain. We want there to be a one-stop shop and for the ombudsman to determine where best that complaint should go. Although I understand the principle behind what the noble Lord is seeking to achieve, I expect the ombudsman to be looking primarily at legal complaints. I do not want to reach the point where the consumer is unable to raise complaints and have the ombudsman look at them in the round, work with others or pass them on as appropriate. The amendment of my noble friend Lord Whitty raises an interesting point about the voluntary basis that we could see the jurisdiction being extended to. I understand what my noble friend seeks to achieve. In fact, the Financial Ombudsman Service’s voluntary jurisdiction has worked very well in practice and has been a useful transitional arrangement for those who are not yet regulated by the Financial Services Authority, but who may be regulated in time. So I can see the merit in enabling such a voluntary jurisdiction to be established. However, at this stage it is important that the OLC deals with complaints against those providing reserved legal activities as set out in the Bill. As my noble friend knows well, there is real consumer concern in this area. I want the OLC to look at those issues first. That said, I see the potential benefit of allowing for a voluntary jurisdiction to be established, subject of course to the consultation and consent that would need to go alongside that. I will take this away with a view to bringing something back at the next stage of this Bill, with what I have said about the focus of the OLC but none the less recognising that this is important. Amendment No. 120A, moved by the noble Lord, Lord Kingsland, would extend the jurisdiction, but on a compulsory rather than voluntary basis. Aside from all the practical questions about the standards to which people who are not regulated would be held, how we would define ““legal advice and assistance”” and who would pay for this—because it would be a vast expansion of the ombudsman scheme’s jurisdiction—we think it runs contrary to the position set out by Clementi and our position set out in the White Paper. I accept that it leaves some consumers unprotected, but it is a question at this stage of how far we can cast the regulatory net. That decision is based on a risk-based approach to regulation, and the Legal Services Board, under the legislation, will be able to take decisions to expand or even to reduce the scope of regulation should it be clear that it is appropriate to do so. We have already discussed some areas that noble Lords are concerned about where, ultimately, the Legal Services Board might consider it wished to move into. There are also issues of educating consumers about different types of legal service providers; which are regulated and which therefore offer them greater protection. I have already said that there is a possibility that we could look at the voluntary jurisdiction scheme. If we were to provide for that and the OLC decided to set up such a scheme, we could bring currently unregulated activities or unregulated providers within that. There could be real benefits in that. But at the moment, we would rather be clear about where the regulatory net sits in terms of the compulsion and invite the LSB in looking at its future to determine where else it thinks the regulatory net should be cast. On that basis, I hope that the noble Lord will be able to withdraw his amendment.