Legal Services Bill [HL]

I am grateful to the noble Lord. He seeks to give an additional back-up power of direction. Where a respondent has failed to take action under Clause 134(2)(d) or (e) the ombudsman has the power to engage another lawyer to take action. We expect—and I am sure that the noble Lord would agree—full compliance in the vast majority of cases in any event. That is certainly the experience of other ombudsman schemes. Failure to comply would be a disciplinary matter. We have provided enforcement powers so that determinations can be enforced by court order, if necessary, under Clause 138. If I leave that aside, of course it is possible to envisage a situation where the relationship between the lawyer and client has broken down to such an extent that if an ombudsman orders the respondent to redo some work, the respondent may not feel prepared to do it. That would be likely to result in enforcement action and therefore to come to the attention of the relevant approved regulator, so the respondent would have a strong incentive to avoid that. If I leave that likelihood to one side, an ombudsman would want to consider how to make a direction to avoid an outcome that could result in such action being necessary. I think that that is an important point as well. If it is clear that the relationship between the lawyer and client has broken down, the most sensible course of action might well be to award any compensation as appropriate and perhaps to direct that fees be refunded in respect of the work that had not been carried out properly. The complainant would then be in a position to engage another lawyer to do the work. In those sorts of cases that might be the most appropriate solution. In other circumstances where the error could be rectified by the lawyer who first did the work, and there is no evidence of a terribly difficult situation, an ombudsman might very well make a direction under Clause 134(2)(d). But the ombudsman could, in making that direction, also give the respondent a choice. That might be that the respondent either rectify the error or engage someone else to do the work, or secure the rectification of the error by paying the complainant to get another lawyer to do the work. The point I want to make by all that is that there is flexibility in the drafting of Clause 134(2)(d) and (e) to provide for the situation alluded to here. In short, ombudsmen are required to act in compliance with the regulatory objectives. That requires them to make determinations appropriate to the circumstances of the complaints, which they have the flexibility to do. To that extent, the amendment is unnecessary. The key to this is getting the direction right in the first place; and then, as a last resort, to enforce that direction. I am not keen on getting the OLC to engage new lawyers to do the work. That could be very cumbersome and I do not think that it is the right way to proceed. We want to ensure that in making a direction, the OLC is absolutely sure about the circumstances and makes a direction in a way that will provide the appropriate resolution—whether that is compensation; asking the lawyer to redo the work; or asking the lawyer to find an alternative route if that becomes impossible, rather than itself engaging another lawyer. I hope that the noble Lord is reassured that the flexibility is there to deal with the circumstances—to enforce where necessary, but to try to ensure that the direction does not lead to having to enforce. As I have said, that is what lots of other ombudsmen have found.