Legal Services Bill [HL]

My amendment in this group accepts some of the arguments of the noble Lord, Lord Kingsland, and would go substantially further by putting the limit at £50,000. Earlier, we were subject to all sorts of cross-references to the financial services sector and its ombudsman. The limit there is £100,000, so I am being relatively modest on possible redress in relation to legal services. There are, of course, arguments about the nature of the firms that operate in this area, and their cost. The key issues are: what is the likely detriment to the consumer in this area that requires a redress on the one hand; and at what level do we have to pitch the maximum potential figure in order to effectively deter such behaviour by others? Of course, for any maximum, even the current maximum, it is unlikely that in many cases the ombudsman would actually award that figure—that would apply whether the noble Lord’s figure is accepted or my figure is accepted. However, we have to bear in mind the fact that, for a large proportion of complainants who complain about lawyers, the complaint relates to a property transaction. For those individuals, a property transaction is by far the biggest financial transaction that they make in their lives. A mistake or negligence on the part of a lawyer in buying or selling a family home, for example, could easily amount to a £50,000 loss to the individual. That is, after all, only about one-sixth of the average price of a house these days. I think, therefore, that £50,000 is not an unreasonable maximum. I hope that it would be very rare for that maximum to need to be awarded, but it is not an unreasonable figure. It would also be a significant deterrent to haphazard dealings in what are—let us face it—regarded in many solicitors’ offices as pretty mundane transactions for conveyancing and other property matters. In these cases, it is quite often a pretty mundane mistake of negligence, which has the effect of causing a significant cost to the client. So I think that the figure of £50,000 is justifiable. I certainly would support the second amendment of the noble Lord, Lord Kingsland, which would build into the Bill a review of whatever final figure we end up with, because such maxima can very rapidly become out of date.