Legal Services Bill [HL]

My Lords, I am grateful to the noble Lord for raising this issue. He is right that we have had a detailed conversation with the ICAEW and shared with it our thinking about what we might seek to do and our decision in the end. In all the areas that I have looked at further, I have thought through the policy implications, discussed them with the appropriate people and, where necessary, brought together ideas to see what an amendment might look like. On that basis, we have tried to see whether we would add anything to the Bill or whether, without meaning to, we could create confusion or add burdens. Clause 53 places a duty on approved regulators to take account of other regulatory regimes. They are required not only to take steps to prevent regulatory conflict and avoid unnecessary duplication of regulatory requirements but also to provide for the resolution of regulatory conflicts. These duties apply to any approved regulator whose regulated practices include non-lawyer professionals, such as accountants or chartered surveyors. The Bill allows the board to play a role in resolving disputes between approved regulators and external regulatory bodies, provided that the board and the regulators consent and applicable statutory and other provisions allow it. Amendment No. 176A makes that more explicit, but it does not change the policy. The amendments do little to help prevent regulatory conflict; Clauses 51 to 54 already provide for that. However, they would place a further burden on approved regulators, who would have an obligation not only to address regulatory conflict with external regulators but also to consider formally and act upon any applications about specific instances. They would increase the pressure on approved regulators, who might be concerned about the possibility of a legal challenge because they had failed fully to address approaches from external regulators They would apply a potential further statutory burden on the board by requiring it to consider such additional references as may be generated as a result of these amendments. One of the key reasons that bodies enjoy the status of approved regulator is that they are judged responsible; that is, as bodies of experience and substance which the Government, in taking forward Sir David Clementi’s B+ model, have clearly entrusted with the day-to-day regulation of members of the legal profession. Noble Lords will know that that background is an important aspect of what the Government seek to do. They are responsible bodies, and we expect them to behave as such—they do. We expect that approved regulators would not only want to deal with any cases of regulatory conflict—I think that most, if not all, already maintain comprehensive rules on dealing with conflicts of interest—but they would actively want to avoid or resolve any such conflicts. We believe that the duties set out in the Bill are sufficient to encourage approved regulators and ensure that they take a proactive approach to dealing with external regulatory conflict. Having looked very carefully at what this amendment would do, I see no justification for change here. Within the framework that we have set up and with the rules that they will have, these responsible bodies are perfectly capable of resolving these issues. I hope the noble Lord will withdraw his amendment.