Legal Services Bill [HL]

moved Amendment No. 383: 383: After Clause 139, insert the following new Clause— ““Handling of complaints by approved regulator (1) The Board may direct that complaints within the jurisdiction of the ombudsman scheme and of such description as are specified in the direction shall be determined by an approved regulator instead of an ombudsman. (2) The Board may by further direction vary or withdraw a direction given under subsection (1). (3) Before giving a direction under this section the Board must consult— (a) the OLC, (b) the approved regulator concerned, and (c) such other persons as the Board considers it reasonable to consult. (4) If the Board gives a direction under this section, it must— (a) give a copy to the OLC, the Lord Chancellor, the approved regulator concerned, and any person consulted under subsection (3)(c), and (b) publish the direction in the way it thinks fit. (5) A direction under this section may include— (a) transitional provision in relation to complaints already being dealt with under the ombudsman scheme or by an approved regulator, and (b) incidental, supplemental or consequential provision, including provision applying a provision of or made under this Part, with or without modifications, to the determination of a complaint by an approved regulator.”” The noble Lord said: My Lords, Amendments Nos. 383, 392 and 393 provide for the delegation of complaints handling to an approved regulator by a direction of the Legal Services Board. Where such a direction is given, the approved regulator would be empowered to award redress to the complainant, which Clause 154 currently prohibits. The Legal Services Board would have power subsequently to vary or withdraw a direction. In deciding whether to give, vary or withdraw a direction, the Legal Services Board would be bound by Clause 3 to act compatibly with the regulatory objectives and the other regulatory principles of the Bill. Part 6 establishes the OLC, the resolution body, for those who consider that their complaints have not satisfactorily been dealt with by the in-house arrangements of the relevant legal service provider. Under the Bill, the OLC will investigate service complaints itself but will refer complaints about misconduct to an approved regulator for resolution. However, approved regulators will no longer have the power to award redress to complainants. The Law Society, representing 116,000 solicitors, received more than 17,000 new complaints against it in 2004-05, accounting for about 86 per cent of the total costs of legal complaints handling. By contrast, the Bar Standards Board, the regulatory arm of the Bar Council—the governing body for 14,000 barristers—deals with less than 1,000 complaints each year. The Bar Standards Board estimates that about 3 per cent of cases referred to the OLC will derive from the Bar. As we saw in Committee, about 70 per cent of complaints against barristers involve allegations that, if true, would require both compensation for inadequate professional service and proceedings for misconduct. The approved regulator, where appropriate, should be in a position to deal with both aspects. It is both inconvenient and confusing for consumers to have to deal with two different bodies about different aspects of their complaints, especially if one body accepts the facts to which the complaint relates but the other does not. There is also likely to be duplication of work and therefore unnecessary expense. Moreover, the approved regulator has a range of powers, including powers to award redress, which are far wider than those proposed for the OLC. This enables it to ensure that the most appropriate remedy or sanction is provided through a single procedure. By contrast, the proposed new complaints-handling system will involve decision making by salaried non-lawyers who are unlikely to be able to supply the level of analysis and expertise currently provided free of charge. It is one of the, "““many advantages that have been provided by the Bar’s handling of complaints””.—[Official Report, 6/12/06; col. 1186.]" That should not be lost by the Bill, as the noble Lord, Lord Borrie, a former director of the Office of Fair Trading, warned us at Second Reading. As we saw in Committee, the Bar Council has established a body of expertise and maintained a complaints-handling service that is widely acknowledged to be of an extremely high standard. As we saw in Committee, the Legal Services Ombudsman has consistently given high marks to the Bar Standards Board for the speed and quality of its complaints service. Robert Behrens, the Bar Standards Board’s independent complaints commissioner, has said that there is a strong case for the Bar Standards Board to have delegated jurisdiction over complaints about poor service. Clause 154 creates inflexibility in complaints handling and adds massively to its costs. We have concluded that the Bill as drafted is certain to offer a poorer service to consumers at vastly greater cost—at least as far as the Bar is concerned. The Bar Standards Board, the approved regulator for the Bar, is an independent, ring-fenced, regulatory authority. It already deals with both service and conduct complaints. It already has a significant lay element, and its decisions are subject to a lay veto. This is emphatically not a case of lawyers deciding on complaints against lawyers. The independent Legal Services Ombudsman has repeatedly said that the Bar Standards Board does outstanding work. We had hoped that the experience and expertise that barristers and lay members bring to providing a professional, cost-effective approach to complaints handling would, in the interests of consumers, be recognised in the Bill. Instead, the Government are persisting with a scheme which will provide a sub-optimal service to consumers at a colossal cost to the service providers. The Government’s proposals for amending complaints handling, and in particular the new clause inserted after Clause 154 by Amendment No. 395 and the new clauses after Clause 159 by Amendments Nos. 403 to 405, involve a voluntary scheme as an add-on to the main statutory one. However, the amendments do not address the problems that we have identified in the legislation. Nor do they answer our objections to the complete exclusion of approved regulators, with all their expertise from the ombudsman process. I beg to move.