Legal Services Bill [HL]

My Lords, we are extremely grateful to the noble Lord, Lord Neill of Bladen, for tabling the amendment. If Part 5 is to succeed, three things will be needed: rigorous procedures to ensure that those who own law firms are fit and proper persons, a guarantee that the same consumer protections will apply to externally owned law firms as well as to other law firms and the assurance that proper attention is given to the impact on access to justice before licensing decisions are taken. Two of those issues are dealt with satisfactorily by the Bill, which provides a comprehensive framework to ensure that external owners will be fit and proper persons. Furthermore, regulators of ABS firms will be able to ensure that the bodies that they license are subject to the same conduct of business rules and other consumer and public protection requirements as apply to existing law firms. However, the Bill does not ensure proper consideration of the impact on access to justice. It is highly likely that the impact of these new providers on access to justice will vary considerably in different parts of the country. In urban areas, it may well be that externally-owned law firms would simply provide desirable extra competition without any significant consumer detriment. The position may well be different in rural areas where the existing network of law firms is already thinly spread and under considerable economic pressure. In those areas, it is entirely possible that a new provider, concentrating on easily delivered routine legal services, might flourish, but only at the expense of making existing law firms unviable. That could be damaging in two separate ways. First, there is a significant risk that large new providers would not be readily accessible to disadvantaged consumers, particularly if they operated from out of town sites, as many supermarkets are. Secondly, many essential but less remunerative services may become unavailable. Existing law firms fold because the new providers are highly unlikely to offer the services concerned. Those services might include advice to parents whose children are involved in care proceedings, or help for the elderly having difficulties in relation to a care home; and they might simply become unavailable in large swathes throughout the country. Once services of that sort are lost, it will be exceedingly difficult to replace them. It is imperative therefore that the Government should analyse the likely impact of ABSs before implementing this part of the Bill. Research carried out, as the noble Lord, Lord Neill of Bladen, indicated, prior to implementation of the provisions cannot be definitive; it will simply be a prediction based on economic analysis. The fact that it may not be perfect is no reason to proceed without it. Research on these lines could be particularly useful in highlighting especial risks and in suggesting what safeguards could be introduced to mitigate them.