Legal Services Bill [Lords]

I have looked into that because the one example that is constantly cited to me is the German example, but the BRAK in Germany is the representative body there, so it is looking at its own vested interests, rather than those of the consumer. As I have said, however, I am happy to look at ensuring that people feel confident that the system of public appointments made through Ministers is robust and will be seen to be independent. May I move on to part 2 and to the legal services board? The board will provide independent oversight of the regulatory bodies. Again, day-to-day regulation will, clearly, remain with the professions. I move on to reserved legal activities. Part 3 sets out those legal activities that will come under the regulatory control of the board, such as the provision of advocacy and litigation services. It also provides for the offences of offering or providing those services when not entitled to do so. The Bill also provides for alterations to be made to the list of those activities by affirmative order. That is an important change because, at present, additional activities cannot be brought under regulatory control without primary legislation. I will be tabling amendments to ensure that trade unions can continue to provide legal services to their members, although they will need to be licensed under part 5 if they want to provide services more widely or on a commercial basis. Part 4 sets out the arrangements under which the board will regulate ““approved regulators”” such as the Law Society and the Bar Council, and defines their regulatory and representative functions. That part also provides the board with its powers. Those include to set targets and to monitor the performance of approved regulators; to exercise a power of direction over approved regulators; to censure publicly an approved regulator; to fine approved regulators; to take over a function or functions of an approved regulator; and, ultimately, to remove the designation of an approved regulator. There are grades within those powers, and the board will determine which of them is appropriate at the relevant time. The powers ensure that the board can effectively and fully protect the consumer interest. There must be the widest possible mix of powers, and the greatest possible flexibility in deciding when to exercise them. That is why I intend to introduce amendments to reverse changes made in another place that limit the legal services board’s flexibility by adding the term ““significant”” to the adverse impact test that triggers the use of the powers and by adding a requirement that the impact must be on the regulatory objectives ““taken as a whole””, rather than on any single objective. As the National Consumer Council has said:"““The Board should not have to wait until a significant or serious event before taking action to protect consumer interests.””" Amendments made in another place also sought to make explicit in the Bill the ““oversight”” nature of the board. Although I have some sympathy with that, in its current form the relevant amendment does not properly reflect Government policy. I therefore intend to bring forward amendments to refine the change. Finally, this part of the Bill also provides the important power—to be exercised by affirmative order, and only following a recommendation from the board—for the Lord Chancellor to modify the functions of approved regulators in order that they might effectively discharge their regulatory responsibilities. Part 5 of the Bill provides a means of increasing competition and consumer choice. By becoming licensed bodies, firms will be permitted to have different types of lawyer and non-lawyer working together on an equal footing. They will also have access to external investment. The Bill provides a number of important safeguards, including requirements for there to be named heads of legal practice and of finance and administration, and a ““fit and proper”” test for external investors. I know that there are concerns about the impact these proposals might have on access to justice and I accept that that is a vital issue, but I believe that the Bill already protects—indeed, that it enhances—access to justice, particularly given changes that the Government introduced in the other place to require the board to carry out monitoring of the impact of alternative business structures and to report on that monitoring. However, it is also important to listen to consumers. Earlier this year, the National Consumer Federation said:"““The increased competition promised in the Bill should be a public benefit encouraging providers to be more responsive to consumer need, stimulating innovation and lowering prices.””" I therefore intend to introduce amendments to reverse the amendment made in the other place that could have the effect of ranking the regulatory objectives by requiring special consideration to be given to access to justice when granting ABS—alternative business structures—licences. I also intend to bring forward amendments to reverse those made in another place which require further study and a ““sunrise clause”” before part 5 can come into effect. That would only serve to delay innovation and consumer choice.