Legal Services Bill [Lords]

I start by declaring my interest. I am a non-practising solicitor, although a Scottish solicitor, and a member of the Law Society of Scotland. It is many years since I have set foot in a court, and I hope that it will be many years before I have to do so again. Although the Bill is primarily concerned with England and Wales, two matters impact on Scotland, and it is to those that I confine my brief contribution. I shall not touch on the regulation of solicitors, because we have a separate system in Scotland, and I gently remind the hon. Member for North-West Cambridgeshire (Mr. Vara), who talked about a UK legal system, that there is no such thing. There are three separate legal systems within the United Kingdom. The first point of concern is the proposals in part 5 to allow for the creation of alternative business structures. Much has been said about alternative ways of delivering legal services, but in effect, the Bill will allow multi-disciplinary partnerships to be formed, as the hon. Gentleman said. There has been a strong debate about that in Scotland, and from what I understand, in England for many years, and although the Bill affects only England and Wales, there is great concern in Scotland and other jurisdictions about the way in which the territoriality will be contained, because such entities are not allowed under the law of Scotland. There is a fair amount of cross-border activity between law firms and tie-ups between Scottish and English law firms. Some Scottish firms operate in England and some English firms operate in Scotland. Indeed, I am told that there are about 600 Scots lawyers working in London alone, many of them for the type of firms that are likely to be attracted to the alternative business structures. That does not include retired solicitors acting as MPs. There is nothing unusual about that situation, as many of the large commercial firms, especially in London, operate in many other jurisdictions. Liberalisation of services has been touched upon, and it is one of the sticking points in the current Doha discussions. Those Members who sit on the Trade and Industry Committee will recall receiving evidence on the issue from one large firm of commercial solicitors in London about our reports on trade with India and with the Mercosur nations of South America. It is conceivable therefore that such a practice established in London could in fact operate in several different jurisdictions. I am neutral on the question of multidisciplinary practices. The Front-Bench spokesmen from the Conservative and Liberal parties both rightly raised concerns about their local effect, but my concerns are about their cross-border implications. The Law Society of Scotland has raised concerns that the licensing provisions in clauses 71 to 111 and the relevant schedules are only framework provisions and that they lack detail. There are concerns about the way in which the new business structures will be licensed, and in particular about the way in which they comply with the law, professional rules and statutory and non-statutory provisions that apply outside England and Wales. That is important, because many people working in those large firms are regulated by others. They could, for example, be subject even within the UK to the professional regulation of the Faculty of Advocates, the General Council of the Bar of Northern Ireland, the Law Society of Scotland or the Law Society of Northern Ireland. It is important that any non-authorised person who manages such a firm does not act in such a way as to cause professional difficulty to such employees. That detail—the way in which the measures will apply to those new entities—must be teased out Indeed, much more prosaic concerns could arise. If, for example, a multidisciplinary partnership includes solicitors, advocates or barristers, architects and surveyors, how will the various professional organisations fit into the structure of the legal services board in dealing with the other non-lawyer members? In Scotland, and I am sure in England, solicitors firms have to pay into a guarantee fund that pays out should a member be found to have had their fingers in the till—to put it succinctly. Firms also have their own professional indemnity insurance. How would such a fund come into play in the event of a non-solicitor member of a multidisciplinary practice default? Would it work in the same way?