Legal Services Bill [Lords]

As the hon. Gentleman knows, if a complaint is made, it is firstly made against the law firm, and most complaints are sorted out at that stage. If a complaint goes further, the regulators come into play. That is a pretty telling figure. The Institute of Paralegals and the Council for Licensed Conveyancers also have similar concerns. So a one-size-fits-all approach is not necessarily suitable. Finally on consumer complaints, the Government have referred to Which? and the National Consumer Council, but other consumers should also be represented, not least the corporate consumers—the thousands of in-house lawyers. The Government are not giving enough thought to those consumers, not least in respect of giving them a voice on the LSB. Will the Minister reconsider that? In that vein, the line of the hon. Member for West Bromwich, West (Mr. Bailey) that this is a Bill for lawyers, run by lawyers and against the consumer is somewhat undermined. Moving on to alternative business structures, we believe that, subject to safeguards and the continued consideration of the impact on access to justice, entities should be able to participate in law firms and to provide multidisciplinary services to the public. The influx of external capital is likely to change the market for the better, by providing greater competition. That point was expressed strongly by my hon. Friend the Member for North-West Cambridgeshire (Mr. Vara). Which? and the National Consumer Council believe that proposals to make the legal services market more competitive will bring significant benefits for consumers, including more choice and higher standards. However, we remain concerned that, once the Bill is passed into law, the ABS proposals should not be rushed into practice without adequate care and thought. The hon. Member for Angus (Mr. Weir) noted his caution over the possible pitfalls, although I not sure to what extent he sees the reality of the marketplace. However, the retention of professional values is key, as is how that relates to actual or potential conflicts of interest that might arise in ABSs. As my hon. Friend the Member for North-East Hertfordshire identified and as was very well expressed by my hon. Friend the Member for North-West Cambridgeshire, borrowing from his significant experience, London is now the international legal centre and City lawyers are at the forefront of the boom, earning some £2 billion a year for this country. As a peer recognised, we are the best international lawyers in the world and people come to us and our courts because of our quality. That profit to this country could be put at risk if the images given by the Bill are ones of interference with the independence that leads to our getting so much work from abroad. That is one reason why we should be concerned to ensure that the independence of the LSB remains a priority in the Bill. That point was made very well by my hon. Friend the Member for Enfield, Southgate, whose comments were supported by his extensive legal experience. The Minister replied to an intervention from, I believe, the hon. Member for Wolverhampton, South-West (Rob Marris) by saying that the views of foreign Governments were not relevant. That goes somewhat against what we understood to be the case, and we will wish to look into that further in Committee. We agree with the recommendation that the Government adopt a careful approach to the ABS system, with a staged plan for implementation. On the basis of the Clementi report, the Joint Committee recommended starting with structures whereby lawyers and barristers could form partnerships and followed by a gradual move to a system of multidisciplinary practices and free-market ownership. Practically speaking, the Government have said that it is not likely that we will see multidisciplinary practices much before 2011. That date was provided by Baroness Ashton in February. Is it still the date? Will the Minister please identify the current timetable and the format envisaged for rolling out ABSs? We might wish to return to that in more detail in Committee. The hon. Member for Stafford made a good point on ABSs in suggesting that other regulated professionals, such as patent agents and chartered accountants, should possibly be dealt with using a more open stance than a non-regulated third party—for example, a non-legal investor in a law firm. I think that was the basis of what he was saying, and I agree that that is worth exploring in Committee. We had concerns that, under the original Bill, ABSs could limit access to justice. Those concerns gave rise to the successful amendment from my noble Friends in the other place. We are therefore truly sorry to hear that the Government intend to go soft on access to justice, by overturning that amendment. However, we also recognise that this should not turn into a case of the Government hindering the development of the legal profession or making it protectionist. As a Financial Times article pointed out,"““Familiar brands have nothing to gain from offering substandard legal services””." In other words, if a high street brand company were to offer legal services, its systems and rigorous product, services and brand management could provide a better service. However, we maintain that that should be managed in the wider pubic interest, as much as in the consumer interest. There is a balance to be had, and we will wish to ensure that the Bill is capable of delivering it. The key to resolving the regulatory maze is how to make an oversight regulator an effective partner of front-line regulators. It is therefore important, as was made clear by my hon. Friend the Member for North-East Hertfordshire, that the policy statement amendment should remain, so that we end up with light-touch regulation, and that the thresholds that govern when the LSB can intervene are kept sufficiently high. If the intention behind simplifying such relationships was to build consumer confidence, it would be logical if it also allowed lawyers to make appeals against regulatory decisions. Currently, the provisions only allow for judicial review. That is particularly relevant since the Government have stated that they have no intention of paying the costs of setting up or running either the LSB or the OLC. We should ask ourselves who will end up footing the bill. Let us make no mistake that, as things stand, it will be the consumer, as was quite well set out by my hon. Friend the Member for Enfield, Southgate. I should have thought that that sits somewhat uncomfortably with the Government’s stated intention to put the consumer first. There are the Government lawyers to consider. To echo Lord Thomas in the other place,"““I would like the Minister to tell us who we complain to about government lawyers if they do not come within the proposed regulatory regime.””—[Official Report, House of Lords, 6 December 2006; Vol. 687, c. 1172.]" Will they contribute to the levy? We will wish to review that issue. Can the Minister tell us how the Government lawyers will be regulated? The response of the Under-Secretary of State for Justice on how unions will be regulated, considering her stated attempt to exempt them from part 3, was confused and will need careful review in Committee. I want to end on the regulatory issue by returning to something that the Lord Chancellor said on Second Reading in the other place. He argued that people"““can have no confidence in a system where complaints are dealt with by a lawyer’s own professional body." He continued:"““These public perceptions can have a corrosive effect on the reputation of the sector more generally.””—[Official Report, House of Lords, 6 December 2006; Vol. 687, c. 1162.]" The Conservative party believes that that is too narrow an interpretation. As my hon. Friend the Member for North-East Hertfordshire and the hon. Member for North Southwark and Bermondsey (Simon Hughes) made quite clear, we feel that the preservation of justice and the constitutional importance of the independence of lawyers are more important than individual consumer’s interests or their perceptions, and we should be under no illusion that, in any event, the Bill in itself will not somehow make people like lawyers any more or any less than they do now. So we believe that we must take a stand for an independent and well-regulated profession. We have listened to the Government’s arguments and still have grave concerns that the Government will undermine the experience and expertise of the other place, which could turn the further stages of the Bill in this place into a rather negative and destructive process. This is a once-in-a-generation opportunity to reform the legal services sector. Given our support for the Bill in its current form at this stage, we therefore hope that the Government will take a more positive and constructive approach in the later stages than they have indicated that they will do today.