Legal Services Bill [Lords]

I am pleased to hear the opening remarks from across the House about how we have reached this stage in the Bill as a result of a great deal of healthy discussion and consensus. I said in Committee that before Report I would consider a number of the issues that have been raised again this evening. As I said then with reference to new clause 2, I do not object in principle to the fact that approved regulators should be able to challenge the decisions of the board. It is of huge importance to the accountability of the board that the approved regulators have recourse to some form of challenge when they feel that the board is being unreasonable. However, I thought that we had established in Committee that the ground for challenge that that creates—that of judicial review—is available automatically under the Bill as it was then. I do not see that new clause 2 adds anything. On amendment No. 1, there is a real possibility that that would run counter to the best interests of clients and might even cast doubt on the validity of many of the existing rules. Given the role of those broad professional principles, singling out conflict of interest but not being able to define it clearly might risk jeopardising the flexibility of regulators in this area. Clause 176 already places all authorised persons under a statutory duty to comply with professional rules, which will of course include rules on conflicts of interest, which are clearly stated in the professional bodies' rules. All those rules will, of course, also be subject to approval by the board; in a sense, there is already a double lock to ensure that rules on conflict of interest are complied with. I am pretty confident that those existing rules provide adequate cover and that the extra provision is not necessary; in fact, it has the potential to be undesirable. On amendments Nos. 2 and 64, since our discussion of the issue in Committee, I have considered carefully whether"““so far as is reasonably practicable””" should be removed from the duties under clauses 3 and 28. I understand the reasons that the hon. Member for North-West Norfolk (Mr. Bellingham) set out in favour of removal, but I am still not convinced that taking away the phrase is the best way to ensure that the consumer is, as has been mentioned, at the heart of the system. The amendments are neither appropriate nor practical, as under the new framework all regulators will need flexibility to weigh up how each of the objectives will operate in any given situation. The regulators will have to be able to take into account practical considerations—including, for example, the resources available to them. Such issues are key to the principles of proportionate and targeted regulation; I hope that Members on both sides agree that such regulation must be central to the success of the new regime. Retaining"““so far as is reasonably practicable””" makes it clear that regulatory decisions are made with reference to practical constraints, such as the expenditure incurred in meeting the objectives. The hon. Member for Somerton and Frome (Mr. Heath), who will be pleased that, for once, I have managed to get his constituency right—